Topic 5 — eBusiness Models
& Revenue Models

When suppliers hold strong monopoly power, the business strategy is to reduce supplier strength through collective bargaining. The Revenue Sharing model achieves this by bringing multiple competing companies together through a shared digital portal.

• Companies pool together to place collective bulk orders — gaining economies of scale over individual orders
• Sellers market and promote products collectively to reach a larger market segment
• The eHub enables companies to deal with larger projects and customers they couldn't handle alone
• Resources and profits are shared proportionally based on contribution
• The Digital Value Hub (eRegion) and Supply Chain Model are also applicable secondary strategies

DELL Computer is the classic textbook example. In the traditional model, manufacturers sold through distributors → dealers → customers. D2C eliminates all intermediaries so the manufacturer sells directly.

• Pricing control — no intermediary margin means more competitive consumer prices
• Build-to-order — produce only what customers request, eliminating overstock risk
• Receive payment earlier — customers pay before production begins
• Faster product release cycles — direct customer feedback accelerates iteration
• Rich CRM data — first-party customer data enables personalised services and proactive decisions
• Market expansion — online channels remove geographical limitations

The FSP model is a one-stop solution for customers. Rather than dealing with multiple vendors, the customer interacts with a single provider who handles everything from sales to after-sales support.

• Offers a wide range of own and third-party products through multiple channels (internet, phone, face-to-face)
• Earns revenue from own product sales + commission on third-party products
• Acts as a single point of contact — simplifies procurement, reduces customer effort
• Requires deep customer knowledge to tailor offerings appropriately
• Industry examples: DHL (logistics), JPMorgan Chase (finance), Mayo Clinic (healthcare)

By making it inconvenient to switch providers, FSP directly counters high buyer bargaining power — customers who can compare prices easily are locked in by convenience and integrated value.

The Digital Value Hub is unique because its strength comes from the entire ecosystem, not a single company. It represents the concept of the Extended Enterprise — where an organisation's value chain extends beyond its own walls to include all supply chain partners.

• Strong B2B partnerships and collaboration between every node of the supply chain
• Industry competitors willingly working together — known as co-opetition
• Trust relationships among rivals within the same industry sector
• Functions as a unified collective force against foreign competition and new entrants
• Enables accelerated innovation, co-creation of products, and data-sharing across the ecosystem

The Boeing 7E7 (Dreamliner) case illustrates this — aircraft components were designed and manufactured collaboratively across Japan (Mitsubishi, Fuji, Kawasaki), Australia, Canada, Italy, and the USA, all digitally integrated.

Chocos faces multiple simultaneous Porter's forces, so a single model is insufficient. Each model in the combination targets a specific threat:

• Supply Chain Model → Addresses high supplier bargaining power (the united cocoa supplier association). Implementing EDI, real-time inventory, and electronic supplier collaboration reduces dependency and improves transparency across the supply chain.
• Revenue Sharing / eHub → Local distributors and cocoa farmers join a portal to collectively negotiate and order, further reducing supplier monopoly and achieving economies of scale through bulk purchasing.
• Digital Value Hub → To counter foreign chocolate brands (rivalry + threat of substitutes), Sri Lankan chocolate manufacturers can form a digital ecosystem that collectively promotes a "Sri Lankan chocolate" identity, co-creates products, and presents a unified front in global markets.
• A Global Trade Platform layer can additionally address Chocos' shrinking international market reach.

This multi-model approach aligns with the 7Es eTransformation methodology — from environmental analysis (Stage 1) through goal-setting, eReadiness, roadmap, methodology, eSystems, and change management (Stages 2–7).