Presentation on theme: "Electronic Commerce: Business Models, Strategies, Investment and Implementation in the Network Economics August, 2008 Minder Chen, Ph.D. Associate Professor."— Presentation transcript:
1Electronic Commerce: Business Models, Strategies, Investment and Implementation in the Network Economics August, 2008Minder Chen, Ph.D.Associate Professor of Management Information SystemsorWeb site:
2ReferenceEC Books Net Ready, by Amir Hartman and John Sifonis, McGRaw-Hill, 2000.Now or Never, by Mary Modahl, Harper Business, 2000Designing Systems for Internet Commerce by G. Winfield Treese, Lawrence C. Stewart (May 1998) Addison-Wesley Pub Co; ISBN:Net Results: Web Marketing that Works by Rick E. Bruner (Editor), Cybernautics, Usweb Corporation Hayden Books; ISBN: E-Business : Roadmap for Success by Ravi Kalakota, Marcia Robinson, Don Tapscott (June 1999) Addison-Wesley Pub Co (C); ISBN: Customers.Com: How to Create a Profitable Business Strategy for the Internet and Beyond by Patricia B. Seybold (Contributor), R. T. Marshak, Ronni Marshak 1 Ed edition (November 1998) Times Books; ISBN:Net Success : 24 Leaders in Web Commerce Show You How to Put the Web to Work for Your Business by Christina Ford Haylock, Len Muscarella, Ron Schultz, Steve Case (May 1999) Adams Media Corporation; ISBN: Creating the Virtual Store: Taking Your Web Site from Browsing to Buying, by Magdalena Yesil, Published by John Wiley & Sons, November 1, 1996
3Course DescriptionThis 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.
4Seminar LeaderDr. 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 E-Commerce 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 object-oriented 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.
6Outline (I) EC Introduction Network Economy and Dynamic Trade The cycle of electronic commerce EC and Business Process EC statistics Network Economy and Dynamic Trade Information rules Network externality and network economics New supply and demand curves Dynamic trade EC Strategies 4Cs strategy Content, Community, Commerce Revenue streams E-conomy Map and EC Strategies EC Business Models B2C Virtual stores: physical and digital goods and services Infomediaries: Seller-side Informediaries: Buyer-side Infomediaries: B2B marketspace 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
7Outline (II) EC Investment and Opportunities 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 Web Technology and EC Software Overview Internet infrastructure and services Web technology overview EC software Internet Security and Electronic Payment SystemsEC Implementation Evolution of EC implementation EC site life cycle EC site design issues Promotion and marketing Net readiness evaluationEC Investment and Opportunities Internet / EC industry analysis EC Firms and Stock market EC investment pyramid
8The cycle of electronic commerce EC and business process EC statistics EC IntroductionIntroductionThe cycle of electronic commerceEC and business processEC statistics
10Electronic CommerceElectronic 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.
13The Low-Friction Market "[The Internet] will carry us into a new world of low friction, low-overhead capitalism, in which market information will be plentiful and transaction costs low."-- Bill Gates, The Road Ahead"Where there is a friction, there is opportunity!"-- Net Ready.
14The Cycle of Electronic Commerce AccessSearchesQueriesSurfingFollow-on SalesCustomersOnline AdsOnline OrdersStandard OrdersDistributionOnline: soft goodsDelivery: hard goodsElectronic Customer Support
15Components of Electronic Commerce ProcessesInstitutionMarketingSalesPaymentFulfillmentSupportGovernmentMerchantsManufacturersSuppliersConsumersElectronicCommerceNetworksIntranetExtranetInternetSource: adapted from David Kosiur, Understanding Electronic Commerce, Microsoft Press, 1997.
16Generic Framework of Electronic Commerce Electronic Commerce ApplicationsSupply Chain Management Online Marketing and AdvertisingProcurement & Purchasing Online ShoppingAudio and Video on Demand Online Financial TransactionEntertainment and Gaming Education and ResearchCommon Business Services Infrastructure(Security/Authentication, Electronic Payment, Directories/Catalogs)Technical standards for electronic documents, multimedia contents, business transactions, and network protocolsPublic policy, legal, economical development, and privacy issuesMultimedia Content & Network Publishing Infrastructure(Digital Video, Electronic Books, World Wide Web)Messaging & Information Distribution Infrastructure(EDI, , HyperText Transfer Protocol)Information Superhighway Infrastructure(Telecom, Cable TV, Wireless, Internet)Adapted from: Kalakota and Whinston, Frontiers of Electronic Commerce, Addison Wesley, 1996, p. 4.
17EC and Business Processes SellerCustomerPhone,fax,Send infoRequest infoProvideInfoGetcustomerinfoFulfillorderSupportIdentify needFind sourceEvaluate offeringsPurchaseOperate, Maintain, RepairData sheets, catalogs, demosWeb surfingWeb searches, web adsWeb siteNewsgroupsNetcommunitiesCorporate DatabasesDemos,reviewsWeb siteCredit cards, e-cashP.O.sEDIDeliver soft goods electronicallyWeb site, phone,fax, , ing list
18World Wide Internet Commerce Forester Research, Inc. June 1999
19Business Internet Commerce Trends B2C: Business to ConsumerB2B: Business to BusinessReference:
20Business-to-Business E-Commerce International Data Corporation forecasts that business-to-business e-commerce revenue will jump from $80 billion worldwide in 1998 to $1.1 trillion in Forrester Research believes that number will go even higher to $1.3 trillion by 2003.Business-to-Business -- Vertical IndustriesComputing and Electronics: For this year, businesses will invest $50 billion in computers and other electronic equipment online. Increase to $319 billion by 2002.Motor vehicles: Companies will spend $9 billion online to purchase fleets of cars and trucks this year. 2002—grow to $114 billion—more than a 1000% increase.Online utilities: Online trades of $15 billion in 1999 will grow to $110 billion by 2002.Food and agriculture: Expected to be about $3 billion in $20 billion by 2002.Pharmaceutical and medical: Forecasted $1 billion this year. Increase 20-fold by (Source: Business 2.0, March, 1999 re: Forrester Research)
21Statistics Holiday Season 1998 By 2003 . . . 2.1 million households shopped online for the first timeGenerated $2.3 billionVirtually all (98%) of AOL shoppers said they would shop online again in the next 6 months (Source: Jupiter Communications)ByConsumers 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)1% of 5 million US merchants are able to collect payments via the Internet in 1999.10% E-merchants by year 2003.
