The Online Wine Industry

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The Online Wine Industry

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The Online Wine Industry Abhiroop Gandhi Sudhir Gopal Maximiliano Hernandez-Toso Raghu Kakumanu Eungsang Kim – PowerPoint PPT presentation

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Title: The Online Wine Industry


1
The Online Wine Industry
  • Abhiroop Gandhi
  • Sudhir Gopal
  • Maximiliano Hernandez-Toso
  • Raghu Kakumanu
  • Eungsang Kim

2
The Value Chain and EC
B2C
B2B
B2B
B2B
1st Tier Domestic Wineries and importers that
either produce or represent the producer
2nd Tier Wholesalers purchase wines from domestic
wineries and importers
3rd Tier Retailers, restaurants
Consumer
Vine
B2G
Regulation Authorities
E-commerce could be used at different points in
the in the industry value chain. We will focus in
B2C possibilities
3
Policy Issues and Barriers to Entry
  • Because alcohol is a state-regulated product
    rather than a federally regulated one, there are
    basically 50 different sets of laws. The only
    common law among the states is that wine or any
    alcohol must travel via the three-tier
    distribution system from producer to wholesaler
    to retailer before it reaches the consumer.
  • Impending legislation may help strengthen the
    market for internet wine sales.

4
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5
Conclusion
  • Legislation is the major barrier for the
    emergence of the Amazon.Com of wine

6
The Online Womens Clothing Industry
  • By Yucheng Hu,
  • Yimin Jiang,
  • Andrew Jones

7
Major Players in Online Womens Clothing
8
Womens Clothing
  • Who are the customers
  • Victorias Secret and Esprit primarily target
    middle and upper class women. They also try to
    attract male customers who are purchasing gifts
    for women.
  • Eddie Bauer, Gap, Lands End, and J.Crew sell
    both mens and womens clothing. So their
    customers come from both groups.
  • These online clothing stores hope to take
    advantage of the customers they do not reach with
    their mall presence.

9
Womens Clothing
  • Gaps Philosophy is A simple formula drives our
    brands We strive to deliver style, service and
    value to everyonekindergartners and
    grandparents, students and professionals,
    athletes and philosophers, big-city urbanites and
    small-town folks. (Source http//www.gapinc.com/
    about_us/about_us.htm)

10
The Online Flower Shopping
  • By Ying Zhou, Yue Wu, Shan Wei,
  • Zhao Gang Wo, Omotola Talabi

11
Online Flower Shopping
  • Customers Individuals
  • Individuals account for the bulk of purchases in
    the online flower industry with male customers
    significantly outnumbering females.
  • Survey results show that three-quarters (76
    percent) of men have ordered flowers for loved
    ones on Valentines Day while nearly a third (30
    percent) of women admitted giving flowers to the
    men in their lives. www.ftd.com

12
Online Flower Shopping
  • Customers Corporations
  • Corporate customers patronize online flower shops
    for marketing gifts. Corporations can take
    advantage of volume to receive discounts.
  • Our corporate clients have told us they want
    gifts that are exclusive and that both men and
    women will appreciate. They must express the high
    standards of their company and they expect their
    gifts to set the stage for continued successful
    business partnerships.
  • www.callyxandcorolla.com

13
The Online Jewelry Industry
  • By Emily Coyle
  • Kevin Daily
  • Jane Chien
  • Isnezawati Azali
  • Halit Akcaglayan
  • Nadia-Shazrin Asari

14
Market Share
  • In 1998, online jewelry spending was 207 million
  • In 2000, online jewelry sales are expected to be
    370 million
  • Global jewelry sales are estimated at 200
    billion a year
  • The retail jewelry market is highly fragmented

15
The Online Mortgage Industry
95-731 Business Strategy and Electronic Commerce
Homework 1 01-25-2000
  • Lisa Bembenick Naresh Bhaskar Joe Carlen Chad
    Carter Lbujomir Cvetkovic
  • Heinz, CMU Spring 2000

16
Average Mortgage Rates
  • National 1999 average mortgage rates

Source http//www.mortgage-net.com/trends/market
/
17
Some Sample Prices
  • 30-year fixed mortgage
  • Todays low rates 7.89 (MortgageAuction)
  • Rate 8.5/ Points 1/8 / APR (PNC)
  • Rate 8.0 / Points 0.99 / APR 8.152 (Hotloans)
  • 15-year fixed mortgage
  • Todays low rates 7.67 (Mortgage Auction)
  • Rate 8.0 / Points 3/8/ 8.44 (PNC)
  • Rate 7.625 / Points 0.99 / 7.862 APR (Hotloans)

Quotes as on 01-23-2000 on http//www.mortgageau
ction.com
18
The Online Travel Industry (Airline Tickets)
Adam Ratana Rohit Ravinath Thiti
Wang-Aryattawanich Rubina Zaidi
19
Industry News Projections
  • Travel eCommerce is expected to reach 20 billion
    by 2001 (source eMarketer)
  • 33.8 million travelers used the Internet for
    travel planning, up from 11.7 million in 1997
    (eMarketer)

20
Making money
  • Price and nonprice competition
  • What is the optimal product to offer and at what
    price?
  • Product is not just the good, but the entire
    package
  • Buy a book from Amazon or Shopping.com
  • The book is the same at the two sites
  • The product is not

21
Making money
  • Optimal product
  • As Wells Fargo shows, cant do everything
  • How do you decide what to do?
  • Differentiate product
  • Keep up with competitors
  • Lower costs

22
Making money
  • At what price
  • Depends on supply and demand sides of equation
  • Cost structure
  • How much customers value your product
  • Distribution of valuations
  • Industry structure number of firms, extent to
    which they are substitutes
  • Competitive, oligopoly, and monopoly models

23
Making money
  • Experience goods
  • Anything you need to try to determine how
    valuable it is to you
  • Offer promotions, free trials, etc. to get people
    to try
  • What are some examples of information goods?

24
Making money
  • At what price
  • Price sensitivity, distribution of valuations
  • Senior citizens, students
  • Offer the same product for different prices
  • What are some examples?

25
Making money
  • Versioning
  • Dimensions delay, interface, speed, features,
    etc.
  • How many versions should you offer?
  • When in doubt offer 3
  • Bundling
  • A special form of versioning in which two or more
    distinct products are offered as a package at a
    single price

26
Making money
  • Lock in (high switching costs)
  • Lock in makes customers less price sensitive
  • Something that is free today may become low cost
    tomorrow
  • Costs may rise over time
  • Example is me with The Street.com
  • Organizations want to lock in their customers
  • The question is how

27
Making money
  • Ways to achieve lock-in
  • Sticky applications like email or chat
  • As a consumer, beware of the free
  • There is no free lunch
  • Subscription services where people have to take
    action to cancel
  • Information
  • Once people invest in entering it, they are less
    likely to switch
  • Loyalty programs
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