Académique Documents
Professionnel Documents
Culture Documents
Reference
1.
2.
3.
4.
5.
6.
7.
8.
EC Books
Net Ready, by Amir Hartman and John Sifonis, McGRaw-Hill, 2000.
Now or Never, by Mary Modahl, Harper Business, 2000
Designing Systems for Internet Commerce by G. Winfield Treese, Lawrence C. Stewart
(May 1998) Addison-Wesley Pub Co; ISBN: 0201571676
Net Results: Web Marketing that Works by Rick E. Bruner (Editor), Cybernautics, Usweb
Corporation Hayden Books; ISBN: 1568304145
E-Business : Roadmap for Success by Ravi Kalakota, Marcia Robinson, Don Tapscott
(June 1999) Addison-Wesley Pub Co (C); ISBN: 0201604809
Customers.Com: How to Create a Profitable Business Strategy for the Internet and Beyon
d
by Patricia B. Seybold (Contributor), R. T. Marshak, Ronni Marshak 1 Ed edition
(November 1998) Times Books; ISBN: 0812930371
Net Success : 24 Leaders in Web Commerce Show You How to Put the Web to Work for Yo
ur Business
by Christina Ford Haylock, Len Muscarella, Ron Schultz, Steve Case (May 1999) Adams
Media Corporation; ISBN: 1580621147
Creating the Virtual Store: Taking Your Web Site from Browsing to Buying, by Magdalena
Yesil, Published by John Wiley & Sons, November 1, 1996
EC(I) - 2
Course Description
This course provides an overview of Electronic
Commerce and Electronic Business based on new
E-conomy (network economics) and unique
characteristics of underlying web technologies.
Topics covered include: electronic commerce
overview, network economics, EC models and
strategies, EC case studies, e-business
components such as Enterprise Resource
Planning and Customer Relationship Management
from a reengineering process viewpoint; Internet
and web technologies including web
technologies, electronic payment systems, and
Internet security. Critical success factors for
building a successful EC will be discussed.
Minder Chen, 1996-2008
EC(I) - 3
Seminar Leader
Dr. Minder Chen received a B.S. in Electrical Engineering from National Taiwan
University in 1977, an M.B.A. from National Chiao Tung University in 1983, and a Ph.D. in
Management Information Systems from the University of Arizona in 1988.
He is currently Associate Professor of Management Information Systems and
Decision Science and served as the Director of Technology Program (an Executive Master
Program in Information Technology Management) in the School of Management at George
Mason University. He has taught Executive MBA and undergraduate level courses in
electronic commerce, as well as Business Process Reengineering and Change
Management; Technology Assessment, Evaluation, & Investment; Global Information
Technology Management at the Executive Technology Management master program.
He is the President of Advanced Information Technology Consulting (U.S.A), a
consulting firm specialized in business engineering, electronic commerce, and emerging
technologies. He is also one of the founder and Chief Technology Officer of KITE ECommerce Training and Consulting Inc. (Taiwan).
His primary research interests are
electronic commerce, computer-aided instruction, collaborative and organizational
learning, information engineering and business reengineering, computer-aided software
engineering, client/server computing, collaboration technologies (groupware), and objectoriented systems development methodology. He has published papers in Journal of
Management Information Systems, Database, Journal of Organizational Computing,
Expert Systems with Applications, IEEE Transactions on Knowledge and Data
Engineering, IEEE Transactions on Systems, Man, and Cybernetics, Journal of Small
Group Research, and IEEE Software.
EC(I) - 4
Continued ...
He has been involved in studying methods and tools for business process
reengineering and software reuse for DOD's Corporate Information Management Office.
He has also worked with governments and private-sector businesses, such as Fairfax
County Government, US Court, Industrial Technology Research Institute, DOD Center for
Information Management, American Management Systems, and Wizdom Systems Inc. in
their information engineering, client/server migration, and business reengineering efforts
by providing them with training and consulting services. He has given presentations and
one- to three-day business reengineering and electronic commerce and other advanced IT
seminars in U.S., China (for Everbright Group), Taiwan (via National Taiwan University and
Corporate Synergy Development Center), Singapore, and Hong Kong. Dr. Chen is also a
well-known expert in systems development methodology, integrated CASE tools, and
groupware. He has provided training courses such as HTML, DHTML, XML, JavaScript,
Web Site Development and User Interface Design, IIS, ASP, ColdFusion, electronic
commerce, CASE tools, Information Strategy Planning, Information Engineering
methodology, client/server computing using PowerBuilder and Visual Basic for many firms,
such as AT&T, Logicon, PSINet, KForce.com, TRW Inc., BDM, BTG, Lockheed Martin,
International Monetary Funds, Computer Sciences Corporation, and Marriot Hotel.