23Are increasingly time-starving Are not solely motivated by price AOL FindingsBuy brandsSeek convenienceAre increasingly time-starvingAre not solely motivated by priceRequire simplicity
24Network Economy and Dynamic Trade Information rulesNetwork externality and network economicsNew supply and demand curvesDynamic trade
25Changes in the Net Economy Business environmentLocal / Physical Global /VirtualBusiness assetsTangible IntangibleBusiness changePeriodic ContinuousBusiness productionMass Production Mass Customization Mass Personalization
26Net Economy 1940s - 1980s 1990s - 21st Century Manufacturing to information economyLocal - regional - national - multinationalTangible brick-and-mortar assets: offices, shops, service centers, and warehouse1990s - 21st CenturyNet economy:Information & KnowledgeCommunication and interactionsGlobal and virtualBusiness Focus: Information, channel, flow, customer loyalty, reliable service, relationshipIntangible assets: Knowledge, experiences, relationships
28Network and Information Economy Information is costly to produce but cheap to reproduce.Price information according to its value not its cost.Managing intellectual property.Maximize the value of your intellectual property, not the terms and conditions that maximize the protection.Information as an “experience good”Consumers must experience it to value it.Brand and trust building is critical.The economics of attentionA wealth of information creates a poverty of attention.Source: Information Rules
30Information Commodity Market Competition among sellers of commodity information pushes prices to zero.Personalize your product and personalize your pricingKnow your customerDifferentiate your prices when possibleUse promotion to measure demandsNetwork effects lead to demand side economies of scale and positive feedback.Information has its greatest value when it is fresh.
31Popularity Adds Value in a Network Virtuous cyclePositive Network ExternalityVicious cycleValue to UserNetworksReal: LAN, Internet, FaxVirtual: Virtual community, Chat room, Instant messengerNumber of Compatible User
32Supply/Demand FlipClassic EconomicsPriceQuantityDemandSupplyNetwork EconomyDemandPriceSupplyQuantityIn the network economy, the supply curves slope down instead of up and demand curves slope up instead of down.The accelerating expansion of knowledge and technology simultaneously pushes up the demand curve while pushing down the supply curve.Upward demand curves: Network externalityDownward Supply Curves: Compounded learning curve, Moore's Law
33The Internet Increases Apparent Supply Old apparent supplyNew apparent supplyPriceActualsupplyQuantityInternet increase apparent supplyApparent quantity risePrice fallSource: Now or Never, Mary Modahl, HarperBusiness, 2000
34Challenge Consumers: Everything on the Internet should to be free. Merchant: How can I make a profit if everything is free.Examples:Free web browsers: Netscape Communicator and Internet ExplorerFree Juno, mail.yahoo.com and hotmail.comFree Internet Access: Freeserve in BritainFree PC: eMachine and CompuServe; Free-PCFree web hosting: Geocities, Angelfire, ZoomFree ...All tangible and intangible items that can be copied adhere to the law of inverted pricing and become cheaper as they improve.Anticipate this cheapness in your pricing strategy and product/service development strategyGilder's Law$250Cost of a 3-minuteLong Distance CallPrice$01930Year1999
35Dynamic Trade: Perfect Market Customer service is more important than product sellingFederal Express: CertaintyReal-time demand drives productionDell: Build-To-OrderPricing matches market conditionsName your price (reversed auction): PriceLine.comAuction: EbayLeveraging technology to satisfy current customer demand and with customized response.
36Traditional vs. Dynamic Trade Speed from engagement to transactionWeeks vs. MinutesProduct distributionSeller-selected vs. Buyer-selectedPricingProduct price list vs. Market-determined priceProductionPre-sale vs. Post-sale (Dell’s BTO)Customer relationshipsStandard vs. Targeted and CustomizedStrategic assetLocation vs. Visibility and Customer Database
37Dynamic Trade Self-Test Rate each of the following criteria in your market. (3=high, 2=medium, 1=low)Commodity marketPerishability of inventoryCapital intensityConfigurability of productsCustomers' perceived investment levelThreat from new kinds of competitionChannel volatilityTOTAL: _____________
38Electronic Commerce: Strategies and Business Models
40Moving Your Business Online Companies are motivated by either fear or greed to move to their businesses to the net.To .com your company is becoming an imperative.They have to obsolete their current business models and work very hard to search a new business model.Your competitor is justone-click away
41Electronic Commerce Applications and the Cycle of Commerce Seller's Cycle of CommerceServiceSalesBilling/CollectionsMarketingProduction/LogisticsEnterprise Information Server
42Electronic Commerce Applications and the Cycle of Commerce Buyer's Cycle of CommerceProcurementOperationReceiving/LogisticsShopping/TestingPaymentEnterprise Information ServerTime
45"Word of mouth" factor gets amplified on the Net CustomersObsess over your customersRemember that the Web is an infantWhat do you have to offer that the physical world cannot in order to attract customers?If you make one customer unhappy, he won't tell five friends -- he'll tell 5,000 on newsgroups, list servers, and so on."Word of mouth" factor gets amplified on the NetThe shifts of balance of power away from business and toward customer.- Jeff Bezos
46Self Assessment: Customer Caring What do your customers need? What requests do they make of you?How do you respond to customer’s requests?What kind of information can they get from you?What process do they go through? How do you produce and distribute it to them?What are the steps that your customers have to taketo complete a purchase transactions?How do they get shipment status?How are exceptions handled?What do you need from customer? What do you know about customer preferences?What information could you use to better target yourproduct and service offerings?What can you do to build relationships? How can you engage customers in an ongoing dialog?How can you continue to provide information, products,and services to reinforce your ongoing relationships?
