MAR 6936902

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MAR 6936-902

• E-Commerce Marketing
• Fall 2002Tampa--MBA
• Blown To Bits
• Rich Gonzalez
• September 19, 2002 (Week 4)

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For Site/Model Evaluation

• 6 Marco
• 7 Aaron
• 8 Daphne
• 9 Jean-Sebastian
• Today Please peruse Nielsen Tahir
  bookHomepage Usability

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URLs

• ebay.com
• www.paypal.com
• wsj.com
• www.winsupersite.com/showcase/tabletpc_preview.asp
  

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Agenda September 19, 2002

• PC Tablet
• WSJ Online
• Due For September 26
• Porter
• Blown To Bits--Discussion
• Possible Class Cancellation for 9/26

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PC Tablet

• Innovation
• Wireless
• Handwriting Recognition
• Convertible
• www.winsupersite.com/showcase/tabletpc_preview.asp

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Killer App

• def. a new good or service that establishes an
  entirely new category and, by being first,
  dominates a market or an industry, returning
  several hundred percent in ROI for the innovators
• Generative or destructive?

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For Today September 19

• Blown to Bitsp.1 - 97
• Weekly Analysis Paper 1 Due

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For September 26

• Blown to Bitsp.99 167Competing on Reach,
  Affiliation Richness

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For September 26

• Start WSJ Online
• 1. Create a profile of topics
• 2. Read the E-Commerce Special Section

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WSJ Online Demo
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Blown To Bits

• Subjects (use bolded headings)1. Information
  Asymmetries2. Deconstruction3.
  Disintermediation
• 4. You Pick One (i.e., 5 forces, killer app,
  standards, etc.

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Blown To Bits Subjects

• Information Asymmetries
• Deconstruction
• Disintermediation
• and...???

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New Economics of Information

• The evolving and advancing technologies for
  sharing and using information to
• Transform business
• Industry
• Competitive Advantage
• Britannica Example...
• ...is generalizable

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Strategic Competitive Advantage--Porter

• A competitive advantage is a super strength of a
  company, relative to competitors, that provides a
  distinctive value proposition to consumers, and
  is significantly valued by those consumers.
• It is sustainable.

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Encyclopaedia Britannica contd

• Strategic Competitive Advantage
• Quality Volume
• Sales Force
• 1,500 PriceLarge Margins
• Thoroughness

• Strategic Competitive Disadvantage
• Too Big For CD
• Commissions
• 75--50--0
• Too Slow To React

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Scenario

• Sales-----Up
• Profits-----Growth
• Employees---Growth
• Credit -------Up
• Reputation---Up
• Stock-----------Up
• What should you do?

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Themes in Blown To Bits

• SCA to SCD
• Legacy Assets
• Speed
• Seeing (what is visible)
• Not Zero-Sum

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Porters Competitive Business Model
New Entrants
BP of Sellers
BP of Buyers
Intraindustry Rivalry
Substitutes
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The Porter framework

• The Porter Generic Strategy framework is well
  established.
• Three generic strategies -- Differentiation, Low
  Cost and Focus
• Strengths of the Porter approach are that it is
  well known, easy to understand and adaptable to
  e-commerce.

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(No Transcript)
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Strategy

• The essence of strategy is choosing to perform
  activities differently than rivals do.
• Must be flexible to respond rapidly to
  competitive and market changes. Michael E.
  Porter
• What Is Strategy?, Nov-Dec 1996, HBR

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Business Model

• Value Proposition
• What you give and what you get
• Value and Revenues
• How will the business win?

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Business Model

• 1. Value Proposition or Target Cluster
• 2. A Marketspace Offering
• 3. Unique and Defensible Resource System
• 4. Financial Model

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Superior Value Proposition

• The value proposition is the total market
  offering to customers and is closely related to
  the Four-P marketing mix.
• A superior value proposition can be based on a
  superior product, price, distribution or
  promotion or a superior combination of these.

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Most Important Factor In Biz?

• Information
• Information
• Information

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Information Asymmetry

• Knowledge a Transaction Participant Possesses In
  Which You Are Not Privy To.
• How does this affect transactions?

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Information Asymmetries

• Vendors
• Consumers
• Buyers
• Price
• Assumption is that they exist

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Big Concepts

• Information
• Amplification
• Asynchronicity

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Evans Wurster

• Who are these guys?
• Information
• Information

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Blown To Bits Recommendations

• Clayton Christensen
• Edgar Bronfman, Jr. Seagrams
• Jacques Nasser, Ford Motor Co.
• Toby Lenk, eToys
• Jean-Marie Messier, Vivendi
• Shikhar Ghosh, Open Market, iBelong

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Information Asymmetry

• One to many to many to many communication, i.e.,
  eBay
• Playing field being leveled for buyers
• Maybe tilting over to buyer side
• Decrease in asymmetry changes brand building
  processs
• Feedback, objective, or subjective
• Consumers need funnel to analyze huge information
  available

In Class Exercise
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Deconstruction

• Dismantling and reformulation of traditional
  business structures.

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Deconstruction

• Requires each business unit to stand alone, i.e.,
  newspaper departments.
• Efficient networks leads to more viable ad hoc
  assemblages of biz units
• Basic tasks/operations not really eliminatedjust
  recomposed
• Increased competition between units in the value
  chain
• Specialization in operations is encouraged and
  only the best survive
• Driving force to motivate change of operations

In Class Exercise
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Disintermediation

• Not always possiblepower of the channel captain
  , i.e, Levis
• Perishbility of some products (i.e., milk)
  prohibits.
• Some products, even perishables, CAN be delivered
  in short time
• Manufacturer direct sales
• Lowers price
• In banking, disintermediating itself teller is
  eliminate, online info direct
• Traumatic

In Class Exercise
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Disintermediated

• Stockbrokers
• E-learning , teaching
• Video rentals i.e., Netflix
• Travel agents
• Salespeople, especially high comm.
• Special content producers, writers, radio
  commentators

In Class Exercise
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Standards

• Need critical mass to become standards
• Standards amplify operations/tools quickly
• SCA
• Competition to establish
• Not always best one succeeds
• Windows vs. OS2

In Class Exercise
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• Adding Richness Is the Best Way To Forestall
  Deconstruction

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Change, Techno, Info, Process...

• The Only Sure Winner Is the Customer

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What Is Wrong With This?
More info, more SCA
Its Linear
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E W Say
SCA
More info, LOTS more SCA
Information
Not Linear
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Causes

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Information Is The Glue
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Richness

• Bandwith
• Interactivity
• Accuracy, Validity (Reliability)
• Security
• Currency

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Reach

• Number of peopleat home or at workexchanging
  information.

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Richness vs. Reach
Encarta
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Richness

• Phonebook
• Ad Insert
• Mag. Ad
• Newspaper
• Radio Ad

• Salesman
• Website
• Experience
• WON

• Direct Marketing
• Website
• WOM
• RFP?

-------------Richer---------------?
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Feedback on eBay

• Community
• Self Policing
• Information
• Facilitation
• Trust

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Rating Sites

• www.bizrate.com
• www.dealtime.com
• shopping.yahoo.com
• www.pricegrabber.com
• www.cnet.com

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Consequences

• Deconstruction
• Disintermediation
• Affect Supply Chain and Organization