Title: The Online Wine Industry
1The Online Wine Industry
- Abhiroop Gandhi
- Sudhir Gopal
- Maximiliano Hernandez-Toso
- Raghu Kakumanu
- Eungsang Kim
2The 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
3Policy 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.
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5Conclusion
- Legislation is the major barrier for the
emergence of the Amazon.Com of wine
6The Online Womens Clothing Industry
- By Yucheng Hu,
- Yimin Jiang,
- Andrew Jones
7Major Players in Online Womens Clothing
8Womens 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.
9Womens 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)
10The Online Flower Shopping
- By Ying Zhou, Yue Wu, Shan Wei,
- Zhao Gang Wo, Omotola Talabi
11Online 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
12Online 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
13The Online Jewelry Industry
- By Emily Coyle
- Kevin Daily
- Jane Chien
- Isnezawati Azali
- Halit Akcaglayan
- Nadia-Shazrin Asari
14Market 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
15The 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
16Average Mortgage Rates
- National 1999 average mortgage rates
Source http//www.mortgage-net.com/trends/market
/
17Some 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
18The Online Travel Industry (Airline Tickets)
Adam Ratana Rohit Ravinath Thiti
Wang-Aryattawanich Rubina Zaidi
19Industry 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)
20Making 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
21Making 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
22Making 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
23Making 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?
24Making money
- At what price
- Price sensitivity, distribution of valuations
- Senior citizens, students
- Offer the same product for different prices
- What are some examples?
25Making 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
26Making 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
27Making 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