47Consumers are increasingly engaged in an active and explicit dialogue with companies. The role of the consumer is being transformed from passive buyer to active participant in co-creating valueThe market is no longer a "target," but must be recognized as an ecosystem. It's a forum for value creation and extraction, and the company is part of an enhanced network--one that includes its suppliers and partners, and its customers. The network's fulfillment goes beyond business-to-business or business-to-consumer relationships to a consumer-to-business-to-business relationship.Consumer Centricity at
485 Steps to Success in EC Set strategy Focus on the end-customer Make it easy for customers to do business with you!Focus on the end-customerIdentify end-customers and their needsDistinguish from channel partnersIdentify other internal and external stakeholdersRedesign customer-facing business processesWire your company for profit and successFoster customer loyaltyDetermine and prioritize objectivesDecide what to measure and how to measureMeasure profitability and other critical success indicatorsSource: Adapted from Customer.com by Patricia Seybold, 1998
49Foster Customer Loyalty The key to profitability in ECAchieving higher revenues via customer acquisition and customer retentionAcquisition costsBase profitRevenue growthCost savingsReferralsPrice premiumBenefits:No-cost acquisitionExperienced customerStrategiesIncrease customer "inventory"Increase customer "tenure"
508 Critical Success Factors Target the right customersOwn customer's total experienceStreamline business processes that impact the customerProvide a 360-degree view of relationships with your customersLet customers help themselvesHelp customers do their jobsDeliver personalized servicesFoster community
51Target the Right Customers Know who your customers and prospects areFind out which customers are profitableDecide which customers you want to attract (or keep from losing)Decide which customers influence key purchasesFind out which customers generate referralsDon't confuse customers, partners, and stakeholders
52Own the Customer's Total Experience Deliver a consist and branded experienceFocus on saving customer time and irritationOffer a peace of mindWork with partner to deliver consistent service and qualityRespect the customer individualityGive customers control over their experience
53Streamline Business Processes That Impacts the Customers Start identify the end customerStreamline the process from the end customer's point of viewStreamline the process for key stakeholdersContinuously improve the process based on customer feedbackGive everyone involved a clear view of the process
54Customer Information Processes: Media Marketing Pre-sales Sales Post sales supportDeliveryField serviceQuality controlBillingProduct development & productionMediaWebKioshPhoneMailFaxHand-held
55Virtual Communities Virtual Community ContentHard goodsGamesServicesMoneyContentDemographicsUsersProvidersAdvertisingOtherWebsitesAdvertisers
56Consumers' Needs for Community Communities of transaction: Facilitate the buying and selling of products and services and deliver information related to those transactions.Bring in a critical mass of sellers and buyers to facilitate certain types of transactions.Virtual VineyardsCommunities of Interest: Bring together participants who interact extensively with one another on specific topics.Higher degree of interpersonal communication.GardenWeb:Motley Fool created by David and Tom Gardners on AOLParents Place:Communities of FantasyChat rooms: Red Dragon InnVirtual Team competition at ESPNet: espnet.sportszone.comCommunities of Relationship: People come together around certain life experiences that are very intense and can lead to the formation of deep personal connections.Cancer Forum on CompuServe
63Sources of Revenue on the Web Transaction: Net merchants this year will hawk some $518 million worth of goods, from CDs to Computers. Total cybersales could swell to $6.6 billion by 2000, figures Forester Research.Subscription: For now, most content on Web is free. Still sales of subscription services on the Web will hit $ 120 million this year, says Jupiter Communications. By 2000, the number is expected to be $966 million.Advertising: The Net is emerging as a medium uniquely suitable for advertisers looking to reach target customers directly. Spending on Web ads will hit $312 million this year, growing to $5 billion by 2000, Jupiter figures.
64Multifaceted Model for Web-Based EC Design ATTRACT: HitsCommunities of interestChanging topics for repeat customersFeatures that encourage customers to exploreENGAGE: LeadsSpecial areas encourage customer to register (i.e. selection of articles customized for visitors interests)PARTICIPATE: Sales revenueFree download (video, audio, & software)ShoppingChat and NewsSubscriptionJUMP: Advertising revenueOther products of interest to customerOther sites of interest to customerAttractJumpEngageParticipateAdapted from Netscape Communications Inc., 1996.
65EC Companies Transform the Revenue Mix PricingThe mix:Who pays forwhat andhow much.ValueCustomersNewValuesNewPricingNewCustomersHighly interrelated!Source: Now or Never, 2000
66The Revenue Mix: Examples Finding new customersOnsale.com sales at costsBuy.com creates advertising as a revenue streamOffering new valueeBay buyers see auction as a new form of entertainmentAt eBay there are some specialized sellers for them selling on eBay has become an official part-time jobBuilding new pricing structureseBayIf 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.Compare eBay with classified ad
67The Revenue MixWhy is it difficult for the traditional companies to change?Finding new customers"The rearview mirror trap". Existing customers reflect an industry's past more than its future. A traditional company in the market leader position makes it hard to see new customers coming."Investor want to talk to their broker on the phone!"It delayed a deployment of online trading of a major brokerage house by more than two years.Offering new valueTraditional companies have difficulty understanding new value.One baby bell executive think Yahoo is just another damn yellow pages. "People want to find local businesses!"Building new pricing structuresEquity 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.
