1. MAR 6936-798 E-Commerce Marketing Spring 2003 Downtown--MBA Blown To Bits II Rich Gonzalez February 6, 2003 (Week 5)

2. URLs

wsj.com(After the Bust)

www.freshdirect.com

www.fandango.com

www.spyderchat.com

www.carmax.com

www.kbb.com

www.carfax.com

http://cgi.ebay.com/ebaymotors/ws/eBayISAPI.dll?ViewItem&item=2402434367&category=15289

3. Grading Criteria

Start Out With 125 Points

Areas for Improvement: F = Format (Cover page, Headings,T = Thoroughness A = Analysis L = Late (20% a day)

4. AgendaFebruary 6, 2003

WSJ and BusinessWeek Articles

CDP Example

Due For February 13

Blown To BitsDiscussion

E-Ordering

5. For Today: February 6

Blown to Bits,p.99 167

Analysis Paper # 3

WSJ Online :After the Bust, William Boston, WSJ Online, January 27, 2003

BusinessWeek The Start of A Dot-Comeback, BW, February 3, 2003 http://www.businessweek.com/magazine/content/03_05/b3818061.htm

6. For February 13

Blown to Bits,p.221 229

WSJ Online :United Online Adds Subscribers, Swings to Profit in 2nd Quarter, February 6, 2003

Hotels.com Triples Net Income But Misses Lowered Forecasts February 5, 2003

Wrap UP Discussion: Blown To Bits

7. The Start of A Dot-Comeback, BusinessWeek, February 3, 2003

Web-Van vs. FreshDirect Visit site

Fandango Visit site

Red Envelope

How Does a Start-Up Get Investment in 2003?

Focus on the bottom line.

Models that mimic eBay or trade in information.

8. 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

9. After the Bust, William Boston, WSJ OnlineJanuary 27, 2003

Strategy

200 Online Brokerages In 2000

The difference with our previous strategy is that today we help the customer make investment decisions."

MORE ServicesMore Consulting

Searching For: New Online Brokerage Model

Self Trade and Cahoot

How Many Will Fail?

10. 3 Fundamental Business Shifts

1. Most transactionsB2C, B2B, C2C and G2C will becomeself-service digitaltransactions.

2.Customer servicewill become the primary value-added function in every business.

3. The pace of transactions and customer needs for customer service will force firms to adoptdigital processes ---for survival.

11. Stewart Brand:

Information wants to be free.

12. Scientia Est Potentia

Applied Problem: CDP Stages For An Online/Offline Purchase

Consumer Decision Process: Problem Info Gather Evaluate Purchase Use

What you dont know can hurt you.

13. A Car

MR2 Spyder

Where Does One Get Info?

Advocate Sources www.carmax.com

Non-Advocate Sources www.spyderchat.com

Independent Sources www.kbb.com

14. Source

Advocate: Has an interest in primary transaction or related concerns

Non-Advocate: Has no financial interest in product or service informationi.e., fellow customer

Independent: Standard Issuer, Industry Evaluator, Data Provider, Regulator

15. Independent: Industry Data

Numerous Sources

www.kbb.com

Site Visit

16. Advocate: For Sale Online

Numerous Sources

www.carmax.com

Site Visit

17. Non-Avocate:Spyderchat

Information Amplification Asynchronicity

Site Visit

18. For Sale Online

Numerous Sources

http://cgi.ebay.com/ebaymotors/ws/eBayISAPI.dll?ViewItem&item=2402434367&category=15289

19. Indy: Support Data

Numerous Sources: Industry Data

www.carfax.com

Site Visit

20. Stewart Brand:

Information wants to be free.

Information wants to be expensive.

21. Weekly Analysis Paper # 3

Subject: Blown To Bits

Length: 1.5 Pages, Cover Page--125 pts

Due: February 6

Subjects:(use bolded headings) 1. Competing on Reach 2. