eCommerce Framework - Part 2eCommerce Framework - Part 2

CPS 181s

Jan 14, 2003

Impact 1: Economics of GrowthImpact 1: Economics of GrowthImpact 1: Economics of GrowthImpact 1: Economics of Growth

Increasing “speed of adoption”

Far outdistances other technology growth

Scale and velocity reshapes economic growth

Impact 2: Blurring of Industry Impact 2: Blurring of Industry BoundariesBoundaries

Impact 2: Blurring of Industry Impact 2: Blurring of Industry BoundariesBoundaries

Old categories breaking down

“Last mile” to consumer homes see a blur of

alternative telecommunications networks

Impact 3: Transformation of Impact 3: Transformation of Social Structure and SocietySocial Structure and SocietyImpact 3: Transformation of Impact 3: Transformation of Social Structure and SocietySocial Structure and Society

Transforming

learning

group communications

scientific interchange

how society functions

Ubiquitous Website addresses

Opportunities for Wealth Opportunities for Wealth CreationCreation

Opportunities for Wealth Opportunities for Wealth CreationCreation

Even Today There are Market Capitalization Opportunities for New Economy Players

consumer productsfinancial marketsmiddleware enabling commerceservicesadvertising

6

Business to Business eCommerce ProjectionBusiness to Business eCommerce Projection

Business to Business eCommerce Projections inBusiness to Business eCommerce Projections in Millions (1996-2000)Millions (1996-2000)

8

-20

0

20

40

60

80

100

1201

92

2

19

26

19

30

19

34

19

38

19

42

19

46

19

50

19

54

19

58

19

62

19

66

19

70

19

74

19

78

19

82

19

86

19

90

19

94

19

98

E

Internet as Mass Medium — North American Adoption Curves

North American Users /

Households (MM)

* Launch of HBO in 1976 used to estimate the beginning of cable as an entertainment / advertising medium

Radio

TV

Cable CommercialInternet

50 Million Users / Households

Years to Reach50 MM Users

Radio: 38 yearsTV: 13 years Cable*: 10 years

Commercial Internet: 5 years

Internet Adoption Rates Versus Internet Adoption Rates Versus Other MediumsOther Mediums

Internet Adoption Rates Versus Internet Adoption Rates Versus Other MediumsOther Mediums

Estimated Savings from eCommerceEstimated Savings from eCommerceEstimated Savings from eCommerceEstimated Savings from eCommerce

eCommerce Decision-making eCommerce Decision-making ProcessProcess

eCommerce Decision-making eCommerce Decision-making ProcessProcess

Identify: Customer groups to serve Compelling set of benefits, differentiating “value proposition” Communication effectiveness Content

Look and feelLevel of communityPersonalization

Organization structureBusiness servicesApplication services

Potential partnersCapabilities

Shareholders Metrics

eCommerce StrategyeCommerce StrategyeCommerce StrategyeCommerce Strategy

Managerial task of eCommerce strategy

Framing the market opportunity

Business model

Customer interface

Market communications and branding

Implementation

Metrics

Fulfillment Systems

CustomerInterface

On-line Off-line

Yahoo!

Amazon.com

BN.com

McD

on

ald

s

Eg

gh

e ad

Where to Play On-Line and Off-LineWhere to Play On-Line and Off-Line

Market InfrastructureMarket InfrastructureMarket InfrastructureMarket Infrastructure

Opportunities and ConstraintsNetwork InfrastructureMedia InfrastructureTwo Forms of ConvergencePublics and Policies

Media Convergence to a Digital PlatformMedia Convergence to a Digital PlatformMedia Convergence to a Digital PlatformMedia Convergence to a Digital Platform

Telephone/DSL

Cable

Broadcast Radio & TV

Satellite

Wireless

Print (Newspapers and Magazines)

Television

Radio

Music

Motion Pictures

DigitalConvergence

DigitalConvergence

NetworkInfrastructure

NetworkInfrastructure

MediaInfrastructure

MediaInfrastructure

A Framework for eCommerceA Framework for eCommerceA Framework for eCommerceA Framework for eCommerce

Framing the Market

Opportunity

BusinessModel

Implementation

Evaluation:Metrics

and Valuation

Media Infrastructure

Network Infrastructure

e-commerceStrategy

Market Infrastructure

CustomerInterface

Publics and Politics

Market Communications

and Branding

Point Counterpoint: Who Will Point Counterpoint: Who Will Win? Online vs. OfflineWin? Online vs. OfflinePoint Counterpoint: Who Will Point Counterpoint: Who Will Win? Online vs. OfflineWin? Online vs. Offline

On-line will win Off-line Will Win

Off-line companies can’t easily cannibalize their own businesses

Off-line companies stock does not allow them to adequately incentivise key new economy talent

Off-line companies move too slowly Key elements of business (e.g. business

design, strategy, value proposition) are different in the New Economy

“innovator’s Dilemma”: Focusing on current customer needs causes companies to divert focus from new technologies

Market will not tolerate blue chip companies running loss-making businesses

Off-line companies may face a channel conflict

Schwab has become a leading player in the on-line brokerage industry

Companies with established market leadership have key assets such as relationships with customers, suppliers, deep industry knowledge and experienced management

Established companies have deep pockets

Off-line companies have established and trusted brands

Off-line companies can create spin-out businesses with new culture, processes, funding, etc.

There have been other technology revolutions

–From 1894 to 1903, there were 20,000 telephone companies that started in the U.S.

eCommerce Organizing ThemeseCommerce Organizing ThemeseCommerce Organizing ThemeseCommerce Organizing Themes

Technology: InfrastructureDevelopment and Mastery of Digital Computing &

Communications TechnologyBusiness: Basic Concepts

New Technologies Present Businesses and Entrepreneurs with New Ways of Organizing Production and Transacting Business

Society: Taming the JuggernaughtGlobal Nature of eCommerce Poses Public Policy

Issues of Equity, Equal Access, Content Regulation, and Taxation

““The Rest...of the Story”The Rest...of the Story”““The Rest...of the Story”The Rest...of the Story”Market Opportunity Analysis

Business Models

Customer Interface

Market Communications & Branding

Implementation

Infrastructure & Technology

Database & Datamining

Venture Capital

Intellectual Property and Copyright

Performance Metrics

Media Convergence, Ethical, Social, and Political Issues

Case Study Planetall.comCase Study Planetall.comCase Study Planetall.comCase Study Planetall.com Some industry analysts view PlanetAll as a "virtual community"

company, and otheres see it as a virtual or physical community enabler. What business is PlanetAll really in?

Should PlanetAll pursue a branded or an OEM strategy in positioning its service with alliance partners and users? Can it do both at the same time?

What factors drive user perceptions of PlanetAll's value? How effective has PlanetAll been in aiding current and potential users to realize that full value?

If positioning a firm's value proposition is a combination of segmentation and differentiation, what is the right positioning for PlanetAll in end-user markets? Propose a positioning statement of 25 words or less that you believe would aid PlanetAll in communicating key benefits and illustrating the value of its service.

What could PlanetAll as a business be worth?