68Consumer Technographics Segments in the US Early AdoptersPrimary MotivationMainstreamsCareerFamilyEntertainmentFast Forward12%New Age Nurturers8%Mouse Patatoes9%HighOptimistsTechno-strivers7%Digital Hopeful7%Gadget Grabbers9%Income LevelLowAttitude Toward TechnologyHandshakers7%Traditionalists8%Media Junkies5%HighPessimistsSidelined Citizens28%LowLaggardsSource: Forrester Research Inc.
69Quick Test for Technographics More Men More WomenMore Educated Less EducatedHigh Income Low IncomeHave Children No ChildrenYounger Age OlderNumber of new usersMainstreamsEarly AdopterLaggardsTime
70Technology-Fit: Customer and Product HighSecond WaveEarlier AdopterAAFedExpMicrosoftJenny CraigChryslerCustomer Need for Product InformationWeb LaggardsSecond WaveNikePepsiTideDenny'sLowSource: Forrester ResearchCustomer Demographics MatchPoorHigh
71EC Development Process Competitive and capability analysisKnowledge building and market evaluationEC Business model design and feature identificationEC technical architecture designApplication development and deploymentContinuous performance evaluation and innovation
72Opening Online Business Identify a need and a nicheDetermine what you have to offerSet your business goalsDesign your EC architectureAssemble your EC teamsBuild your web siteSet up a system to handle salesProvide customer servicesAdvertise your online business (online and offline)Evaluate your performance and moving on
73Keys to Long Term Success Fast deploymentEvolutionary implementationFirst mover advantagesPromotion, promotion, promotionCustomer focus and servicesInteraction with customersIntegrating emerging technologiesRedefining and redesigning business modelsComprehensive database and data warehouse designIntegrating back office operations with the virtual store fronts
74Selling Points of Virtual Stores "The Internet is going to become a channel of distribution." -- The president of a major U.S. advertising agencyAnother firm advertise its virtual store as "The parking is easy, there are no checkout lines, we are open 24 hours a day, and we deliver right to your door."The trend toward point-of-sale moving into the home is accelerating.
75Benefits to the Merchants Increased sales of existing products to generate additional revenuesUse the web to target their offers to a niche market"The store is always open!"Establish better relationships with customers.Low cost information distributionIncreased speed to marketExpanded delivery channelsGlobal exposure and reach
76Benefits to the Consumers ConvenienceInformativeValue presented upfront: Demo and free downloadNo long wait timesEasy flow and navigationSearch capabilitiesEngaging presentationConstant updatesEasy to buy
77Five Strategies for .com-ming Your Business 1. Check Your DNAIs the Net part of who you are as an enterprise? Or is it something foreign to you?Are you ready to embrace the Net economy?Do you have people on your team who have experience in this area? People who get it? More important, do you have people on your team who are passionate about the Net? Or are they expecting business as usual? Do you have the right people on the right projects?Think about connections outside your enterprise-are you working with customers, partners and suppliers to help you retool your business. Are you learning from them and are they learning from you? Are you identifying key areas where you can make your interactions more productive and successful?
782. Think Portal 3. Think Services 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 ServicesIt'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.
794. Think Anywhere, Anytime Once you've developed those services --which ideally will grow out of your enterprise's core competencies -- you need to deliver them ubiquitously.If they're only available on PCs, you're going to severely limit their utility -- and your enterprise's growth and profits.5. E-commerce is Not the Future. It is now!The marketplace is moving now. Your competition is moving now.E-commerce is not about the future; it's about today. Start doing e-commerce.If you haven't prepared for holiday season 2000 for consumers, partners, and suppliers, you're already behind.Convert your communication, supply chain and customer relationship channels to the Web. Many companies have had difficulty with this due to existing relationship conflict, but the reality is that you have to do it.Identify one area of high leverage and start there, time is your enemy so get moving today.The Web is proving to be more reliable, lower cost, and user-friendly. Use it to its full potential.
80What To Do Now 1. Define your eBusiness strategy FAST 2. Assess readiness:customersproducts/servicesorganizationtechnologyinfrastructureRapid innovation
81What To Do Now 3. Identify the target: Business objectivesCustomer segmentApplication area4. Build it in less than 6 months-- Flexibility-- Scalability-- extendibility5. Keep extending the function -- new products and services, new customer interfaces, enhance performance, security and capability6. START NOW !You are never done!
82Four Strategies to Start Online Business IntegrationSubsidiaryPartnershipBuyoutLowSlowLowCostRiskTime to MarketHighFastHigh
88Kinder Toys is Moving to www.toydomain.com Becoming VirtualEgghead to Egghead.comComputer Literacy to Fatbrain.comRomac International to KForce.comKinder Toys is Moving to(Find us on the web after June 1st)
89Your 3 Biggest Problems/Opportunities What should our strategy be?How do we build it in 3 to 6 months?How do we stay on the edge of innovation for life?
90E-conomy Map HP VerticalNet HomeCare HomeCare Products InfoCenter COINsHPTesting &MeasurementVerticalNetTestandmeasurement.comBusinessEnterpriseAffinityGroupsHomeCareProductsHomeCareInfoCenterConsumersIndividualThe Delivery Vehicle(The Container)The Message(The Content)Adapted from: Net Ready, 2000COINs: Community of Interests
91GE's Destroy Your Business Approach Each business unitUse cross-functional teamBenchmark competitors'Business operationsProducts / ServicesThe economics of ordering online, sales force, and call centersDYB - Destruction Your Business: Present a hypothetical internet-based business plan that a competitor could use to erode your customer base.