He is the co-guest-editor of the March 1992 IEEE Software special issue on
Integrated CASE, a CASE minitrack coordinator of Hawaii International Conference on
Systems Sciences for several years, a program committee member of Methods and Tools
for Business Engineering 1995 Conference, an international program committee member
of 1995 Pan Pacific Conference on Information Systems.
EC(I) - 5
Outline (I)
EC Introduction
Introduction
The cycle of electronic commerce
EC and Business Process
EC statistics
EC Strategies
4Cs strategy
Content, Community, Commerce
Revenue streams
E-conomy Map and EC Strategies
EC Business Models
EC Case Studies:
B2B: verticalnet.com
Auction: eBay
Subscription web sites: monster.com
e-tailing: 1800flowers.com
Financial investment sites: E*Trade
Other interesting web sites
EC(I) - 6
Outline (II)
E-Business and Extended Enterprise
Defining e-business and extended enterprise
Supply Chain Management
Customer Relationship Management
Business-to-business analysis
Case Studies
Amazon.com
Dell
Federal Express
Cisco
EC Implementation
Evolution of EC implementation
EC site life cycle
EC site design issues
Promotion and marketing
Net readiness evaluation
EC(I) - 7
EC Introduction
Introduction
The cycle of electronic commerce
EC and business process
EC statistics
EC(I) - 8
E-Business
E-Commerce
Commerce
Internet
Commerce
EC(I) - 9
Electronic Commerce
Electronic commerce is broadly as the ability to
execute business activities (transactions,
contracts, and partnership) over a computer
network. The execution of these activities lead
to the exchange of goods, services, and money.
Online business activities are changing market
dynamics and structures of various industries.
Electronic commerce adds a new dimension
"information" to business activities involving
information goods, information services, and
electronic money.
Minder Chen, 1996-2008
EC(I) - 10
Market Relationships
EC(I) - 11
Travelocity
Microsoft expedia
Priceline.com
EC(I) - 13
Access
Searches
Queries
Surfing
Customers
Online Ads
Follow-on Sales
Online Orders
Standard Orders
Distribution
Online: soft goods
Delivery: hard goods
Electronic Customer Support
EC(I) - 14
Institution
Government
Merchants
Manufacturers
Suppliers
Consumers
Electronic
Commerce
Marketing
Sales
Payment
Fulfillment
Support
Networks
Intranet
Extranet
Internet
Source: adapted from David Kosiur, Understanding Electronic Commerce, Microsoft Press, 1997.
Minder Chen, 1996-2008
EC(I) - 15
Adapted from: Kalakota and Whinston, Frontiers of Electronic Commerce, Addison Wesley, 1996, p. 4.
Minder Chen, 1996-2008
EC(I) - 16
Corporate Databases
Provide
Info
Send info
Data sheets,
catalogs, demos
Get
customer
Customer
Phone,
fax, e-mail
Request info
Identify
need
Web surfing
Web searches,
web ads
Web site
Find
source
Newsgroups
Provide
info
Demos,
reviews
Fulfill
order
Evaluate
offerings
Net
communities
Web site
P.O.s
EDI
Deliver soft goods electronically
Support
Purchase
Operate,
Maintain,
Repair
EC(I) - 17
EC(I) - 18
Reference: http://cyberatlas.internet.com/
Minder Chen, 1996-2008
EC(I) - 19
Business-to-Business E-Commerce
International Data Corporation forecasts that business-tobusiness e-commerce revenue will jump from $80 billion
worldwide in 1998 to $1.1 trillion in 2003. Forrester
Research believes that number will go even higher to $1.3
trillion by 2003.
Business-to-Business -- Vertical Industries
EC(I) - 20
Statistics
Holiday Season 1998
By 2003 . . .
Consumers on the Web will spend more than $177 billion worldwide.
There will be an eight-fold increase in Web buyers worldwide to 143
million (International Data Corporation, March 1999)
In Europe, 43 million households will be online. (Source: Nua Internet
Surveys 12/98 re: DataMonitor)
In Japan, buyers will spend one trillion Yen online. (Source: Nikkei
Multimedia, 12/98)
EC(I) - 21
Retailing Trends
s
re
to
rs
pe
Su
lls
Ma
t
ee
st r
in
Ma
Home Depot
CompUSA
Barnes and Nobles
Border
Minder Chen, 1996-2008
EC(I) - 22
AOL Findings
Buy brands
Seek convenience
Are increasingly time-starving
Are not solely motivated by price
Require simplicity
EC(I) - 23
Information rules
Network externality and network
economics
New supply and demand curves
Dynamic trade
EC(I) - 24
Global /Virtual
Business assets
Tangible
Intangible
Business change
Periodic
Continuous
Business production
Mass Production
Mass Customization
Mass Personalization
EC(I) - 25
Net Economy
1940s - 1980s
Manufacturing to information economy
Local - regional - national - multinational
Tangible brick-and-mortar assets: offices, shops, service
centers, and warehouse
EC(I) - 26
EC(I) - 27
Maximize the value of your intellectual property, not the terms and
conditions that maximize the protection.
EC(I) - 28
EC(I) - 29
EC(I) - 30
Vir
tuo
cy
cl
e
s
ou
Vi
ci
Value to User
us
c
yc
le
Positive
Network
Externality
Networks
Real: LAN, Internet, Fax
Virtual: Virtual community, Chat
room, Instant messenger
EC(I) - 31
Supply/Demand Flip
Classic Economics
Network Economy
Supply
Quantity
Supply
Price
Price
Demand
Demand
Quantity
EC(I) - 32
Price
Actual
supply
Quantity
Internet increase apparent supply
Apparent quantity rise
Price fall
Source: Now or Never, Mary Modahl, HarperBusiness, 2000
EC(I) - 33
Challenge
Consumers: Everything on the Internet should to be free.
Merchant: How can I make a profit if everything is free.
Examples:
Price
EC(I) - 34
EC(I) - 35
Product distribution
Seller-selected vs. Buyer-selected
Pricing
Product price list vs. Market-determined price
Production
Pre-sale vs. Post-sale (Dells BTO)
Customer relationships
Standard vs. Targeted and Customized
Strategic asset
Location vs. Visibility and Customer Database
Minder Chen, 1996-2008
EC(I) - 36
Commodity market
Perishability of inventory
Capital intensity
Configurability of products
Customers' perceived investment level
Threat from new kinds of competition
Channel volatility
TOTAL: _____________
Minder Chen, 1996-2008
EC(I) - 37
Electronic Commerce:
EC(I) - 38
EC(I) - 39
EC(I) - 40
ol l
/C
ng
ic
rv
Se
li
Bil
io
ect
i st
ns
og
n/L
g
tin
t io
uc
od
Pr
e
rk
les
Sa
Ma
ics
EC(I) - 41
t
era
Op
ent
ion
ym
Pa
nt
me
ics
ist
og
g/L
ivin
ce
Re
ure
oc
Pr
in
est
g/T
pin
op
Sh
Time
Minder Chen, 1996-2008
EC(I) - 42
EC Strategies
4Cs strategy
Content, Community, Commerce
Revenue streams
E-conomy Map
EC(I) - 43
EC Strategies: 4 Cs
Customers
Commerce
Content Community
Minder Chen, 1996-2008
EC(I) - 44
Customers
Obsess over your customers
Remember that the Web is an infant
What do you have to offer that the physical world
cannot in order to attract customers?
EC(I) - 45
EC(I) - 46
EC(I) - 47
5 Steps to Success in EC
Set strategy
Make it easy for customers to do business with you!
EC(I) - 48
Acquisition costs
Base profit
Revenue growth
Cost savings
Referrals
Price premium
Benefits:
No-cost acquisition
Experienced customer
Strategies
Increase customer "inventory"
Increase customer "tenure"
EC(I) - 49
EC(I) - 50
EC(I) - 51
EC(I) - 52
EC(I) - 53
Customer Information
Processes:
Marketing
Pre-sales
Sales
Post sales support
Delivery
Field service
Quality control
Billing
Product development & production
Media
Web
Kiosh
E-mail
Phone
Mail
Fax
Hand-held
EC(I) - 54
Virtual Communities
Money
Content
Demographics
Virtual
Community
Content
Hard goods
Games
Services
Providers
Users
Advertising
Advertisers
Minder Chen, 1996-2008
Other
Websites
EC(I) - 55
Communities of Fantasy
EC(I) - 56
www.parentsoup.com
EC(I) - 57
Geocities: www.geocities.com
This collection of themes cyberhoods is populated by a half-million
"homesteaders" who get free home pages.
EC(I) - 58
EC(I) - 59
EC(I) - 60
Major Portals
AOL/Netscape
Yahoo
Excite
MSN
Lycos
InfoSeek/GO: Disney's go.com
Snap
AltaVista
EC(I) - 61
Revenue Streams
Advertising / Sponsorship
Transaction
Subscription / Listing Fee
Value-added services
EC(I) - 62
EC(I) - 63
Communities of interest
Changing topics for repeat customers
Features that encourage customers to explore
ENGAGE: Leads
Special areas encourage customer to register (i.e. selection of articles customized for visitors
interests)
Shopping
Attract
Jump
Engage
Participate
EC(I) - 64
Pricing
Value
Customers
New
Values
Highly interrelated!
