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  • Pure speed. Interactions and transactions can occur instantly. New products and services can appear, gain market share, and cannibalize their predecessors in a matter of days. Business processes and decision-making must accelerate to “Web time” simply to remain competitive; eBusiness customer don’t tolerate delay. Total access. The Internet obliterates the limits of geography, time, and market reach. Every business and millions of individual consumers are on line. An electronic business can operate 24x7 around the world. Low cost. The economics of electronic transactions are vastly different. There’s less “friction” in connecting buyer with seller and much less overhead in completing transactions. In banking, for example, transaction costs have been reduced for $.70 - $.85 /transaction to $.03 - $.05. Customer control . The customer controls the interaction with suppliers and can readily comparison shop. For many retail sales, the point of transaction shifts from the seller’s store to the buyer’s laptop. Sophisticated buyers demand – and receive – highly personalized and customized products and services. No barriers . Entry barriers have “virtually” disappeared. Small, agile, innovative competitors can design themselves as eBusinesses and grow very fast. Mere size carries less weight. Companies with bricks and mortar and established brands enjoy advantages, but nimbleness isn’t always among them. Interdependence. In electronic markets, all the players in a value chain are interconnected, and the information flow and business processes spanning them must be seamless. A company’s performance relies on that of its many close business partners. Proliferation of business models. There’s no limit in sight to the number of ways to play in electronic markets. We see disintermediation as the inefficiencies of middlemen are squeezed out, and reintermediation as companies launch value-adding brokering services.
  • What have well established firms done? A few successes and contrasting examples which we will discuss; but in general a lot of analysis, with little action stemming from it as the market changes fast, and the resistance to change grips the existing leadership. Few firms are self starting, most of them needed an event to take action. There is a lot of complacency, and much denial and explanation of why the bulk of the eBusiness world doesn’t really apply to them: “ this is a complex industry, you need scale to enter” pharmaceutical distribution - oops “ we are the dominant player with close customer relationships, steel isn’t like consumer products” - steel - oops eSteel “ we are business to business (or professional) , not retail/consumer” oops, Pfizer Zoloft eCommunity, Reuters, Any, most manufacturers... The new players are more than ever looking to solve customer's problems as selflessly as ever before. This type of approach leads to rapid market learnings that help them discover new opportunities and business models. Most firms that have taken action find unexpected benefits that are usually well beyond their initial expectations.
  • eEducation

    1. 1. eBusiness Discussion Document “ Introduction/Education”
    2. 2. Hierarchy of Web Interactions Start ‘Simple’ and evolve to support strategy Complexity of Implementation Business Value Provided Marketing presence Static pages; searchable site One-way communication Extend to more customers Simple Secured access for external partners Exchange information with customers Multimedia; Database applications Interactive Link business process within supply chain Integration with internal systems Administrative automation Financial transactions Collaborative environments Integrative
    3. 3. eBusinesses Concepts What Is eBusiness?
    4. 4. eBusinesses Concepts What Is eBusiness? <ul><li>eCommerce is a set of technologies, integrated applications, and multi-enterprise business processes that link enterprises and individuals together. </li></ul><ul><li>e commerce deals with using the Internet, digital communications and IT applications to enable the buying/selling process. </li></ul><ul><li>eBusiness is not only about “technology” or “e-commerce.” </li></ul><ul><li>eBusiness involves the continuous optimization of an organization's value proposition and value-chain position through the adoption of digital technology and the use of the Internet as the primary communications medium. </li></ul><ul><li>eBusiness is the strategic use of electronic communication and information technologies to accelerate the achievement of organizational goals. </li></ul>
    5. 5. eBusinesses Concepts CRM & Marketing 1/1
    6. 6. eBusinesses Concepts CRM & Marketing 1/1 <ul><li>Customers Relationship Management and Marketing 1/1. </li></ul><ul><li>Differentiation </li></ul><ul><li>Innovation </li></ul><ul><li>Convenience </li></ul><ul><li>Adaptability </li></ul><ul><li>Listening </li></ul><ul><li>New Products </li></ul><ul><li>Bundling </li></ul><ul><li>Reduce Cost </li></ul><ul><li>Customer Service </li></ul>ACQUIRE ENHANCE RETAIN
    7. 7. eBusinesses Concepts CRM & Marketing 1/1 Customer Needs Customers Acquire New Customer Relationship Retain and Enhance Customer Relationship Mass Mar keting 1 / 1
    8. 8. eBusinesses Concepts Web Pages?
