eCommerce Framework - Part 2
CPS 181s
Jan 14, 2003
Impact 1: Economics of Growth
 Increasing
 Far
“speed of adoption”
outdistances other technology growth
 Scale
and velocity reshapes economic growth
Impact 2: Blurring of Industry
Boundaries
 Old
categories breaking down
 “Last
mile” to consumer homes see a blur of
alternative telecommunications networks
Impact 3: Transformation of
Social Structure and Society
 Transforming
 learning
 group
communications
 scientific
 how
interchange
society functions
 Ubiquitous
Website addresses
Opportunities for Wealth
Creation
 Even
Today There are Market
Capitalization Opportunities for
New Economy Players
 consumer
products
 financial markets
 middleware enabling commerce
 services
 advertising
Exhibit 1-2 to Business eCommerce Projection
Business
Business-to-Business e-Commerce Projections
1200
$Billions
1000
800
600
400
200
0
1999
2003
US
World
Source: International Data Corporation.
6
Business to Business eCommerce Projections in Millions (1996-2000)
Business-To-Business E-commerce Projections, In Millions (1996-2000)
500
eStats
140,000
210
IDC
153,000
1996
2000
125
Yankee Group
134,000
600
Forrester
66,470
1
10
100
1,000
10,000
100,000
1,000,000
Internet Adoption Rates Versus
Other Mediums
120
Internet as Mass Medium — North American Adoption Curves
100
TV
80
Radio
North American
Users /
Households
(MM)
60
50 Million Users /
Households
Cable
Commercial
Internet
40
20
0
Years to Reach
50 MM Users
1998E
1994
Commercial
Internet: 5 years
1990
1982
1978
1974
Cable*: 10 years
1970
1966
1962
1958
TV: 13 years
1954
1950
1946
1942
1938
1934
1930
1926
1922
Radio: 38 years
1986
-20
* Launch of HBO in 1976 used to estimate the beginning of cable as an entertainment / advertising medium
8
Estimated Savings from eCommerce
eCommerce Decision-making
Process

Identify:
 Customer groups to serve
 Compelling set of benefits, differentiating “value proposition”
 Communication effectiveness
 Content
Look and feel
Level of community
Personalization
 Organization structure
Business services
Application services
 Potential partners
Capabilities
 Shareholders
 Metrics
eCommerce Strategy

Managerial task of eCommerce strategy
 Framing the market opportunity
 Business model
 Customer interface
 Market communications and branding
 Implementation
 Metrics
Where to Play On-Line and Off-Line
On-line
Yahoo!
BN.com
Fulfillment
Systems
Amazon.com
McDonalds
Customer
Interface
Off-line
Market Infrastructure
 Opportunities
 Network
and Constraints
Infrastructure
 Media Infrastructure
 Two Forms of Convergence
 Publics and Policies
Media Convergence to a Digital Platform
Network
Infrastructure
Media
Infrastructure
Telephone/DSL
Print
(Newspapers and Magazines)
Cable
Television
Broadcast Radio & TV
Digital
Convergence
Radio
Satellite
Music
Wireless
Motion Pictures
A Framework for eCommerce
Framing the
Business
Market
Model
Opportunity
Market
Customer
Communications Implementation
Interface
and Branding
Evaluation:
Metrics
and
Valuation
e-commerce
Strategy
Media Infrastructure
Network Infrastructure
Publics and Politics
Market
Infrastructure
Point Counterpoint: Who Will
Win? Online vs. Offline
On-line will win







Off-line companies can’t easily
cannibalize their own businesses
Off-line companies stock does not allow
them to adequately incentivise key new
economy talent
Off-line companies move too slowly
Key elements of business (e.g. business
design, strategy, value proposition) are
different in the New Economy
“innovator’s Dilemma”: Focusing on
current customer needs causes
companies to divert focus from new
technologies
Market will not tolerate blue chip
companies running loss-making
businesses
Off-line companies may face a channel
conflict
Off-line Will Win






Schwab has become a leading player in
the on-line brokerage industry
Companies with established market
leadership have key assets such as
relationships with customers, suppliers,
deep industry knowledge and experienced
management
Established companies have deep
pockets
Off-line companies have established and
trusted brands
Off-line companies can create spin-out
businesses with new culture, processes,
funding, etc.
There have been other technology
revolutions
–From 1894 to 1903, there were
20,000 telephone companies that
started in the U.S.
eCommerce Organizing Themes
 Technology:
Infrastructure
 Development
and Mastery of Digital Computing &
Communications Technology
 Business:
Basic Concepts
 New
Technologies Present Businesses and
Entrepreneurs with New Ways of Organizing
Production and Transacting Business
 Society:
 Global
Taming the Juggernaught
Nature of eCommerce Poses Public Policy
Issues of Equity, Equal Access, Content
Regulation, and Taxation
“The Rest...of the Story”
 Market
Opportunity Analysis
 Business
Models
 Customer
 Market
Interface
Communications & Branding
 Implementation
 Infrastructure
 Database
 Venture
& Datamining
Capital
 Intellectual
Property and Copyright
 Performance
 Media
& Technology
Metrics
Convergence, Ethical, Social, and Political Issues
Case Study Planetall.com





Some industry analysts view PlanetAll as a "virtual community"
company, and otheres see it as a virtual or physical community
enabler. What business is PlanetAll really in?
Should PlanetAll pursue a branded or an OEM strategy in
positioning its service with alliance partners and users? Can it do
both at the same time?
What factors drive user perceptions of PlanetAll's value? How
effective has PlanetAll been in aiding current and potential users
to realize that full value?
If positioning a firm's value proposition is a combination of
segmentation and differentiation, what is the right positioning for
PlanetAll in end-user markets? Propose a positioning statement
of 25 words or less that you believe would aid PlanetAll in
communicating key benefits and illustrating the value of its
service.
What could PlanetAll as a business be worth?