MELJUN CORTES E Commerce 4

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MELJUN CORTES E Commerce 4

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  • A little too bombastic “whole new way …” Also restrictive “seamless” … But captures a couple of essential points about bringing together internal applications and external functions. Businesses in virtually every sector of the economy are beginning to use the Internet to cut the cost of purchasing, manage supplier relationships, streamline logistics and inventory, plan production, and reach new and existing customers more effectively.
  • See Roger Clarke http://www.anu.edu.au/people/Roger.Clarke/EC/ECDefns.html
  • MELJUN CORTES E Commerce 4

    1. 1. E-Comme rceBus ine s s P la ns / Bus ine s s Mode lsMELJUN CORTES
    2. 2. Bus ine s s P la n• A docume nt tha t de s cribe s how a firm will ma ke a profit s e lling its products or s e rvice s• A s e lling docume nt tha t s hould conve y the e xcite me nt a nd promis e to pote ntia l inve s tors
    3. 3. Re a s ons to Write One• Convincing yours e lf• To obta in ca pita l• Me rge rs , Acquis itions , a nd S tra te gic Allia nce s• Attra ct ke y e xe cutive pe rs onne l• He lp ma inta in focus
    4. 4. How to go a bout it?• S ta rt a s king the right que s tions• P rovide pie ce me a l a ns we rs• Don’t try to ge t it a ll right – right a wa y! It’s not going to ha ppe n
    5. 5. How long?• S umma ry Bus ine s s P la ns – About 10 pa ge s – An e xte nde d e xe cutive s umma ry – Appropria te for a s ta rt-up – S e e king s e e d ca pita l – To ga uge inve s tor inte re s t – We ll known founde rs
    6. 6. He a lthe on Bus ine s s P la n P a ye rsDoctors He a lthe on P rovide rs Cons ume rs
    7. 7. How long?• Full Bus ine s s P la n – About 10-40 pa ge s long – S ignifica nt or la te r s ta ge fina ncing – S tra te gic pa rtne rs hips
    8. 8. Wha t s hould it conta in?• Cove r P a ge• Ta ble of Conte nts• Exe cutive S umma ry• Compa ny• Ma rke t Opportunity• P roduct/S e rvice• S a le s a nd P romotion• Fina ncia ls• Appe ndix
    9. 9. Cove r P a ge• Compa ny’s Na me• Addre s s• Ma in Conta ct (CEO or P re s ide nt) – Na me – P hone Numbe r – E-Ma il• Confide ntia lity S ta te me nt
    10. 10. Exe cutive S umma ry• S hould give the re a de r a cle a r unde rs ta nding of wha t you a re up to• Minia ture ve rs ion of the comple te pla n• Ke e p it s hort (2 to 3 pa ge s ma x)• Atte mpt a dra ft be fore you write the re s t of the pla n – it will e xpos e we a kne s s e s
    11. 11. Compa ny• Mis s ion a nd S tra te gy – P a s t, P re s e nt, a nd Future• P e ople a nd Ma na ge me nt – dire ctly re le va nt e xpe rie nce to the opportunity be ing purs ue d – S kills a nd a bilitie s , motiva tions a nd commitme nt
    12. 12. Ma rke t• Who a re the buye rs ? Exa mple s ?• Qua ntify the be ne fits• Othe r me a s ure s – conve nie nce , e tc.• P a in-kille r or vita min?• Growing or s hrinking ma rke t?• Obje ctive a na lys is of compe tition• P ricing s tra te gy a nd its ra tiona le
    13. 13. P roduct/S e rvice• Ke y product/s e rvice fe a ture s a nd a cos t ve rs us be ne fits jus tifica tion• De live ry is s ue s• Afte r-s a le s is s ue s
    14. 14. S a le s a nd P romotion• Choice of s a le s cha nne ls – a na lyze ba s e d on cos t, re la tions hips with cha nne l pa rtne rs , a nd compe titive pre s s ure• Motiva ting the s a le s pe ople• P roduct/s e rvice promotion
    15. 15. Fina ncia ls• Income S ta te me nt• Ba la nce S he e t• Ca s h Flow S ta te me nt• Als o, include a s a le s fore ca s t e xpla ining how the s a le s numbe rs a re obta ine d.