New
Pricing
New
Customers
EC(I) - 65
eBay
If you want to bid or browse at eBay, it's free. You don't pay a penny
in fees.
If you're a seller, you'll be charged:
An insertion fee. This fee is usually between 25 cents and $2.00, depending on your
opening bid.
A Final Value (final sale price) fee at the end of your auction. This fee generally
ranges from 1.25% to 5% of your final sale price.
EC(I) - 66
Equity investors hold traditional players to a higher profit standard than they
do to the dotcoms.
In the US, venture funds and individual investors can bankroll tears of big
losses of dotcoms in a bid to win market share from traditional companies.
EC(I) - 67
Optimists
Optimists
Career
Family
Fast Forward
12%
Techno-strivers
Digital Hopeful
7%
Handshakers
7%
Pessimists
Pessimists
8%
7%
Traditionalists
8%
Entertainment
Mouse Patatoes
9%
Gadget Grabbers
9%
Media Junkies
5%
Sidelined Citizens
28%
Laggards
High
Low
High
Low
Income Level
Mainstreams
Primary Motivation
More Men
More Women
More Educated
Less Educated
High Income
Low Income
Have Children
No Children
Younger
Early Adopter
Age
Older
Mainstreams
Laggards
Time
Minder Chen, 1996-2008
EC(I) - 69
High
Low
Second Wave
Earlier Adopter
Jenny Craig
Chrysler
AA
FedExp
Microsoft
Nike
Pepsi
Source:
Forrester
Research
EC(I) - 70
EC Development Process
Competitive and capability analysis
Knowledge building and market evaluation
EC Business model design and feature
identification
EC technical architecture design
Application development and deployment
Continuous performance evaluation and
innovation
EC(I) - 71
EC(I) - 72
Fast deployment
Evolutionary implementation
First mover advantages
Promotion, promotion, promotion
Customer focus and services
Interaction with customers
Integrating emerging technologies
Redefining and redesigning business models
Comprehensive database and data warehouse design
Integrating back office operations with the virtual
store fronts
EC(I) - 73
EC(I) - 74
EC(I) - 75
EC(I) - 76
EC(I) - 77
2. Think Portal
Think in terms of "portal". It's not about the site per se, it's
about the community you create.
It's about building and maintaining services that build customer
and partner loyalty and make your employees more efficient in
providing service to your customers and partners.
Examples: automobiles/enthusiasts, airlines/travel agents,
insurance/health care, agricultural/food and nutrition.
Find and create that home on the Web, and leverage it for
competitive advantage.
3. Think Services
It's not enough anymore just to put information on a Web site.
Today you need to be offering services. What those services are
will be up to you, but that's where users are finding value in the
Net Economy.
Examples: Insurance, auto buying, auctioning, customer
support, supply chain management, etc.
Services equal customer loyalty and retention.
Minder Chen, 1996-2008
EC(I) - 78
now!
EC(I) - 79
What To Do Now
Rapid innovation
EC(I) - 80
What To Do Now
3. Identify the target:
Business objectives
Customer segment
Application area
EC(I) - 81
High
Fast
Low
Risk
Slow
Time to Market
Integration
Subsidiary
Partnership
Buyout
Cost
Low
High
EC(I) - 82
EC(I) - 83
Soruce: Harvard Business Review, Get the Right Mixes of Bricks and Clicks, May-June 2000
Minder Chen, 1996-2008
EC(I) - 84
EC(I) - 85
EC(I) - 86
EC(I) - 87
Becoming Virtual
Egghead to Egghead.com
Computer Literacy to Fatbrain.com
Romac International to KForce.com
Kinder
Kinder Toys
Toys is
is Moving
Moving to
to
www.toydomain.com
www.toydomain.com
(Find
(Find us
us on
on the
the web
web after
after June
June 1st)
1st)
EC(I) - 88
EC(I) - 89
E-conomy Map
Business
COINs
HP
Testing &
Measurement
VerticalNet
Testandmeasurement.com
Enterprise
Consumers
Affinity
Groups
HomeCare
Products
HomeCare
InfoCenter
Individual
The Message
(The Content)
COINs: Community of Interests
EC(I) - 90
Benchmark competitors'
Business operations
Products / Services
The economics of ordering online, sales force,
and call centers
EC(I) - 91
EC(I) - 92
Customer feedback
Benchmark data
Competitive analysis
Market forces
Usage statistics
Customer needs
Current capabilities
E-Vision
Business
Drivers
Technology
Drivers
E-Business
Strategy
Source:
Digital
2000
Minder
Chen,Transformation,
1996-2008
Systems and
networks
Web architecture
Business
infrastructure
Technology
components
Web technology
strategy
Rapid
Implementation
EC(I) - 93
Internet Industry
Sports
Malls
Entertainment
Newsfeed
Publications
Content
and
Activity
Consulting
Electronic
Commerce
Infrastructure
Internet
Economy
System Integration
and Design
Backbone Router
Access Equipment
Server Computers
Internet
Equipment
ISP
Network
Services
Commerce Instruments
Portals
Commerce Servers
Client/Server
Software
Browsers
Web Server
Application Servers
Security
Tools
Internet Service
Consumer Services
Carriers
EC(I) - 94
EC Business Models
B2C Virtual stores: physical and digital goods
and services
Infomediaries: Seller-side
Informediaries: Buyer-side
Infomediaries: B2B marketspace
EC(I) - 95
Food
Clothes
Computer hardware and Electronics
Packaged software
Information
Database
Publishing
Research
Software
Computer games
Java applets
Application software
Services
Selling time:
Computer game play
Consulting
Legal and medical services
EC(I) - 96
EC(I) - 97
EC(I) - 98
Why?