    9. 9. eBusinesses Concepts Web Pages <ul><li>Web Pages. </li></ul><ul><ul><li>Static pages at the beginning with Marketing Presence Purposes. </li></ul></ul><ul><ul><li>Business Statement declaration (Mission, Vision, Objectives, Organization chart) </li></ul></ul><ul><ul><li>One-way communication, using e-mail as a complement </li></ul></ul><ul><ul><li>General and basic public services. </li></ul></ul><ul><ul><li>Current/Next generation involves two-ways communication (Exchange information with customers) </li></ul></ul>
    10. 10.
    11. 12. eBusinesses Concepts Hubs, Portals?
    12. 13. eBusinesses Concepts Hubs, Portals <ul><li>Internet business may be established along the lines of two product categories: </li></ul><ul><li>Products - these sites are called Hubs: </li></ul><ul><li>Vertical Hub: Is a narrowly defined marketplace of buyers and sellers who are in a similar industry. </li></ul><ul><ul><ul><li>Farmers and agricultural suppliers: all are in a similar industry and may be able to buy and sell from and to each other . </li></ul></ul></ul><ul><li>Horizontal Services: Is a service that operates across a variety of vertical hubs </li></ul><ul><ul><ul><li>Weather information: both the agricultural and hospitality industries are dependent about this information and would use such a service even though neither industry works together . </li></ul></ul></ul>
    13. 14.
    14. 15. eBusinesses Concepts Hubs, Portals <ul><li>Information - these sites may be called Portals . </li></ul><ul><ul><li>Portal Sites: offer &quot;market intelligence&quot; information. They Pull together public and proprietary information from multiple sources. </li></ul></ul><ul><ul><ul><li>A financial portal could offer information on several exchanges and indexes as well as proprietary market commentary . </li></ul></ul></ul>
    15. 17. eBusiness Concepts Vertical versus Horizontal eServices Source: Kellogg ebusiness
    16. 18. eBusinesses Concepts B2C Versus B2B?
    17. 19. eBusiness Concepts B2C Versus B2B B2C Connecting consumers to information, products, and services they want. Amazon, eTrade, NetFlowers, Mp3 B2B Improving the efficiency of buyer-seller transactions in business markets Cisco, TNTLogistics, e-steel, Dell, e-stamp
    18. 22. The Realities of the Networked World <ul><li>The half-life of ideas, information and knowledge </li></ul><ul><li>Smart people everywhere have global access to information </li></ul><ul><li>The 2-3 top players in an industry are likely to come to similar conclusions by looking at the same data </li></ul><ul><li>eBusiness is like a Sunday afternoon NFL football game </li></ul><ul><li>The ultimate competitive advantage comes from four things: rapid learning, rapid cycle execution, hassle-free partnering processes, and “step-ahead” service models </li></ul>
    19. 23. Survival In The Net Economy Requires . . . Vision Agility Speed Innovation Customer-Focus
    20. 24. Value Chains Move to Value Networks Value Chain Your Company e Alliance Customer Customer Customer Customer Customer Supplier Supplier Supplier Supplier Supplier Suppliers Customers Networked Value Web e Market Suppliers Customers Your Company
    21. 25. The eBusiness Challenge A view of the new eBusiness world <ul><li>Conventional processes no longer achieve results because their assumptions no longer apply </li></ul><ul><li>Stability </li></ul><ul><li>Single cause-effect </li></ul><ul><li>1-to-1 relationships </li></ul><ul><li>Predictable direction </li></ul><ul><ul><ul><ul><li>Rapid change; speed </li></ul></ul></ul></ul><ul><ul><ul><li>Multi-directional interactions </li></ul></ul></ul><ul><ul><li>Networked relationships </li></ul></ul><ul><li>Parallel Development Paths </li></ul>Conventional Assumptions eBusiness Environment
