What are the Contributing Factors for Business Success and Failure in B2C ECommerce

1
What are the Contributing Factors for Business
Success and Failure in B2C E-Commerce

• By
• Adam Morte
• Keely Ritchie-Boland
• Thomas Rollino

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E-Commerce

• The buying and selling of goods and
  services over public and/or private computer
  networks
• Becoming a fundamental way of processing
  transactions between buyers and sellers
• Internet is now an important marketplace for
  businesses
• 66 of adult Americans now use the internet

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B2C E-Commerce

• Sellers are organizations
• Buyers are individuals
• B2C e-commerce is a multi-billion dollar industry
• Our research topic
• What are the contributing factors for business
  success and failure in B2C e-commerce

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Case Studies of 6 B2C E-Commerce Businesses

• Three successful
• Webvan.com
• Pets.com
• Furniture.com
• Three unsuccessful
• Amazon.com
• Netflix.com
• Dell.com

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Webvan.com

• Online grocery business that delivered products
  to customers homes within a 30-minute window of
  their choosing
• Launched in the San Francisco, California in 1999
• Went public in November 1999, stock price 30
• By summer 2001, stock price 0.06
• Shut down operations and filed for Chapter 11
  bankruptcy protection

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Webvan.com Cont.

• Too big too fast
• Focused on short-term profitability over
  long-term growth
• Too much investment in infrastructure
• Signed 1 billion contract to build a string of
  high-tech warehouses worth about 30 million each
• Doing it all on their own
• Built its own infrastructure to deliver groceries
  instead of partnering with a click-and-mortar

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Pets.com

• Pet supply website that sold pet accessories and
  supplies
• Considered a leading icon of dot-com bubble
• Widely popular sock puppet spokesdog
• Went public in February 2000
• On November 6, 2000, the company closed its doors
  while it still had a positive net worth

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Pets.com Cont.

• Highly competitive arena
• Competing with many click-and-mortar pet supply
  businesses
• Financial problems
• Significant investments in infrastructure
• Operating expenses out of hand
• Consumer had no reason to shop at Pets.com

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Furniture.com

• Online furniture store
• Launched in 1998
• Filed IPO in January 2000
• It became know that company had lost 46.5
  million in 1999
• Withdrew IPO in June 2000
• In November the company shut down

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Furniture.com

• High shipping costs
• Poorly built back-end computer systems
• Many shipments were shipped without charging a
  proper price for them, to the wrong place, or not
  at all
• Product was not suited to e-commerce
• Too expensive, too large, and no touch and feel

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Amazon.com

• Sells books and many other products
• Developed in a garage in Settle in 1994
• In 1999 sales exceeded 1 billion
• Survived dot-com burst
• In 2006, company reported 10.71 billion in
  revenue

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Amazon.com Cont.

• Growth over profit
• Put money into expanding their company
• Online community
• Connects people around the world
• Inventive ideas
• zShops
• Free shipping promotion

13
Netflix.com

• Internet-based DVD rental service
• Invented and dominate the DVD rental market
• Over 6.8 million subscribers in United States

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Netflix.com Cont.

• Moneyball Strategy
• Company uses data to make decisions
• Partnerships/Subsidaries
• Partnership with Best Buy to sell DVDs
• Red Envelope Entertainment Group subsidary

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Dell.com

• Sells computer systems directly to customers
• Builds computers to meet customers needs and
  wants
• In 2006 revenues totaled 57.9 billion

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Dell.com Cont.

• Automated e-commerce network
• Robots are installed on assembly lines
• Radio powered ID chips
• Make tasks much easier to accomplish

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Recommendations

• Sell the right product
• Properly manage finances
• Partnerships
• Focus on growth over profits
• Inventive ideas

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Scope of Further Work

• Focus on specific sectors within the realm of B2C
  e-commerce businesses
• Focus on pure B2C e-commerce businesses
• Focus on click-and-mortar e-commerce businesses