92GYB: Grow Your Business Approach How the business unit should change their existing business model in response to the threats.Find fresh ways to reach new customers and better serve existing ones.Best practices:Focus: Your e-business application should focus on how your customers can grow their business, streamline processes or reduce costs.Speed matters: Mare sure what you are offering customers via the web, whether they are B2C or B2B, is faster, cheaper and better than any other delivery mechanism.Value: New internet services should enhance value for existing customers rather than simply reaching new ones.
93E-Business Creation Process Customer feedbackBenchmark dataCompetitive analysisMarket forcesUsage statisticsCustomer needsCurrent capabilitiesPersonalizationROIProfilingSegmentationExperience modelingExpanded business opportunitiesSystems and networksWeb architectureBusiness infrastructureTechnology componentsWeb technology strategyE-VisionBusinessDriversTechnologyDriversE-BusinessStrategyRapidImplementationSource: Digital Transformation, 2000
94Internet Industry Internet Economy Consulting Sports Malls EntertainmentNewsfeedPublicationsCommerce InstrumentsPortalsCommerce ServersContentandActivityElectronicCommerceInfrastructureClient/ServerSoftwareConsultingInternet EconomySystem Integrationand DesignBrowsersWeb ServerApplication ServersSecurityToolsBackbone RouterAccess EquipmentServer ComputersInternetEquipmentISPNetworkServicesInternet ServiceConsumer ServicesCarriers
95EC Business ModelsB2C Virtual stores: physical and digital goods and servicesInfomediaries: Seller-sideInformediaries: Buyer-sideInfomediaries: B2B marketspace
96Types of Virtual Stores Hard goods:FoodClothesComputer hardware and ElectronicsPackaged softwareSoft goods (Bits delivered on-line)InformationDatabasePublishingResearchSoftwareComputer gamesJava appletsApplication softwareServicesSelling time:Computer game playConsultingLegal and medical servicesSelling information (subscriptions)Dating servicesLegal and medical adviceReservations and ticketsAirline ticketsEvent ticketsHotel and restaurant
97Is EC Appropriate for You? Industries who set upvirtual storefronts
98What Consumers Are Buying Online Computer-related products 49%Books 35%Consumer electronics 34%Travel Reservations 28%Cars, boats 19%Clothing and apparel 18%Recorded music, CDs 18%Larger household goods (furniture, major appliances) 15%Filmed entertainment, videos 13%Gifts delivered by mail (flowers, candy) 12%Publication subscriptions 8%Investment or financial services 8%Food and drink 8%Artwork, poster, etc 4%Other 13%Source: Ernst & Young Internet Shopping Study 1998
99Why? The most affected industries: The least affected industries Books Stock tradingPCsAutomobilesTravelThe least affected industriesFoodConsumer durable goodsClothingLocal servicesBanking and insuranceEnterprise.com, 1998
100Three Business Models Payment direction: Buy-sideSell-sideMarketplace: Business is being transacted with both suppliers and customers.Trading parties: Most analysts predict the B2B model will have a more rapid adoption rate, but that the volume of transactions in the B2C model will, in the long run, greatly surpass that of B2B.Business to BusinessBusiness to ConsumerType of product or service that is being provided.Physical goods and servicesDigital goods (contents)Digital servicesBusiness model classification are generally broken down into three distinct segments. The first, referred to as "buy-side" and "sell-side", refers to payment direction - commerce being conducted with a company's suppliers or with its customers. And, in some cases, business is being transacted with both suppliers and customers.The second distinction is trade being conducted on a "Business to Business" or "Business to Consumer" environment. Most analysts predict the B2B model will have a more rapid adoption rate, but that the volume of transactions in the B2C model will, in the long run, greatly surpass that of B2B.The third business modeling segment relates to the type of product or service that is being provided. An example being "content delivery" where information, such as the online version of The Wall Street Journal, is sold and distributed directly over the Internet. This publication categorizes six different types of business models within this segment, but recognizes that different levels of hybridization and combinations make every business unique.
101Sell-Side E-Commerce Model Buyer AEDISellingMerchantBuyer BHTML & FormsHTML & XMLOnlineSellingOBIBuyer C
102Sell-Side StorefrontPrimary model used in current business-to-consumer scenariosSingle 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 storesExpensive for buyer; does not meet the needs of corporate procurement organizations.
103Buy-Side E-Commerce Model Seller AEDIBuyerSeller BHTML & FormsHTML & XMLOnlineProcurementOBISeller C
104Buy-Side eProcurement Buy-side applications generally consisting of a browser-based self-service front end to ERP and legacy purchasing systemsCorporate 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” purchasingPurchases 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 errorsModel 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.
106Business-to-Business vs. Business-to-Consumer No vendor loyallyNo switching costsTime-insensitiveShort-termCasualMany vendorsProducts differentiated on price, imageRelationship-basedVery high switching costsExtremely time-sensitiveLong-termMission-criticalFew partnersPartners differentiated on reliability, flexibility
107B2B MarketplaceLatest evolution of B2B eCommerce, enabling a many-to-many relationship between buyers and suppliersBuyers and suppliers leverage economies of scale in their trading relationships and access a more “liquid” marketplaceSellers find buyers for their goods, buyers find suppliers with goods to sellMany-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:
108Direct-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 2000June 20, 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-CB-to-BD-to-C
109Channel ConflictsChannel 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.The company's internal e-commerce team had already recommended direct Web sales as a way to better manage its supply chain and interact more directly with customers… But when the team presented its proposals to the company's CEO, his response was terse: "We've done business with our distributors for 30 years, and I certainly don't want to sell around them. I don't even want to discuss it."ComputerWorld.com Quick Study
110Case in PointFor 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.
