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Chapter 3 Enhanced Version Business Models Exhibits and Tables October 18, 2000. Exhibit 3-1: Components of a Business Model. Value Cluster. Marketspace Offering. Resource System. Financial Model. Supporting Slide 3-A: Point-Counterpoint: Single Vs. Cluster of Benefits.

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Chapter 3 enhanced version business models exhibits and tables october 18 2000 l.jpg

Chapter 3 Enhanced Version Business ModelsExhibits and TablesOctober 18, 2000


Exhibit 3 1 components of a business model l.jpg
Exhibit 3-1: Components of a Business Model

Value Cluster

Marketspace Offering

Resource System

Financial Model


Supporting slide 3 a point counterpoint single vs cluster of benefits l.jpg
Supporting Slide 3-A:Point-Counterpoint: Single Vs. Cluster of Benefits


Exhibit 3 2 shattering myth that consumers care only about prices on line l.jpg
Exhibit 3-2: Shattering Myth That Consumers Care Only About Prices On-line

PERCENTAGE OF CUSTOMERS WHO CARE ABOUT ATTRIBUTE

ATTRIBUTE

Source: JP Morgan Report: etailing and the five Cs


Table 3 1 consumer decision process flower example l.jpg
Table 3-1: Consumer Decision Process — Flower Example Prices On-line

Problem - Recognition

Information Search

PRE-PURCHASE

Evaluation of Alternatives

Purchase Decision

PURCHASE

Satisfaction

POST-PURCHASE

Loyalty

Disposal


Supporting slide 3 b consumer decision process flower example l.jpg
Supporting Slide 3-B: Prices On-lineConsumer Decision Process — Flower Example

Problem - Recognition

Information Search

Pre-Purchase

Evaluation of Alternatives

Purchase Decision

Purchase

Satisfaction

Post-Purchase

Loyalty

Disposal

Flowers

  • Need recognition, potentially triggered by a holiday, anniversary or everyday events

  • Search for ideas and offerings, including:

    • Available on-line and off-line stores

    • Gift ideas and recommendations

    • Advice on selection style and match

  • Evaluation of alternatives along a number of dimensions, such as price, appeal, availability, etc.

  • Purchase decision

  • Message selection (medium and content)

  • Post-sales support

    • Order tracking

    • Customer service

  • Education on flowers and decoration

  • Post sales perks


Exhibit 3 3 egg diagram for 1 800 flowers com l.jpg
Exhibit 3-3: Egg Diagram for 1-800-flowers.com Prices On-line

  • Gift reminder service

  • Holiday specials

  • Everyday celebrations suggestions

  • Special occasion suggestions

Ideas and Information

  • “Care and handling”

  • “Do it yourself”

  • Special events and educational workshops held at stores

  • Floral ideas

  • Garden ideas

  • Home ideas

  • Gift ideas

  • Gourmet ideas

  • Store locator

  • Recommendations by budget

  • Best sellers

Flower / Gift Decision Process

  • Need Recognition

Product Offering

Gift Recommendations

  • Education on Flowers and Decoration

  • Search For Ideas and Offerings

  • Gift guru

  • Favorite gifts

  • Gift frequency

  • Gift impossible

  • Gift baskets

  • Corporate gift services

Post-Sales Support

  • Order receipt email

  • eQ&A online customer service

  • FAQ

  • Customer service inquiry form

  • Post Sales Support and Perks

  • Evaluation of Alternatives

  • Product price

  • Product picture

  • Product description

  • Delivery information

  • Delivery availability

Perks

  • Miles earned with flower purchases

  • Free gifts

  • Discounts at AOL & BN with flower purchases

  • Member specials

  • Message Selection

  • Purchase Decision

  • Shopping basket

  • E commerce transaction

  • Special shopping features

    • Delivery outside U.S.

