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ACCA Strategic Professional · Strategic Business Leader · E-business: value chain

Agrimatch operates an online marketplace where farmers list produce and food processors place orders. Agrimatch owns no produce and earns a fee on each completed transaction. Which business model does this represent, and what is a key strategic feature of it?

This is a platform or marketplace business model. Agrimatch connects farmers and processors, owns no stock and earns a fee per transaction. Its value rises with the number of participants on each side, so network effects and attracting both user groups are the central strategic features.

  1. AA platform (marketplace) model, whose value depends on network effects between the two user groupsCorrect
  2. BA linear pipeline model, whose value depends on controlling production inputs
  3. CA subscription model, whose value depends on regular fixed customer payments
  4. DA freemium model, whose value depends on converting free users to a premium product

Explanation

Agrimatch connects two sides, producers and buyers, and earns a transaction fee without owning the goods. This is a platform or marketplace model. Its value grows as more farmers and processors join (network effects), so attracting both sides is critical.

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