The most affected industries:
Books
Stock trading
PCs
Automobiles
Travel
Food
Consumer durable goods
Clothing
Local services
Banking and insurance
Enterprise.com, 1998
EC(I) - 99
Buy-side
Sell-side
Marketplace: Business is being transacted with both suppliers
and customers.
Business to Business
Business to Consumer
EC(I) - 100
Buyer A
EDI
Selling
Merchant
Online
Selling
Buyer B
Buyer C
EC(I) - 101
Sell-Side Storefront
Primary model used in current businessto-consumer scenarios
Single seller, typically a distributor,
constructs a Web storefront to sell to
many consumers (i.e. Amazon.com)
Unless a single distributor can
aggregate all the suppliers in a given
industry, the buyer remains responsible
for comparison shopping between
stores
Expensive for buyer; does not meet the
needs of corporate procurement
organizations.
Minder Chen, 1996-2008
EC(I) - 102
Seller A
EDI
Buyer
Online
Procurement
Seller B
Seller C
EC(I) - 103
Buy-Side eProcurement
Buy-side applications generally consisting of a
browser-based self-service front end to ERP and
legacy purchasing systems
Corporate procurement aggregates many supplier
catalogs into a single universal catalog and allows
end-user requisitioning from the desktop, facilitating
standard procurement for the organization and
cutting down on maverick purchasing
Purchases made through this system are linked to
the back-office ERP or accounting system, cutting
time and expense from the transaction and avoiding
potential bookkeeping errors
Model yields reduced transaction costs but not lower
purchase costs; no impact on size of supplier base, no
enablement of dynamic trade; buying organizations
must set-up and maintain catalogs for each of their
suppliers; too costly and technically demanding for
most medium and small-sized businesses.
EC(I) - 104
Seller A
EDI
Buyer B
EDI
Virtual
Marketplace
Seller B
OBI
Buyer C
OBI
eBay.com
Pricelines.com
Egghead.com
Amazom.com Auction
www.chemdex.com
Seller C
EC(I) - 105
Business-to-Consumer
Business-to-Business
No vendor loyally
No switching costs
Time-insensitive
Short-term
Casual
Many vendors
Products differentiated
on price, image
Relationship-based
Very high switching costs
Extremely time-sensitive
Long-term
Mission-critical
Few partners
Partners differentiated on
reliability, flexibility
EC(I) - 106
B2B Marketplace
Latest evolution of B2B eCommerce,
enabling a many-to-many relationship
between buyers and suppliers
Buyers and suppliers leverage economies
of scale in their trading relationships and
access a more liquid marketplace
Sellers find buyers for their goods, buyers
find suppliers with goods to sell
Many-to-many liquidity allows the use of
dynamic pricing models such as auctions
and exchanges, further improving the
economic efficiency of the market.
Web Site: http://www.netmarketmakers.com/
Minder Chen, 1996-2008
EC(I) - 107
Direct-to-Customer (D-to-C)
Large, global, e-energized corporations (e.g.,
Fortune 1000) begin to squeeze intermediary
companies.
Stop & Shop [a large supermarket chain] is
launch its own delivery service and is expected
to end its partnership with Peapod [a dotcom
delivery service]. -- The Boston Globe, April 2000
June 20, 2000. Peapod announced online shopping and
delivery services in Connecticut through grocery chain
Stop & Shop. Stop & Shop is owned by Royal Ahold,
which recently took a 51 percent interest in struggling
Peapod.