111Channel Conflict: How About the Distributors The concept of complete disintermediation - the elimination of the middleman - remains a theory. New intermediaries are emerging.Cisco System has 2 billion dollars annual sales on the Web.70% of Cisco online business comes from VARs and distributors.Distributors have to do lot of value-add and customer support to survive.Fruit of Loom Inc. has 31 of its 55 distributors up on its extranet called Activewear Online.
112Retailers and Manufacturers Co-exist on the Web US retail sales revenues 1998:Brick-and-mortar stores 93%Catalog sales: 6%E-commerce 1%Cases:Levi Strauss sells jeans at but won't allow retailers to sell them online.Estee Lauder sells Clinique cosmetics at but doesn't offer retail promotion.Waterford sells a limited selection at like chandeliers and corporate gifts.Strategies:Manufacturers want to maintain channels while stay in direct touch with their customers.Provide online dealer locators.Share customers information back and forth.
113Extended E-conomy Business Models E-buisness storefrontInformediarySeller brokerBuyer brokerTransaction broker / ExchangeCOINsPortalsTrust intermediaryE-business enablerInfrastructure providers / Communities of commerceSource: Net Ready, 2000
114Any-to-Any Technologies Connect Everything to Everyone BanksConsumersHigh ValueSolutionsBrokeragePCsWeb TVPDASmartcardsSpecialty DevicesOtherInsuranceBusinessesRetailTransactionsandPaymentsDistributorsInstitutionsTransportPhysicalInfrastructureOther
115Clicks-and-Mortar Brick-and-Click 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-ClickYourSherpa.com
116Vulnerability Grid Risk/Opportunity Exposure Velocity: How critical is the need for speed in the delivery of the product or service?Attitudinal Readiness: How ready are customers to accept new ways?Fragmentation: How fragmented is the market in which you operate?Commodity: How commodity-like is the product or service?Asymmetries of Information: What is the balance of power in the buyer-seller equation?Customizability: How customizable is the product or service?Digitizability: How digitizable is the product or service?Efficiency: how efficient is the relationship between buyer and seller?Your Risk/OpportunityLow Medium HighRisk/Opportunity ExposureSource: Net Ready, 2000
117Move to Consumer-Centric View CustomerFirewallConventional ViewTargetConsumersSupplyBaseMyCompanyDistributionChannelSupply-chainmanagementCRMSCMERPConsumer-Centric ViewC2B2B: Customer-to-Business-to-BusinessSupplier networkChannelConsumerCommunitiesVirtualEnterpriseAdapted from: Customer Centricity, InformationWeek, April 10, 2000
118Creating Sustainable Value in EC Develop a brand based on consumer experiencesThe brand emerges as the two-way communication on the net and off the net.Develop superior physical distributionPhysical distribution is a choke point in ECLeverage customer informationUse personal information to more convenience shopping and customized servicesPrivacy issueAsk customer explicitly for such dataRequire a more subtle approachUse collective dataUse it to adjust pricing, product offering, and target market
119Price Pressure Shrink Retail Margins Increasing apparent supplyIncreasingly price-sensitive online shoppersAggressive pricing for online playsComparison shopping enginesAverage retail net marginEconomies of scaleNew services and loyalty programsAuctionsManaging current demandSource: Now or Never, 2000Time
120Business Models Based on the Value Chain in the Market Place Raw material producerExchangeIndependent market operatorsConsortiaManufacturerDistributorC2BNewMiddlemanRetailerB2CC2CExamples:B2B: Vericalnet.comB2C: Amazon.comC2B: Priceline.comC2C: eBay.comConsumerService Providers:LogisticsFinancialB2C
121Business Models from a Strategic Viewpoint "In the new economy, the unit of analysis for innovation is not a product or a technology-it's a business concept. ….To be an industry revolutionary, you must develop an instinctive capacity to think about business models in their entirety."Hamel's business concept that comprises four major components and several subcomponents:Core strategiesStrategic resourcesCustomer interfacesValue networksSource: Leading the Revolution by Gary Hamel
122Business Concepts (I)Core Strategy: It is the essence of how the firm chooses to compete.Business Mission: This captures the overall 'objective' of the strategy-what 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.Strategic Resources: These are unique firm-specific resources.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)
123Business Concepts (II) Customer InterfaceFulfillment 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.Information and Insight: This refers to all the knowledge that is collected from and utilized on behalf of customers.Relationship Dynamics: This refers to the nature of the 'interaction' between the producer and the customer.Pricing Structure: This refers to the price choices depending on the traditions of your industry.Value Network: It surrounds the firm, and which complements and amplifies the firm's own resources.SuppliersPartnersCoalitions
124Bridge ComponentsThese 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.
125Market Structure on the Internet Many smaller players with high rate of entryFew large and dominate companiesNumber of companiesTransitionSize of companySource: Now or Never, 2000
126Three Top Three Concerns RetailersConflict with investment in physical stores;Technology issues; andLack of distribution and fulfillment network.ManufacturersProducts not appropriate for online sales;Potential risk to channel relationships; andConsumers won’t buy onlineMany manufacturers simply weren't capable of shipping a single box of Tide or a bottle of Advil. They had no experience in dealing directly with consumers.
