slide1
Download
Skip this Video
Download Presentation
CarPoint

Loading in 2 Seconds...

play fullscreen
1 / 25

Auto Industry and Online Brokers - PowerPoint PPT Presentation


  • 354 Views
  • Uploaded on

CarPoint. internet. business models . text and cases. Kristin Belanger. Auto Industry and Online Brokers. Overview. Introduction History Strategies Stakeholders Get Big Fast! 20-20 Hindsight. Introduction.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Auto Industry and Online Brokers' - Jims


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide1

CarPoint

internet

business models

text and cases

Kristin Belanger

overview
Overview
  • Introduction
  • History
  • Strategies
  • Stakeholders
  • Get Big Fast!
  • 20-20 Hindsight
introduction
Introduction
  • In 1999 more than 22,400 car dealers
  • Dealers were intermediaries
    • Earned 12.6% on ever sale
  • Online Referral Service
  • Built to order was expected
  • 2.7% of new car sales in 1999
    • Saved customer average of $379
introduction cont
Introduction cont.
  • Most visited online marketplace (www.itsa.org)
  • More than 6 million consumer visits per month
  • More than 10,000 models and more than 100,000 used vehicles
  • CarPoint generates more than $8 billion for each of it’s 5,000 affiliated dealers nation wide (per year)
problems
Problems
  • Online was less profitable
    • Online didn’t rely on mass media advertising
      • About $400 per new vehicle sold (average spending)
    • Compensation payments to dealers were lower than offline transactions
      • $150- 200 commission paid to dealers
      • About half that with online sales.
strategy s
Strategy’s
  • Began w/ Autobytel (with just info)
  • 1997 changed strategic plan
    • Went for the referral business
  • Contract with Reynolds and Reynolds
    • Info on 90% of all auto dealers
  • Reynolds & Reynolds inventory management
strategy s cont
Strategy’s Cont.
  • Features
    • Independent referral services
    • Kelly Blue Book, car reviews, crash test ratings
    • Personal Auto Page
    • Offered financing and insurance services
      • Referred services
    • Up to date listings on used cars
      • 360 degree views on some used cars
strategy s cont9
Strategy’s cont.
  • Business Model
    • Revenue from subscription fees
      • Paid from affiliated dealers (average of 1,000 per month)
    • Earned more revenue from referring users to other insurances and financing services
    • Advertising was about $250 per new vehicle sold
strategy s cont10
Strategy’s cont.
  • Marketing
    • Microsoft was a partner
    • MSN portal
    • Majority of the advertising was done on portals
    • And other automotive sites
    • With more than 30 million unique visitors per month in Oct. 1999
strategy cont
Strategy cont.
  • Dealer Relationships
    • Dealerpoint
    • Market more specifically with fine tune ads
    • Had over 300 reps for Carpoint Business
    • Consumers respond when their responses are < 24h.
direct competitors
Direct Competitors
  • Autobytel
    • 200,000 referrals a month for more than 3,000 registered dealers
    • Spend $15 million on advertising in 1999
    • Did not expect to get a profit in 2000
  • Autoweb/ Autovantage
    • Same strategy as CarPoint
    • Became more of a content provider
competitors cont
Competitors cont.
  • StoneAge.com
    • Focused on customer satisfaction
    • Could list person vehicles for $20
    • Relied on word of mouth
  • OpenAuto.com
    • Customer seeking popular vehicles
    • Willing to compromise total control over buying process
competing car buying models
Competing Car Buying Models
  • Newspaper
  • Traditional dealers
  • Manufactures
  • Cars.com, Yahoo!’s automobile section
    • Free auto classifieds
    • Troubleshooting and repair advice
  • Autotrader.com
    • Had automated inventory with it’s 5,000 dealerships
    • Moved towards a yellow pages model
priceline
Priceline
  • Model – Name your own price
  • Buyers paid $25
  • Dealers paid $75
  • If customer failed to respond to dealers offers
    • Priceline deducted $200 from credit cards
  • Priceline kept consumers names anonymous
  • Launched IPO in April 99
    • Market valuation of $12.9 billion
    • Teamed up with Ford
dealers
Dealers
  • Dealers could legally compete with referral services and did…
  • 1999 74% of Dealers had own website
  • Tried to cut out the middleman
manufacturers
Manufacturers
  • GM made effords to reduce third-party services
    • Such as Carpoint and Autobytel
    • Created e-GM which consolidated all of the e-commerce sites
  • Ford
    • Attempted to consolidate into networks
direct sales
Direct Sales
  • CarsDirect.com
    • Founded by Scott Painter and Bill Gross (backed by Michael Dell)
    • Had referal system however dealers were not stick to original quote
    • Buyed cars and then resell them
      • Expensive
      • Lost money on car sales
partnership w ford
Partnership w/ Ford
  • Ford would persue relationships with other Internet partners
  • Microsoft and Ford understanding
    • No perferential placement or other special treatment on the CarPoint site
  • Made changes in CarPoint’s business strategy
problems20
Problems?
  • Making this alliance can disrupt relationship with other manufacturers
  • Manufacturers could end up as an Internet company
  • The relationship with a Microsoft can become very complex
    • Could turn CarPoint to an IPO
partnership with ford
Partnership with Ford
  • CarPoint as an IPO
    • Could raise money to be a top of the line IPO
    • Could prevent the team from focusing when the competition is fierce
winner takes all
Winner takes All?
  • Network Effects
    • Moderate to Strong
      • Created community online
  • Scale of Economies
    • Moderate to Strong
      • Generate leads for dealers not so much worried about the transactions
  • Customer Retention
    • Moderate let customer know about availability of cars even when the customer isn’t shopping
    • Saves the customer money
winner takes all23
Winner takes All?
  • Value Customer Proposition
    • 1,441 / 200 = 7.205
update
Update!
  • Carpoint.com
    • No longer exists
    • Now part of MSN.com and has been renamed
    • Same look as old CarPoint.com
ad