B-to-C
Minder Chen, 1996-2008
B-to-B
D-to-C
EC(I) - 108
Channel Conflicts
Channel conflicts arise when a new venue for selling products - such as
the Web for selling goods or services - threatens to cannibalize one or
more existing conduits for selling goods within the same organization,
such as a retailer or a manufacturer.
EC(I) - 109
Case in Point
For example, about a year ago (1999), General
Motors Corp. in Detroit attempted to buy back
some car-dealer franchises as a possible step
toward selling directly over the Web. Dealers
protested so adamantly that both GM and Ford
Motor Co. in Dearborn, Mich., spent a lot of time
at a recent industry convention reassuring
dealers that the automakers wouldn't sell
directly to consumers. And in a recent survey
by Cambridge, Mass.-based Forrester Research
Inc. of 50 consumer-goods manufacturers, 66%
cited channel conflict as the No. 1 obstacle to
selling online.
EC(I) - 110
EC(I) - 111
Cases:
Strategies:
EC(I) - 112
Seller broker
Buyer broker
Transaction broker / Exchange
COINs
Portals
Trust intermediary
E-business enabler
Infrastructure providers / Communities of
commerce
Source: Net Ready, 2000
Minder Chen, 1996-2008
EC(I) - 113
Banks
Consumers
Businesses
PCs
Web TV
PDA
Smartcards
Specialty Devices
Other
High
Value
Solutions
Brokerage
Transactions
and
Payments
Retail
Insurance
Distributors
Institutions
Physical
Infrastructure
Transport
Other
EC(I) - 114
Clicks-and-Mortar
Clicks-and-mortar has become the new buzzword in
retailing circles.
It means having an integrated, multi-touchpoint
strategy that takes advantage of your physical retail
outlets and integrates them seamlessly into your Web
strategy.
A good clicks-and-mortar strategy uses the Web to
drive traffic to your stores and uses your stores to drive
traffic to the Web.
Brick-and-Click
YourSherpa.com
EC(I) - 115
Vulnerability Grid
Risk/Opportunity Exposure
Your Risk/Opportunity
Low
Medium
High
Digitizability:
Efficiency:
Customizability:
service?
Asymmetries of Information:
Commodity:
service?
Fragmentation:
Attitudinal Readiness:
accept new ways?
Velocity:
EC(I) - 116
Conventional View
Supply
Base
Supply-chain
management
My
Company
SCM
Consumer-Centric View
Supplier network
Distribution
Channel
Target
Consumers
CRM
ERP
C2B2B: Customer-to-Business-to-Business
Channel
Virtual
Enterprise
Consumer
Communities
EC(I) - 117
EC(I) - 118
Aggressive
pricing for
online plays
Increasingly
price-sensitive
online shoppers
Comparison
shopping
engines
Economies
of scale
New services
and loyalty
programs
Auctions
Exchange
Independent
market
operators
Consortia
Manufacturer
C2B
Examples:
B2B: Vericalnet.com
B2C: Amazon.com
C2B: Priceline.com
C2C: eBay.com
Distributor
New
Middleman
Retailer
B2C
C2C
Consumer
Service Providers:
Logistics
Financial
B2C
EC(I) - 120
Core strategies
Strategic resources
Customer interfaces
Value networks
EC(I) - 121
Business Mission: This captures the overall 'objective' of the strategywhat the business model is designed to accomplish or deliver.
Product / Market Scope: This captures the essence of 'where' the firm
competes-which customers, which geographies, and what product
segments-and where, by implication, it doesn't compete.
Basis for Differentiation: This captures the essence of 'how' the firm
competes and, in particular, how it competes 'differently' than its
competitors.
Core Competencies: This is what the firm 'knows.' (skills and unique
capabilities)
Strategic Assets: They are what the firm owns such as brands, patents,
infrastructure, proprietary standards, customer data, and anything else
that is both rare and valuable.
Core Processes: This is what people in the firm actually 'do.' (activities)
EC(I) - 122
Fulfillment and Support: This refers to the way the firm 'goes to
market,' how it actually 'reaches' customers-which channels it uses,
what kind of customer support it offers, and what level of service it
provides.
Suppliers
Partners
Coalitions
EC(I) - 123
Bridge Components
These four major components are linked
together by three 'bridge' components:
Configuration: Intermediating between a company's
core strategy and its strategic resources is first
bridge component.
Customer Benefits: Intermediating between the
core strategy and the customer interface is second
bridge component.
Company Boundaries: Intermediating between a
company's strategic resources and its value
network is third bridge component.
