1. Bush Boake Allen Alibris Both companies on verge of e-something
Overview of Week 2
Bush Boake Allen
Alibris
Both companies on verge of e-something

2. Bush Boake Allen
Supplies flavors and fragrances to the world's leading consumer products companies
Used in foods, beverages, soaps and detergents, cosmetics, toiletries, personal care items and related products.
Aroma chemicals, natural extracts and essential oils serve as raw materials for a wide range of compounded flavors and fragrances.
Conducts operations on six continents
60 locations in 38 countries worldwide
1999 worldwide sales of $499 million.

3. Bush Boake Allen Business Environment
Need to produce desired flavors & fragrances quickly
Requires experienced flavorists to mix 500+ ingredients
High margins (40%) on accepted products
Intensive R&D to develop accepted product
Intense competition
9 companies hold ¾ share of $11 billion market

4. Bush Boake Allen Competitive pressures
Need to acknowledge regional differences
Understand and cater to local preferences
Need for regional expertise and knowledge
Requires regional R&D and Mfg centers for rapid response
Bargaining power of customer is increasing
Expecting rebates from “select” suppliers
Reduces margins

5. Bush Boake Allen Empowering Customer Design
Project Mercury
Automated flavor prototyping
Hold 500 ingredients
Customer interactive
Collect CRM data
Provide convenient customer access
Locate machines regionally
Install in largest customers

6. Bush Boake Allen Empowering Customer Design*
07/16/96
Bush Boake Allen Empowering Customer Design
Opportunities
Early mover advantage
Increased customer satisfaction
Faster and more flexible flavor delivery
Closer integration between product development and customers
Increased product acceptance
Increased ratio of developed to accepted flavors
Reduced reliance on flavorists
Risks
Reduce perceived value of BBA
Reduced margin
Just an expensive experiment? *

7. Bush Boake Allen Issues
Are there pitfalls in giving the customer a bigger role in the design and delivery of products and services?
Three proposed strategies for using the Spider
Internal use only
On-site with select clients only
Access for everyone online
Which one would your recommend?

8. Alibris Business Environment
Used Book Industry
Estimated 6500 used book dealers in North America
Estimated $2B / year – expected to grow to $7-8B
Used book dealers geographically dispersed but networked
Exploding growth of Internet (1998) provided opportunity for and trend toward eCommerce

9. Alibris Interloc Background
Started by Dick Weatherford – rare book dealer
Service to find used or rare books
Book listings only
Income model
Based on record storage charges & use time
Revenue $15K/mo
Used mostly by independent dealers for searches
Simple IT System
Originated as a pre-Web message board

10. Alibris Background
Brain child of Marty Manley and VC capitalizing on eCommerce trend
Partnered with Weatherford
Interloc becomes Alibris with $1M in venture funding
Manley is CEO

11. Alibris Business Model
Find and arrange the sale and delivery of rare, hard-to-find and out-of-print books
eCommerce powered by Internet
Dealers list books for free
Change from original Interloc business model
New IT system needed to support eCommerce
Conduct the search and sale functions
Ensure customer orders filled properly

12. Alibris IT System Challenge Approach
Handle millions of SKU’s of single unit
Search engine as fast as Amazon & Barnes & Noble
Approach
Implemented a standard Oracle IT system
Hired implementation consultants
Developed code in-house to customize system

13. Alibris IT System Implementation Crisis
Database migrated successfully but …
Oracle eCommerce IT System implementation failed
Debating whether to drop Oracle and start over with original small vendor (Thunderstone)
Loss of investment in time and effort to migrate database to Oracle system
Thunderstone system may not scale with company growth
Additional launch delay
More custom coding

14. Alibris Current Situation
Launch only weeks away
Funding running out
“White Knight” willing to provide $200K bridge
Many unattractive conditions attached
Considering offer to be a warehouse for another dealer

15. Current Articles on IT “Strategy and the Internet”
“The Real New Economy”
“Putting the Enterprise into the Enterprise System”
“Getting IT Right”
“Saving IT’s Soul: Human-Centered Information Management”
“Six IT Decisions Your IT People Shouldn’t Make”
“IT Doesn’t Matter”

16. “Article Analysis”
Present the main points being developed by the author
Explain these main points to the class using examples from article, experience, etc.
Identify any critical insights or lessons learned
Which ones can be applied to the Bush Boake Allen or Alibris cases

17. Synthesis The old analysis and synthesis routine
What are the common messages from these articles?