    • 1-800-lasfloras.com

  • Gizmo fully-animated greeting cards

  • Physical cards in gifts


Exhibit 3 4 1 800 flowers com resource system l.jpg
Exhibit 3-4: 1-800-flowers.com Resource System Prices On-line

BloomNet Network

Third Party Contractors

Address Book

Strong Distribution Network

Gift

Recommend-

ations

Fulfillment Center

Stores

Online Gift Center

Gift Reminder

Broad Assortment of Gifts

High Quality of Flowers

Rich Content

Personalization Capabilities

Popular Web Site

Garden Works

Integrated Partner Offers

Telephone

3,000 Affiliates

Plow & Hearth

On-line

Customer Service

Widespread, Easy Access

Great Foods

Multiple Contact Points

Franchise Stores

Catalog

Technology

Strong Brand Name

Wide Reach to Customers

Customer Service Centers

= Core Benefits

SNAP

Starmedia

= Activities & assets

Integrated on-line off-line systems

AOL

MSN

= Capabilities


Supporting slide 3 c benefits and challenges of hybridization l.jpg
Supporting Slide 3-C: Benefits and Challenges of Hybridization

Benefits

Challenges

  • Persistent connection with customers

  • New value for customers

  • Acces to new customers

  • Scalability

  • Cannibalization

  • Channel conflict

  • Customer confusion

  • Investor confusion


Exhibit 3 5 on line off line egg diagram for 1 800 flowers com l.jpg
Exhibit 3-5 : On-line/Off-line Egg Diagram for 1-800-flowers.com

  • Prompts on toll free number recording

  • Suggestions from CSRs* in stores and via phone

  • Special events and educational workshops held at stores

  • Prompts on toll free number recording

  • Suggestions from CSRs* in stores and via phone

  • Brochure

  • Gift reminder service

  • Holiday specials

  • Everyday celebrations suggestions

  • Special occasion suggestions

Ideas and Information

Off-line Product Offering

  • Floral ideas

  • Garden ideas

  • Home ideas

  • Gift ideas

  • Gourmet ideas

  • Store locator

  • Recommendations by budget

  • Best sellers

  • “Care and handling”

  • “Do it yourself”

Flower / Gift Decision Process

  • Need Recognition

On-line

Product Offering

Gift Recommendations

  • Education on Flowers and Decoration

  • Search For Ideas and Offerings

  • Gift guru

  • Favorite gifts

  • Gift frequency

  • Gift impossible

  • Gift baskets

  • Corporate gift services

  • Suggestions from CSRs in stores via phone

  • Brochure

Post-Sales Support

  • In-store customer service

  • Customer servifce on toll-free number

  • Order receipt email

  • eQ&A online customer service

  • FAQ

  • Customer service inquiry form

  • Post Sales Support and Perks

  • Evaluation of Alternatives

  • Product price

  • Product picture

  • Product description

  • Delivery information

  • Delivery availability

  • Information from CSRs in store and via phone

  • Brochure

Perks

  • In-store specials

  • Specials offered via phone

  • Miles earned with flower purchases

  • Free gifts

  • Discounts at AOL & BN with flower purchases

  • Member specials

  • Message Selection

  • Purchase Decision

  • Shopping basket

  • E commerce transaction

  • Special shopping features

    • Delivery outside U.S.

    • 1-800-lasfloras.com

  • Gizmo fully-animated greeting cards

  • Physical cards in gifts

  • Select card in-store

  • Select card via phone

  • Purchase in-store

  • Purchase via phone

*CSR = Customer service representative


Supporting slide 3 d on line and off line integration for the 1 800 flowers resource system l.jpg
Supporting Slide 3-D: 1-800-flowers.comOn-line and Off-line Integration for the 1-800-FLOWERS Resource System

BloomNet Network

Third Party Contractors

Address Book

Strong Distribution Network

Gift

Recommend-

ations

Fulfillment Center

Stores

Online Gift Center

Gift Reminder

Broad Assortment of Gifts

High Quality of Flowers

Rich Content

Personalization Capabilities

Popular Web Site

Garden Works

Integrated Partner Offers

Telephone

3,000 Affiliates

Plow & Hearth

On-line

Customer Service

Widespread, Easy Access

Great Foods

Multiple Contact Points

Franchise Stores

Integrated on-line off-line systems

Catalog

Technology

Strong Brand Name

Wide Reach to Customers

Customer Service Centers

= On-line Activities & Assets

SNAP

Starmedia

= Off-line Activities & Assets

Integrated on-line off-line systems

AOL

MSN


Supporting slide 3 e 1 800 flowers partnerships l.jpg
Supporting Slide 3-E: 1-800-FLOWERS Partnerships 1-800-flowers.com