EC(I) - 124
Number of companies
Many smaller
players with high
rate of entry
Transition
Size of company
Source: Now or Never, 2000
Minder Chen, 1996-2008
EC(I) - 125
Manufacturers
EC(I) - 126
EC(I) - 127
Product distribution
Seller-selected vs. Buyer-selected
Pricing
Product price list vs. Market-determined price
Production
Pre-sale vs. Post-sale
Customer relationships
Standard vs. Targeted and Customized
Strategic asset
Location vs. Visibility and Customer Database
Minder Chen, 1996-2008
EC(I) - 128
Commodity market
Perishability of inventory
Capital intensity
Configurability of products
Customers' perceived investment level
Threat from new kinds of competition
Channel volatility
TOTAL: _____________
Minder Chen, 1996-2008
EC(I) - 129
Buyer
Brick-and-mortar
Face-to-Face
Mail order
Mail
Printed catalog
Phone order
Telex
Phone
Fax
Seller
Electronic commerce
EDI
Email
Pure Play
Web
EC(I) - 130
Internet Companies?
Intel Chairman
Minder Chen, 1996-2008
EC(I) - 131
EC(I) - 132
Get Attention
Branding
TV Ads
Magazines
Information
Brochures
Sales People
Print/editorial
Transact/
Service
The Sale
Store
Telephone
Catalogue
EC(I) - 133
YourCompany.com??
EC(I) - 134
Increasing commoditization
Your competitors are just a mouse click away
Camparison shopping: singleshop.com,
mySimon.com
New competition from surprising places
EC(I) - 135
EC(I) - 136
Egghead.com, Homebid.com
EC(I) - 137
B2B: verticalnet.com
Auction: eBay
Subscription web sites: monster.com
e-tailing: 1800flowers.com
Financial investment sites: E*Trade
Other interesting web sites
EC(I) - 138
www.verticalnet.com
EC(I) - 139
EC(I) - 140
EC(I) - 141
Auction: eBay.com
EC(I) - 142
Auction: eBay.com
EC(I) - 143
Priceline.com
EC(I) - 144
Fast Company
Interactive Week
EC(I) - 145
Business Models
Priceline.com has pioneered a unique new type of e-commerce
known as a "demand collection system" that enables consumers
to use the Internet to save money on a wide range of products and
services while enabling sellers to generate incremental revenue.
Using a simple and compelling consumer proposition--"name your
price," we collect consumer demand (in the form of individual
customer offers guaranteed by a credit card) for a particular
product or service at a price set by the customer and communicate
that demand directly to participating sellers or to their private
databases.
Consumers agree to hold their offers open for a specified period of
time to enable priceline.com to fulfill their offers from inventory
provided by participating sellers. Once fulfilled, offers generally
cannot be canceled.
By requiring consumers to be flexible with respect to brands,
sellers and/or product features, we enable sellers to generate
incremental revenue without disrupting their existing distribution
channels or retail pricing structures.
EC(I) - 146
Problems?!
As if making a profit from online retailing were not enough of a challenge,
try making money online under a system where you give your customers
essentially no service, no selection and no right to return unwanted items.
May sound crazy, but not too long ago, investors seemed to think it was a
brilliant idea.
Critics say the company's troubles raising money reflect some fundamental
problems with its reverse auction model, which invites consumers to set
their own prices. But it also requires them to commit to the purchase
before they know all the details.
"Consumers typically look for four things: choice, service, selection and
low price,'' said Tom Courtney, an analyst with Banc of America Securities.
"Priceline gives up everything but the price.''
In hindsight, many critics say Priceline is more gimmick than solid
business. Now that the novelty of the name-your-own-price model has
started to wear thin, they are losing faith in its viability.
``What I've seen is an intriguing model. You try it once and you feel a little
uncomfortable with it. You may not get the route or the fare you wanted
and at the end of the day you are not so sure about it,'' said Craig Palmer,
president of eWanted, another Internet auction site. ``People come to
Priceline, but they don't come back again and again and again.''
EC(I) - 147
E-Loan at eloan.com
IPO: 2 Billion Dollars Market Capitalization
EC(I) - 148
Insweb.com
EC(I) - 149
Singleshop.com
Compare this with:
mySimon.com
EC(I) - 150
EC(I) - 151
EC(I) - 152
EC(I) - 153
Outpost.com
EC(I) - 154
eToys.com
EC(I) - 155
EC(I) - 156
CDNow
EC(I) - 157
EC(I) - 158
E-tailing CSF
eStrategy
eMerchandising
eArchitecture
eSupplyChain
eConnections
eBackOffice
eProperty
eCapital
EC(I) - 159
EC(I) - 160
C|NET at cnet.com
EC(I) - 161
espn.go.com
ESPN Sportszone
EC(I) - 162
www.slate.com
Check out
http://interactive.wsj.com/
http://www.salon.com
EC(I) - 163
EC(I) - 164
1-800-FLOWERS: Http://www.1800flowers.com/
A real world florist with more than 20 years of
experience.