127Dynamic Trade: Perfect Market Customer service is more important than product sellingFederal Express: CertaintyReal-time demand drives productionDell: Build-To-OrderPricing matches market conditionsName your price (reversed auction): PriceLine.comAuction: EbayLeveraging technology to satisfy current customer demand and with customized response.
128Traditional vs. Dynamic Trade Speed from engagement to transactionWeeks vs. MinutesProduct distributionSeller-selected vs. Buyer-selectedPricingProduct price list vs. Market-determined priceProductionPre-sale vs. Post-saleCustomer relationshipsStandard vs. Targeted and CustomizedStrategic assetLocation vs. Visibility and Customer Database
129Dynamic Trade Self-Test Rate each of the following criteria in your market. (3=high, 2=medium, 1=low)Commodity marketPerishability of inventoryCapital intensityConfigurability of productsCustomers' perceived investment levelThreat from new kinds of competitionChannel volatilityTOTAL: _____________
130Business Channel: Multi-Channel Presence Brick-and-mortarFace-to-FaceMail orderMailPrinted catalogPhone orderTelexPhoneFaxElectronic commerceEDIWebClick and MortarSellerBuyerPure PlayMulti-channel plays will have extraordinary power if companies elegantly blend and synchronize those channels.
131"Within five years, ALL companies will be Internet companies." -- Andy Grove,Intel Chairman
132Web Experiences for Consumers A many-to-many rather a one-to-many experienceFresh contentAccess to detail informationCommunities unbounded by space and timeThe multimedia appeal of TVA redefinition of privacy and identityHyper-impulsivity: The web permits a closer conjunction of desire, transaction, and payment than any other environment.
133Give More Information/ All 3 Steps in One MediumGet AttentionGive More Information/Answer QuestionsInformationThe SaleTV AdsMagazinesBrochuresSales PeoplePrint/editorialStoreTelephoneCatalogueTransact/ServiceBranding
134New Competition From Surprising Places Most Visited Retailers:1. Bluemountainarts.com2. Amazon.com3. AOL.com4. Ebay.com5. Etoys.com6. Barnesandnoble.com7. CNet.com (software)8. Egghead.com9. CDNow.com10. Musicblvd.com11. ColumbiaHouse.com12. Classifieds2000.com13. Beyond.com14. Coolsavings.com15. Valupage.comNot in Top 25:Towerrecords.comBorders.comToysrus.comTarget.comGap.comMacys.comSears.comWalmart.com“BigCompany.com”YourCompany.com??
135What is your new industry structure? Powerful new intermediariestravelocity.com; travel.yahoo.com; expedia.msn.com; golfclubexchange.com, eBay.com, priceline.comIncreasing commoditizationYour competitors are just a mouse click awayCamparison shopping: singleshop.com, mySimon.comNew competition from surprising placesrealguide.real.com; headline.yahoo.com;Be aware of new industry forcesamazon.com; yahoo.com; msn.com; etrade.com; priceline.com; etoy.com; aol.com
136What are the new economics? Different revenue modelswsj.com; match.com; yahoo.com; monster.comDifferent cost modelsbuy.com; dell.comDifferent use of assetsAmazon.com
137What's the best E-business model for your company? An online subsidiaryBarnesandnorbles.com by Barnes and Nobles to compete with amazon.comToysrus.com by Toys "R" Us Inc. to compete with eToys Inc.MagazineOutlet.com by NewSub Services Inc.Partnering with an online companyPetSmart Inc., invested $16 million in PetJungle.com to create PetSmart.coma virtual company and a big-box retailer teaming up to attack a categoryConverting to an online-only companyEgghead.com, Homebid.comIntegrating E-business throughout the companyPrudential California Realty
138EC: Case Studies B2B: verticalnet.com Auction: eBay Subscription web sites: monster.come-tailing: 1800flowers.comFinancial investment sites: E*TradeOther interesting web sites
140Company Background and Capabilities Own and operate 55 industry-specific Web sites designed as online B2B communities, known as vertical trade communities.These vertical trade communities provide users with comprehensive sources ofInformation (Content): from newswire and editorial servicesInteraction (Communities): , chat rooms, bulletin boarde-commerce: RFPs, RFQsAdditionally, VerticalNet provides auctions, catalogs, bookstores, career services and other e-commerce capabilities horizontally across its communities with technologies from acquired and organic sites like Industry Deals.com, IT CareerHub.com, LabX.com, and Professional Store.com.Create values:Individual advertising ($6,000 - $25,000)Hosting sitesBuild and design sitesSponsor forums with expert guestsNegotiate a percentage of transaction at the online marketplace
145Jay Walker, 43, founder and Vice Chairman of priceline Jay Walker, 43, founder and Vice Chairman of priceline.com, has created a model for buying and selling that's so original, it's been patented. Walker calls his model "buyer-driven commerce," and he's racing to build a big company around it. "Fast Company"It's not a traditional supply-and-demand market anymore. Priceline flips the power relationship on its head where the customer is telling you what he will pay."Interactive Week
146Business ModelsPriceline.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.
147Problems?!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.''
148E-Loan at eloan.comIPO: 2 Billion Dollars Market Capitalization
151Matching Games: The Marketplace Online Dating Service$9,000 subscription fee per year for recruiting firmsFree for job seekers
152Internet Shopping Network: http://www.internet.net Operating online since April 1994.Focus on computer products which fit the demographics pretty well.Customer look for a narrow focus in an online store and expect expertise in that area.