  • American Airlines® Advantage®, Delta Airlines SkyMiles®, United Airlines Mileage Plus

    • Earn frequent flyer miles with 1-800-FLOWERS.com purchases

  • MCI Worldcom

    • Receive 1-800-FLOWERS.com gift certificates with long distance sign-up

    • Receive 10% off every 1-800-FLOWERS.com purchase with MCI WorldCom membership

  • America Online

    • First agreement signed in 1994

    • Exclusive marketer of fresh-cut flowers across key AOL brands until 2003

    • One-year exclusive agreement to market gardening products commencing Nov. 1999

  • Microsoft Networks

    • Premier floral partner and anchor in the MSN Home and Garden Department

    • Products, advertising and links featured on MSN Shopping Channel

  • Snap.com

    • One of the 45 premier merchants in Snap shopping service (on-line e-superstore)

    • Anchor tenant in Snap.Com Flower Shop

    • To be spotlighted in select Snap.com on-air promotions, scheduled to run on the NBC Television Network during the Valentine’s Day and Mother’s Day periods

Source: 1-800-FLOWERS.com website, WR Hambrecht & Co., TheStandard.com. Hoover’s Online


Supporting slide 3 e 1 800 flowers partnerships cont l.jpg
Supporting Slide 3-E : 1-800-FLOWERS Partnerships (Cont.) 1-800-flowers.com

  • [email protected]

    • Markets flowers and other gifts through Excite.com and webcrawler.com web sites

    • Products, advertisments and links featured in the Excite Shopping Channel

    • Entered second year of marketing relationship in October 1999

  • Yahoo! Inc.

    • Will run banner advertisements throughout the Yahoo! Network, with additional presence in shopping area

  • StarMedia Network

    • Developing Spanish and Portuguese language versions of 1-800-FLOWERS.com web site

  • People PC

    • Signed one year agreement to become key floral and gift-provider for PeoplePC commencing October 1999

  • Zapa.com

    • Offers selection of online greeting cards on 1-800-FLOWERS.com web site

    • Greeting cards never deleted by Zapa.com

    • Users will be able to personalize greetings with their own photos, clip-art or other multi-media creations

  • Sears, Roebuck and Company

    • Licensing relationship which enables Sears customers to use their store charge cards when shopping with 1-800-FLOWERS.com

Source: 1-800-FLOWERS.com website, WR Hambrecht & Co., TheStandard.com. Hoover’s Online


Supporting slide 3 f 1 800 flowers activity system l.jpg

Key 1-800-flowers.com

Supporting Slide 3-F:1-800-Flowers Activity System

On-line

Off-line

Both

Introduction of

New Product

Categories

Electronic

Greeting Cards

Gift

Recommendations

Gift Reminder

Program

Broad Product Line

Online Gift Center

Address Book

Nationwide

Presence

Florist

Participation

BloomNet Network

Partnership With Associated Product Lines

Company

Off-Line

Stores

Company

Franchise Stores

MSN

Multiple

Customer Contacts

Strategic Alliances

On-Line

BN

In-Store

AOL

Alliance With Distribution Carrier

Telephone

Affiliate Programs

Note:

Source:


Supporting slide 3 g 1 800 flowers value system l.jpg
Supporting Slide 3-G: 1-800-FLOWERS Value System 1-800-flowers.com