Went on live in April 1995.
Also maintain sites in American Online and
CompuServe.
Online retailing $25 million (10% of company
sales) in 1996.
Take advantage of proven retail marketing
strategies: discounts, contests, and
sweepstakes, grand opening promotions, etc.
EC(I) - 165
Www.1800flowers.com
EC(I) - 166
See also:
Gifts.com
Help customer to
remember:
Reminder services
Lifeminder.com
Personalized shopping
lists at Staples.com
Minder Chen, 1996-2008
EC(I) - 167
Homegrocer.com
NetGrocer.com
Streamline
WebVan
Priceline.com
Minder Chen, 1996-2008
EC(I) - 168
EC(I) - 169
Landsend.com
EC(I) - 170
EC(I) - 171
My Virtual Model
Online catalog Landsend.com plans to outshine the competition
this holiday season with a more accurate virtual model derived
from a body scan, the company announced Tuesday. In the months
leading up to Christmas, a Lands' End mobile unit equipped with
an automated Image Twin scanning booth will offer consumers in
14 U.S. and Canadian cities a chance to obtain precise body
measurements, generating a virtual twin who will try clothing
online.
Inside the mobile scanning unit, white light flashing on and off for
more than 12 seconds digitally captures 200,000 data points of a
consumer's figure, creating a 3-D mirror image. A consumer can
start using the model online within two hours, after the information
is transmitted wirelessly to an IBM server farm located in North
Carolina, said C. Cammack Morton, chairman and founder of the
North Carolina-based Image Twin.
The dressing-room tool, My Virtual Model, is an updated version of
a virtual model generated solely from a questionnaire about height,
dress size, body shape, and the like. The updated tool takes
additional measurements for a more realistic result and as of next
week, will offer a male virtual model.
EC(I) - 172
EC(I) - 173
Portfolio
EC(I) - 174
Trading
EC(I) - 175
Analysis
EC(I) - 176
EC(I) - 177
Online competitor
EC(I) - 178
Updates
E*TRADE added 233,000 new active accounts
during first quarter 1999, an increase of 77% over
the previous quarter.
In its second fiscal quarter, customer trades rose
63 percent in three months to approximately 70,000
per day.
They ended the quarter with 909,000 accounts and
customer assets of $21.1 billion
(Source: San Jose Mercury News, 4/21/99).
EC(I) - 179
Calling it the first pure-play Internet company to integrate banking and brokerage services,
E*TRADE Group Inc. announced Tuesday it is acquiring Internet bank Telebanc Financial
Corp. for approximately $1.8 billion.
Terms of the agreement call for Telebanc shareholders to receive 2.1 shares of E*TRADE
common stock for each share of Telebanc common stock. The merger is valued at roughly
$1.8 billion based on E*TRADE's closing price on Friday, May 28. Once the merger is
finalized, Telebanc shareholders will own approximately 13 percent of E*TRADE's fully
diluted common stock. The transaction will be accounted for as a pooling of interests and
is slated to close sometime this fall upon regulatory and shareholder approval.
The merger creates an Internet-based, FDIC-insured cash management account which the
companies predict will change the future of personal financial services. Aimed at millions
of Internet consumers, the online financial management resources of E*TRADE combined
with online banking capabilities is expected to eliminate the need for multiple financial
relationships.
The merger also will offer online consumers for the first time, access to full-featured, FDICinsured Internet cash management accounts, including ATM access through the national
Cirrus network, online bill payment and investing services, enabling them to consolidate
brokerage and banking accounts.
By offering a central account, customers will be able to conduct a full range of transactions
online, including buying mutual funds, CDs and fixed income securities, trading equities
and paying bills. E*TRADE said through the integration of the companies services, a costeffective, scalable business model will be achieved, while boosting E*TRADE's customer
acquisitions and aggressively expanding its existing one million-plus customer account
base.
EC(I) - 180
EC(I) - 181
As of 4/16/99
Schwab: $46.6 B
Merrill: $31.0 B
M ar-99
D ec-98
Sep-98
Jun-98
M ar-98
D ec-97
Sep-97
Jun-97
M ar-97
D ec-96
Sep-96
Jun-96
M ar-96
Charles Schwab
Merrill Lynch
EC(I) - 182
EC(I) - 183
EC(I) - 184
EC(I) - 185
http://www.ananova.com/
The world's first virtual anchor woman.
http://www.sonicnet.com/
Create your own radio station
EC(I) - 186