153Acquired by Cyberian Outpost Kent, CT, & Sunnyvale, CA Nov. 2, Cyberian Outpost, Inc. (NASDAQ: COOL), a leading Internet-only retailer of computer hardware, software, and peripherals for consumers worldwide, today announced it has acquired the Internet Shopping Network (ISN) Computer Superstore's customer base. Cyberian Outpost (http://www.outpost.com/) will be the new online shopping destination for the Computer Superstore's more than 160,000 customers. Prior to the acquisition, Cyberian Outpost had over 161,000 customers.In addition to selling the Computer Superstore's customer list, ISN has agreed to maintain, a direct link from the ISN Computer Superstore's homepage that will lead shoppers to the Cyberian Outpost homepage (http://www.outpost.com/) for the next four months. Further, all existing URL's relating to the ISN Computer Superstore will re-direct users to Cyberian Outpost's homepage, extending Cyberian Outpost's market reach, these re-directed links will remain in place for one-year to cover residual bookmarks or links pointing to the ISN Computer Superstore.
156On Monday (Dec. 19, 2000), eToys watched its market value, which once topped $1.9 billion, fall to $37.2 million. It watched its customer traffic, once growing at a healthy clip, go flat compared to last year. And it watched its shares plunge 72 percent to close at 28 cents a share, miles from its 52-week high of $40.25, as a number of analysts reaffirmed their positions on the stock.
163www.slate.com Check out http://interactive.wsj.com/
164Hot Sauce: http://www.hothothot.com Specialty virtual store
1651-800-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.
170Landsend.com Set up shop at AOL in 1992 Launch a web site in 1995 1% of sales in 19974.5% of sales in 1998Printing and mailing it 250 million catalogs each year counts for 43% of its operating cost.10% of all Internet apparel sales in 1998
171Interactive Application on the Net Go toChoose Oxford Express LinkCheck out
172My Virtual ModelOnline 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.Clothing establishments both off- and online will be targeted, with a plan to place the scanning units in real-world stores. Brooks Brothers already has an Image Twin scanning booth on its New York City premises but has yet to use it, according to Morton. A Lands' End spokesperson said that the company intends to bring the scanners to its stores, but did not give a timetable for a full-scale rollout.Although My Virtual Model will promote its service as a way to "experiment with fashion without the intimidation of store dressing rooms (and harsh fluorescent lights)," the scanning process for the improved version seems a similarly daunting experience. Awaiting one's turn at the scanner, clad in tight-fitting athletic gear one would never wear under street clothes, the lighting doesn't manage to be flattering. Strictly speaking, if fluorescent light is a problem, the idea of having every bump and bulge documented would also be a problem. At least it's only once, for 12 seconds.Or three times: This reporter had to be scanned repeatedly to get a clear image and was in the scanning booth for more than half an hour. After adding a few more details in questionnaire form, a consumer's mirror image is printed out.
173Online Stock Brokerage Firm: E*Trade Received a $400 million investment from Softbank.
177E*Trade Investment Tools E*TRADE has created a web-based trading system that is streamlined, efficient, and economical. As an account holder, you get free real-time market information, news and analysis and pay among the lowest commission rates and lowest margin rates in the industry.One-Click Access to the Tools You Need: E*TRADE customers, get comprehensive online trading capabilities and a full set of investment and research tools such as free news, charts, in-depth company fundamentals, and online portfolio management.Personal Market PageE*TRADE offers a low and simple commission schedule. You pay only $14.95 for listed market orders and $19.95 for Nasdaq orders. For listed orders over 5,000 shares, add 1 cent per share to the entire order. For options, you pay just $20 plus $1.75 per contract, with a $29 minimum.
178E*Trade Commission: A Comparison Online competitor
179UpdatesE*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).A day trader killed 9 people at Atlanta.July 28, 1999.
180E*TRADE Acquires Telebanc for $1.8 Billion 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 $1.8 billion based on E*TRADE's closing price on Friday, May 28. Once the merger is finalized, Telebanc shareholders will own approximately 13 percent of E*TRADE's fully diluted common stock. The transaction will be accounted for as a pooling of interests and is slated to close sometime this fall upon regulatory and shareholder approval.The merger creates an Internet-based, FDIC-insured cash management account which the companies predict will change the future of personal financial services. Aimed at millions of Internet consumers, the online financial management resources of E*TRADE combined with online banking capabilities is expected to eliminate the need for multiple financial relationships.The merger also will offer online consumers for the first time, access to full-featured, FDIC-insured Internet cash management accounts, including ATM access through the national Cirrus network, online bill payment and investing services, enabling them to consolidate brokerage and banking accounts.By offering a central account, customers will be able to conduct a full range of transactions online, including buying mutual funds, CDs and fixed income securities, trading equities and paying bills. E*TRADE said through the integration of the companies services, a cost-effective, scalable business model will be achieved, while boosting E*TRADE's customer acquisitions and aggressively expanding its existing one million-plus customer account base.June 01, 1999
182Internet Stock Is Also Driving The Change Market Capitalization ($ Billions)As of 4/16/99Schwab: $46.6 BMerrill: $31.0 B
183Merrill Lynch & CO.Some 30 percent of chief executives and senior managers say the Internet is forcing them to revamp their strategies, according to a recent study by Booz, Allen & Hamilton and the Economist Intelligence Unit.Take Merrill Lynch & Co., the biggest U.S. broker, which after long resisting trading over the Internet, said on Tuesday it planned to roll out full-scale online trading."The undeniable fact that there is a segment of the marketplace that wants to access the market through technology and through online investing was indisputable," Merrill Chairman David Komansky said.
184By 2003, Forrester estimates that 9 By 2003, Forrester estimates that 9.7 million US households will manage more than $3 trillion in 20.4 million on-line accounts. Deep discount firms will see their growth rates plateau. Midtier firms will prosper, capturing more households and assets than their competitors will. Full-service companies will start slow but will enjoy the greatest asset growth.