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E-Business Growth Trends and Strategies for Success

Explore the evolution of computer use and the potential of the internet in various industries. Learn about value creation, online shopper characteristics, versioning strategies, and e-business alliance issues.

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E-Business Growth Trends and Strategies for Success

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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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