Address Book

Gift

Recommend-

ations

Online Gift Center

Logistics

Gift Reminder

Broad Assortment of Gifts

Fresh Flowers

Sourcing

Garden Works

Product Partnerships

Brand Name

Telephone

Plow & Hearth

Online

Reasonable Prices

Widespread, Easy Access

Great Foods

Multiple Contact Points

Stores

Affiliates

Logistics

Bloomnet Network

Media Partnerships

= Core Benefits

SNAP

Starmedia

= Actions

AOL

MSN

= Capabilities


Supporting slide 3 h 1 800 flowers value system l.jpg
Supporting Slide 3-H: 1-800-FLOWERS Value System 1-800-flowers.com

Address Book

Gift

Recommend-

ations

Online Gift Center

Logistics

Gift Reminder

Broad Assortment of Gifts

Fresh Flowers

Sourcing

Garden Works

Product Partnerships

Brand Name

Telephone

Plow & Hearth

Online

Reasonable Prices

Widespread, Easy Access

Great Foods

Multiple Contact Points

Stores

Affiliates

Logistics

Bloomnet Network

Media Partnerships

= Core Benefits

SNAP

Starmedia

= Activities & assets

AOL

MSN

= Capabilities


Supporting slide 3 i point counterpoint competencies vs resource systems l.jpg
Supporting Slide 3-I: 1-800-flowers.comPoint-Counterpoint: Competencies Vs. Resource Systems




Exhibit 3 6 revenue growth choices 1 800 flowers l.jpg
Exhibit 3-6: Revenue Growth Choices: 1-800-flowers Derived)

Gardenworks

  • Plans to branch into a wide variety of product categories

Greatfoods.com

Plow & Hearth

Home Decor

New

Plants

In-Store Seminars

Gourmet Treats

Greeting Cards

PRODUCTS

Existing

Corporate Gift

Services

Existing

New

Existing

New

OFF-LINE MARKETS

ON-LINE MARKETS


Supporting slide 3 j point counterpoint does profit matter build profit or build user base l.jpg
Supporting Slide 3-J: Derived)Point-Counterpoint: Does Profit Matter? Build Profit Or Build User Base?


Exhibit 3 7 sawhney and kaplan classification of b to b models l.jpg
Exhibit 3-7: Sawhney and Kaplan — Classification of B-to-B Models

Paper

Logistics Management

Chemicals

Media Buying

Plastics

Advertising

Steel

Energy Management

VERTICAL HUBS

FUNCTIONAL HUBS

Source: Adopted from Business 2.0, September 1999, p.88


Table 3 4 rjs model summary l.jpg
Table 3-4: RJS Model Summary Models

Single Brand

Multiple Brands

Forward-Integrated Producer

(Wal-Mart.com)

Supply-Side Aggregator

(Surplusdirect.com)

Supply-Side

Demand-Side Aggregator

(Accompany.com)

Backward Integrated User

(Dellonline.com) - B2B

Demand-Side

Hybrid Integrator

(Cisco.com)

Hybrid Aggregator

(Amazon.com)

SOURCES OF CONTENT ORIGINATION

FOCUS OF STRATEGY



Exhibit 3 8 schwab egg diagram l.jpg
Exhibit 3-8: Schwab Egg Diagram Approaches

  • Schwab Learning Center

  • Live Events

  • Principles of Investing

  • Understanding Market Cycles

  • “Did You Know” Q&A

Overall

  • General Goal Planner

  • Investor Profile

  • Sample Investment Plans

    Retirement

  • Retirement Planner

  • IRA Analyzer

Product Offering

Estate

  • Estate Tax and Probate Calculator

  • Alternatives Comparison

    College

  • College Planner

    Tax

  • Tax Strategies

  • IRS Withholding Calculator

On-Line Investment Process

  • Get educated about investing

  • Online chat with Customer Service Representatives

  • Customer Service via phone

  • Customer Service via email

  • Customer Service at Branch

  • My Watch List

  • Plan investments

  • Post Investment Support

Overall

  • Quotes and Charts

  • Analyst Center

    Stocks and Options

  • Stock Analyzer

    Bonds and Treasuries

  • Schwab BondSource Services

    CDs and Money Markets

  • SchwabOne

  • Perform Research

  • Margin Loans

  • Money Transfers

  • Automatic Investing

  • Options Service

  • After Hours Trading

  • Account Protection

  • Bill Payment

  • Perform Investment

  • Decide on Investment

Annuities

  • Schwab Select Annuity

    Life Insurance

  • Insurance Needs Calculator

  • Schwab Signature Services

  • Schwab AdvisorSource

  • Options Service

  • Global Investing Service


Exhibit 3 9 schwab resource system l.jpg
Exhibit 3-9: Schwab Resource System Approaches