    16. 16. Ca s h Flow S ta te me nt• Ha ppine s s is pos itive ca s h flow• a re cord of ca s h a va ila ble a t diffe re nt points in time• It s hows not only how much you might ne e d but a ls o whe n you will ne e d• Us ua lly monitore d monthly• Ca s h on ha nd a t be g. of month + re ce ipts – a ctua l dis burs e me nts = Ca s h on ha nd a t e nd of month
    17. 17. Income S ta te me nt• Re ve nue s – dire ct la bors a nd ma te ria ls = gros s profit or los s (GP )• GP /Re ve nue s = Gros s ma rgins (ca n be compa re d a cros s indus try)• GP – indire ct e xpe ns e s = pre ta x ne t profit or los s (P TP )• Ne t income = P TP - Ta xe s
    18. 18. Ba la nce S he e t• A me a s ure of bus ine s s he a lth• Lis ts a s s e ts a nd lia bilitie s• As s e ts include curre nt (ca s h a nd a ccounts re ce iva ble ) a nd fixe d (furniture a nd compute rs )• Lia bilitie s include curre nt (a ccounts pa ya ble ) a nd long-te rm (inve s tor owne d e quity)
    19. 19. Que s tions to a s k• How much will you ne e d to ma inta in a pos itive ca s h flow?• Whe n will you ne e d it?• Wha t form (de bt,e quity, or both) s hould it be ?Ne e d inte gra te d fina ncia l s ta te me nts
    20. 20. Ma king good proje ctions• Ca n’t a void fore ca s ting e rrors – no fore ca s t is corre ct!• Ca n a void te chnica l e rrors – incomple te or mis le a ding mode ls !S pre a ds he e ts he lp – but ca nnot re pla ce ba s ic a ccounting/fina nce knowle dge .
    21. 21. Re la tions hips Ba la nce S he e t Ca s h Flow S ta te me nt Income S ta te me ntS a le s Fore ca s t
    22. 22. E-comme rce : Wha t is it?• Ele ctronic comme rce is a me a ns of conducting tra ns a ctions tha t, prior to the e volution of the Inte rne t a s a bus ine s s tool in 1995, would ha ve be e n comple te d in more tra ditiona l wa ys —by te le phone , ma il, fa cs imile , proprie ta ry e le ctronic da ta inte rcha nge s ys te ms , or fa ce -to-fa ce conta ct [Digita l Economy II]• the a bility to buy, s e ll, a nd a dve rtis e goods a nd s e rvice s to cus tome rs a nd cons ume rs [W3C]
    23. 23. Exa mple : De ll Compute rs• De ll ha s fully inte gra te d its va lue cha in us ing Inte rne t te chnologie s – Da ily We b-ba s e d s a le s > $15m in 1999 – Cus tome r orde rs a re re la ye d to s upplie rs via corpora te e xtra ne t – Compone nts a rrive a t fa ctory J IT; comple te compute r s hippe d out in hours – Cus tome rs ca n tra ck orde r ove r We bs ite
    24. 24. EC to e -bus ine s s• Ele ctronic comme rce de note s the s e a mle s s a pplica tion of informa tion a nd communica tion te chnology from its point of origin to its e nd point a long the e ntire va lue cha in of bus ine s s proce s s e s conducte d e le ctronica lly a nd de s igne d to e na ble the a ccomplis hme nt of a bus ine s s goa l.
    25. 25. Te rminology• Goods vs . s e rvice s – Good: phys ica l ite m which is de live re d – S e rvice : a n a ct which is pe rforme d• Digita l vs . phys ica l ite ms – Digita l ite ms : a ll tra ns a ctions a re done e le ctronica lly – P hys ica l ite ms : involve logis tica l a ctivitie s s uch a s tra ns porta tion• De gre e of commoditiza tion of products – S ta nda rd/commodity: a va ila ble in la rge qua ntitie s , we ll- ide ntifie d – Cus tom-built or cus tomize d: de s igne d to cus tome r s pe c.
    26. 26. Wha t is a bus ine s s mode l?• A bus ine s s mode l is a re pre s e nta tion of the a ctivitie s of a bus ine s s• It de s cribe s wha t the bus ine s s is a bout a nd how it will work• It de fine s the compe titive pos ition of the bus ine s s by ide ntifying its va lue drive rs• It de fine s the s tructure of the bus ine s s - a s in its re la tions hip to its cus tome rs , s upplie rs , e tc.
    27. 27. Inte rne t Opportunitie s• Compa nie s ca n e s ta blis h dire ct links to cus tome rs (a nd s upplie rs ) to comple te tra ns a ctions more e a s ily• The y ca n bypa s s othe rs in the va lue cha in• The y ca n de ve lop a nd de live r ne w products a nd s e rvice s to ne w cus tome rs• The y ca n be come the domina nt pla ye r in the e le ctronic cha nne l of a s pe cific
    28. 28. The s hifting e conomics of informa tion• Re a ch• Richne s s Richne s s – Ba ndwidth – Cus tomiza tion – Inte ra ctivity Re a ch
    29. 29. Es ta blis hing the Inte rne t Cha nne l• P rovide (a t le a s t) the s a me le ve l of s e rvice tha t the y ca n ge t dire ctly from a s a le s pe rs on• P e rs ona lize the inte ra ction s o tha t cus tome rs s e e only wha t the y wa nt• P rovide ne w s e rvice s ine xpe ns ive ly (cus tome r re vie ws , FAQs ,..)