    22. 26. The eBusiness Environment More ways that the eBusiness world is truly new <ul><li>Pure speed : Interactions and transactions can occur instantly. New products and services can appear in a matter of days. </li></ul><ul><li>Total access : The Internet obliterates the limits of geography, time, and market reach. </li></ul><ul><li>Low cost: The economics of electronic transactions are vastly different. </li></ul><ul><li>Customer control : The customer controls the interaction and can readily comparison shop. </li></ul><ul><li>Interactivity: The Internet is two-way, individually addressable communication, allowing for interactive, real-time communication with customers, suppliers, regulators, citizens- individual but on a mass scale </li></ul><ul><li>Lower barriers : Entry barriers have “virtually” disappeared. Agile eBusiness competitors can grow fast. Size carries less weight. </li></ul><ul><li>Interdependence : In electronic markets all the players in a value network are interconnected. </li></ul><ul><li>Proliferation of eBusiness models : There’s no limit to the number of ways to play in electronic markets. </li></ul><ul><li>Scalability: The Web allows you to grow your capacity or simply respond to a growing number of customers at virtually no incremental cost </li></ul>
    23. 27. eBusiness in Well-Established Companies Overview of Market Learnings (based on research of 50+ Fortune 500 firms) <ul><li>Few clear-cut examples of success in eBusiness by well established firms (except for high-tech companies), although some traditional firms really “get it”. </li></ul><ul><li>Conventional measures of success (revenue, operating margin, and market share) are not the only indicators of success in this new economy. </li></ul><ul><li>Big rewards for early entry in order to gain market share & obtain best alliance partners for credibility </li></ul><ul><li>An emerging factor in a firm’s ability to form new alliances, create cutting edge partnerships, and close market-dominant acquisitions is the firm’s stock appreciation potential - the new deal-making currency </li></ul><ul><li>Customers have broader options (including price comparison, increased competitive offerings, and the ability to self-bundle product and services to uniquely meet their needs). </li></ul><ul><li>Innovators are looking beyond their own value chain . Market leaders are deploying multiple, flexible business models in an expanded Value Web in order to provide customer-centric solutions. </li></ul>
    24. 28. Redefining the Value Chain Producers and Verticals in the Agriculture Industry
    25. 29. <ul><li>Direct link to existing customers </li></ul><ul><li>Passive sales process - only buyers who know the company visit site </li></ul><ul><li>Costs borne by vendor; drain on IT resources </li></ul>The eBusiness Environment the Seller-Driven Model <ul><li>No comparative sourcing </li></ul><ul><li>Limited data </li></ul><ul><li>Useful if committed to single vendor </li></ul>PROS CONS Seller Buyer Example:
    26. 30. The eBusiness Environment the Buyer-Driven Model <ul><li>Good venue for selling perishable inventory </li></ul><ul><li>Reduction of pricing power; Betrand Theory </li></ul><ul><li>Limited selection due to seller reluctance </li></ul><ul><li>Scale required </li></ul><ul><li>Fulfillment compromised </li></ul><ul><li>Buyer “controls” price </li></ul>PROS CONS Seller Buyer Example:
    27. 31. The eBusiness Environment the Neutral Exchange Model <ul><li>Equilibrium pricing </li></ul><ul><li>Largest buying community </li></ul><ul><li>Accurate transaction- based market data </li></ul><ul><li>Direct, low-risk channel </li></ul><ul><li>Lower sales cost </li></ul><ul><li>Exposure to comparison shopping </li></ul><ul><li>Equilibrium pricing </li></ul><ul><li>Best selection </li></ul><ul><li>One-stop shopping </li></ul><ul><li>Best-in-class service as benchmark </li></ul>PROS CONS Seller Buyer Example:
    28. 32. Benefits From An Exchange <ul><li>LESS: </li></ul><ul><li>sales and marketing costs </li></ul><ul><li>reliance on agents </li></ul><ul><li>BETTER: </li></ul><ul><li>production planning and strategy due to increased market knowledge and global reach </li></ul><ul><li>LESS: </li></ul><ul><li>transaction time and search costs </li></ul><ul><li>reliance on agents </li></ul><ul><li>BETTER: </li></ul><ul><li>sourcing and strategy due to increased market knowledge and global reach </li></ul>Buyers Sellers
    29. 33. Common Themes 4 Speed is essential!!! “ Internet Time” It’s not about technology, It’s about business!!!!