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The Growth in Computer Use

The Growth in Computer Use. Region 1993 2000 2005 est. Asia-Pacific 25 116 257 European Union 44 135 250 United States 77 159 230 Latin America 3 18 44. * All data in millions. Present and Future Computer Growth. Cell Phone Users (1990 and 1999).

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The Growth in Computer Use

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  1. The Growth in Computer Use Region 1993 2000 2005 est. Asia-Pacific 25 116 257 European Union 44 135 250 United States 77 159 230 Latin America 3 18 44 * All data in millions

  2. Present and Future Computer Growth

  3. Cell Phone Users (1990 and 1999)

  4. The Potential of the Internet • Lower communication costs between people and companies, and within networks • Lower transaction costs between people and companies, and within networks • Lower information search costs • Lower costs of monitoring transactions and search processes

  5. The Internet and Various Industries Information-intensive industries: • Financial Services • Entertainment • Health Care • Education • Government Physical-intensive industries: • Retailing • Manufacturing • Travel • Power

  6. Startup Plans for B-School Grads University of Michigan University of California at Berkley Northwestern University

  7. Innovation and Value Value Creation: • The creation of value comes about when the company has the resources and capabilities to produce a product or service that is desired by market participants Value Capture: • Capturing value means that the price charged covers the full cost of production and a return on investment.

  8. Online Shopper Characteristics • 45% demand timely responses to questions and inquiries • 22% require informative content on the site • 17% highly value communication with a real person • 14% want the products displayed clearly and prominently • 14% desire 24-hour availability

  9. Versioning Versioning – Producing different options for an information-based product • Delay • User interface • Convenience • Image resolution • Speed of operation • Capabilities • Features and functions • Annoyance • Support

  10. Lock-in and Switching Costs

  11. Rules for Information-Based Businesses • Value pricing • Versioning • Intellectual property • Lock-in • Networks and positive feedback • Cooperation and capability

  12. E-Business Alliance Issues • Lessons for the Startup • The big company’s clout can help you in dealing with customers • Don’t be arrogant • Serve the customer’s needs, not your own egos • Pleasing the big customer is the make-or-break event in the life of the smaller firm • Find industry veterans to help guide the younger workers in the politics of big companies

  13. E-Business Alliance Issues • Lessons for the Big Company • The small company needs a very specific set of requirements • Supply the details • Invest in the startup and make sure that it has the resources needed to do your job • Socialize the employees of the smaller firm so that they know and respect you • Learn from the smaller company people how to do things differently and develop cutting edge skills

  14. Business Models for the E-Entrepreneur • B2C model • B2B model • B2B2C model • Clicks and Bricks model • Roll-up model • Advertising model • Pay for content model

  15. Online vs. Offline Sales Ratios

  16. E-Sales Options Alternatives to banner advertising: • E-mail marketing (est. $1.3 billion in 2001) • Skyscrapers (ads along sides of web pages) • Streaming audio and video • Effectiveness tracking • Mini-sites, pop-ups, and interstitials

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