4/c textbook design

1. WebConnexion
Web
Understanding the
3
http://www.ricardo.de/index_start.phtml
Global Context Launched in 1998, ricardo.de is a German-based
Internet auction company that competes throughout
of Business Europe with the American industry poineer eBay and
several other local auction retellers. To find out how
ricardo.de presents the concept of Internet-based
auctioneering to European consumers, log on.
Source: Used with permission of ricardo.de
E-Commerce at Bay in Europe
after the eighteenth-century English economist David Ricardo, an early
Because U.S. business got such a big head start in electronic commerce,
champion of free markets.
some experts believed that most European e-businesses would end up being
copies of successful American enterprises. For example, the dominance of Potential Investors
eBay Inc. (www.ebay.com)—one the most visible of all dot.com business-
But just after the firm’s mid-1998 launch, one problem after another
es—in the online auction market seemed to prove the point. But don’t tell
seemed to arise. First, some potential investors expressed concerns that
that to Ricardo.de AG (www.ricardo.de/index_start.phtml), an upstart After reading this chapter, you
Ricardo.de lacked a clear strategy for differentiating itself from eBay.
German auction firm that is creating a growing international presence for should be able to:
Moreover, eBay appeared to get the inside track in Germany when it
“We figured it’s better itself and gaining on the American-based industry leader in Europe.
acquired Alando.de (www.alando.de), a Berlin-based online auction firm
to do e-commerce Describe the rise of international busi-
1
eBay, of course, is a very young firm itself. Essentially started as a
that was already up and running. Alando.de also had the local advantage of ness, identify the major world market-
cyberspace flea market in 1995, the company adopted its present name in
than write about it.” being a partner with T-Online (www.t-online.de), Europe’s largest Internet- places, and discuss the United States’
1997, went public in 1998, and acquired the upscale auction house
access provider.
— Stefan Wiskemann, major trading partners.
Butterfield & Butterfield in 1999. It currently boasts 1,600 different product
Cofounder of Ricardo.de Ricardo.de Ricardo.de’s owners dealt with the first concern by formalizing
categories and about 4 million registered users. And unlike many dot.com Explain how different forms of competi-
and announcing their strategy. Rather than concentrate (like eBay) on used
PART ONE Understanding People in Organizations
businesses, eBay is also already quite profitable—it takes a percentage of tive advantage, import-export
articles and collectibles, they would sell only new merchandise—mostly
each sale from every successful auction transaction. Not surprisingly, then,
2
balances, exchange rates, and foreign
discontinued or overstocked electronics, appliances and computers bought
eBay has attracted new competitors. Both Amazon.com and Yahoo.com, for competition determine the ways in which
at bargain prices from both wholesalers and retailers. Ricardo.de also
example, have launched auction sites. countries and businesses respond
promised to hold regular five-minute quot;livequot; auctions with a moderator call-
to the international
ing the action, chatting with bidders, and congratulating winners.
Europe
environment.
The approach seemed to make sense to local investors, who started lin-
In Europe, however, Ricardo.de has emerged as one of eBay’s most formida-
Discuss the factors involved in deciding
ing up for the IPO. But the optimism surrounding the venture began to melt
ble challengers. The three young German entrepreneurs behind
3
to do business internationally and in
under the heat of two more setbacks. First, a group of traditional auctioneers
Ricardo.de—Stefan Glaenzer, Christoph Linkwitz, and Stefan Wiskemann—
selecting the appropriate levels of inter-
filed suit, citing a 100-year-old German law making it illegal to sell new
actually started out in 1997 to create a publishing business. But when they
national involvement and international
goods at public auction. Second, on the very eve of the IPO, a major under-
auctioned off a new Mercedes A-Class car on the Internet to promote an
organizational structure.
writers backed out because of a dispute with the lead investment banker.*
online business directory that they had just published, the overwhelming
Describe some of the ways in which
response caught their attention. quot;We figured it’s better to do e-commerce
*Our opening story continues on page 000
4
social, cultural, economic, legal, and
than write about it,quot; quips Wiskemann. They named their new enterprise
political differences among nations affect
international business.