    30. 30. Fe a ture s of the Inte rne t Cha nne l• Could minimize or e limina te tra ditiona l s a le s , ma rke ting, a nd s e rvice cos ts• Allows incre a s ingly highe r le ve ls of s e rvice without incre me nta l cos ts• Firs t move rs ha ve the a dva nta ge of e s ta blis hing re la tions hips tha t ma ke it ha rd for followe rs to woo the m a wa y• Firms ma y be force d to pa rticipa te by the ir compe titors a nd cus tome rs
    31. 31. • It cos ts a lot more to ge t a ne w cus tome r tha n to re ta in a n e xis ting cus tome r• It he lps to unde rs ta nd your cus tome r ne e ds a nd pre fe re nce s• Dire ct inte ra ction with cus tome rs not only re duce s your cos ts but a ls o he lps you unde rs ta nd your cus tome rs• This is e a s ie r to do for s ta rt-ups without e xis ting va lue cha ins ; a lot more difficult for e s ta blis he d compa nie s .
    32. 32. Que s tions to a s k• How much would it cos t to provide s e rvice s tha t cus tome rs could ge t the ms e lve s online ?• How ca n individua l cus tome r informa tion be us e d to pe rs ona lize s e rvice ?• Wha t he lp ca n cus tome rs be give n by us ing the e xpe rie nce of othe r cus tome rs a nd the e xpe rtis e of e mploye e s ?• Will it be a s ignifica nt dis a dva nta ge if compe titors a re firs t to provide the s e
    33. 33. P ira ting the Va lue Cha in• It is pos s ible for a pa rticipa nt in the va lue cha in to us urp the role of a ny othe r pa rticipa nt• Exa mple s : publis he rs could bypa s s dis tributors a nd s e ll dire ctly to re a de rs ; Ama zon could de cide to publis h books of its own• S uch pira te s a re in a pos ition to de fine ne w bus ine s s rule s a nd introduce ne w bus ine s s mode ls
    34. 34. Que s tions to a s k• Ca n s ignifica nt ga ins be re a lize d by cons olida ting pa rts of the va lue cha in?• Ca n s ignifica nt va lue be cre a te d for cus tome rs by re ducing the numbe r of e ntitie s the y ha ve to de a l with in the va lue cha in?• Wha t a dditiona l s kills a nd ca pa biltie s would be re quire d?• Firs t move r a dva nta ge s ?
    35. 35. Digita l Va lue Cre a tion• The inte rne t cha nne l ca n a ls o s e rve a s a pla tform for innova tion (ne w products a nd s e rvice s without incurring tra ditiona l cos ts )• Cre a ting s e rvice s for ne w cus tome r s e gme nts• Cus tome r informa tion ca n be us e d to up-s e ll a nd cros s -s e ll
    36. 36. Que s tions to a s k• Ca n a dditiona l informa tion or tra ns a ctions s e rvice s be offe re d to e xis ting cus tome rs ?• Ca n the ne e ds of ne w cus tome r s e gme nts be a ddre s s e d by re pa cka ging curre nt a s s e ts ?• Ca n ne w s ource s of re ve nue be ge ne ra te d s uch a s a dve rtis ing or s a le s of comple me nta ry products ?• Firs t move r a dva nta ge s ?
    37. 37. Be coming the domina nt pla ye r• Firms ca n be come ca te gory de s tina tions (on-line ve rs ions of ca te gory kille r s tore s s uch a s Toys R Us )• Fa ctors tha t ma ke this pos s ible a re : – phys ica l dis ta nce is la rge ly irre le va nt – growth is not cos t prohibitive a s it us ua lly is in the phys ica l world – s e rvice s ca n be diffe re ntia te d for multiple cus tome r s e gme nts
    38. 38. Cus tome r Ma gne ts• Firms tha t be come cus tome r ma gne ts could orga nize the ms e lve s a round – a s pe cific product or s e rvice (Ama zon, Ya hoo) – a pa rticula r s e gme nt of cus tome rs (Tripod- Ge nXe rs ) – a n e ntire indus try (Auto-By-Te l, Ca rpoint) – a unique bus ine s s mode l (online a uctions )
    39. 39. Que s tions to a s k• Ca n the indus try be divide d into logica l product, cus tome r, or bus ine s s -mode l s e gme nts tha t could e volve into cus tome r ma gne ts ?• Wha t s e rvice s could a n indus try ma gne t offe r tha t would ma ke it e fficie nt for cus tome rs to s e le ct a nd purcha s e products or s e rvice s ?• Wha t pa rtne rs hips or a lla ince s would be ne e de d to e s ta blis h a critica l ma s s ?• Firs t move r a dva nta ge ?

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