Learning Center

Onesource

Invest in CSR Training

Align CSR

Compensation

with Quality

of Service

Center of Knowledge and Innovation

Customer Service

Innovative Products

Superior Service

Hire IT Staff

Investment in R&D

24x7 Access

Train IT Staff

Investment in IT

Cutting Edge Technology

System Reliability

Partnerships with Content Providers

Multiple Points of Access

Optimize Staff in Branches

Hoovers

Online

Lower Prices

Streamlined Operations

Charge For Value Added Services

Phone

S&P

Media General

Branch

Provide

Lower

Commission

for Frequent

Traders

Competitive Commission Rates

= Core Benefits

= Capabilities

= Resources


Exhibit 3 10 schwab resource system l.jpg
Exhibit 3-10: Schwab Resource System Approaches

Learning Center

Onesource

Hire IT Staff

Invest in CSR Training

Align CSR

Compensation

with Quality

of Service

Capable IT Staff

Center of Knowledge and Innovation

Well-Trained CSRs

Innovative Products

Superior Service

Investment in R&D

Train IT Staff

24x7 Access

Investment

in IT

Cutting Edge Technology

System Reliability

Partnerships with Content Providers

Multiple Points of Access

= Company needs to outsource or partner

Optimize Staff in Branches

Hoovers

Online

Lower Prices

Streamlined Operations

Charge For Value Added Services

= Company can perform in-house

Phone

S&P

Media General

Provide

Lower

Commission

for Frequent

Traders

Branch

Competitive Commission Rates


Slide28 l.jpg

Supporting Slide 3-K: ApproachesSchwab Activity System

Large

investment in R&D

Exceptional

team of engineers

Innovative products

Increase in trade volume

System able to handle large volume

In-house technology development

Low price

Downsized

branch staff

Technology Leadership

Investment in IT

Increase in non-trade revenue

24 x 7

Customer service

Large,

well trained

sales force

Superior service

High quality

Investment

Information

Hoovers Online

Multiple points of access

Comprehensive

information

Partnerships with content providers

S&P Comstock

On-line

Phone

Branch

Media General


Supporting slide 3 l schwab value proposition l.jpg
Supporting Slide 3-L: ApproachesSchwab Value Proposition

“Use technology to offer innovative products and superior service at lower prices to investors unwilling to pay for investment advice”



Exhibit 3 11 schwab revenue growth choices l.jpg
Exhibit 3-11: Schwab Revenue Growth Choices Approaches

Advanced Software Tools

After-hours trading

International Expansion

New

International Expansion

Learning Center

In-Branch Seminars

New Online Investment Bank

PRODUCTS

Existing

Existing

New

Existing

New

OFF-LINE MARKETS

ON-LINE MARKETS


Slide32 l.jpg
Supporting Slide 3-M: Point-Counterpoint: Who Would You Rather Be? A Dot-Com Or Brick-And-Mortar Business?


Slide33 l.jpg
Supporting Slide 3-N : Business Model Choices Must Be Consistent With Sources of Competitive Advantage

Business Model Options (Not Mutually Exclusive)

Forward-Integrated Producer

Content Production

eBusiness Interface

Content Utilization

Backward-Integrated User

Content Production

eBusiness Interface

Content Utilization

Content Production

Content Production

Supply Aggregator

eBusiness Interface

Content Production

Content Utilization

Content Production

Content Production

Content Production

Content Utilization

Content Utilization

Content Production

eBusiness Interface

Content Utilization

Demand Aggregator

Content Utilization

Content Utilization

Content Utilization


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