11.1 Introduction

Whether it is web-enhanced ^[1] or just a plain old-fashioned bricks and mortar organization, it is not easy to build and sustain a successful business that earns a suitable return on the funds invested in it. Looking at well-established household name businesses like IBM, Holiday Inn, Kodak, ICI, Nestl , Virgin Atlantic or Tesco it is possible to get the false impression that it is a cinch to be a great commercial success. With the enormous power of hindsight it is easy to obtain the impression that it was obvious that these businesses would flourish and that the business model decisions such organizations made were pretty straightforward, if not actually simple.

In fact deciding on an appropriate business model is a major challenge for all business organizations. If the business model is not sound then the prospect of a successful outcome is not good. This is especially true in the case of both web-enhanced and web-enabled ^[2] businesses, which have had particular difficulty with this issue.

Although the business model is a central issue for success there is surprisingly little understanding of what actually constitutes a business model and what processes are required to develop this important business dimension. As Timmers (1999) points out there is no universally agreed definition of the term business model . Authors often use this term without even bothering to define it. In the case of web-enhanced or web-enabled businesses it sometimes appears that no attention at all has been given to the...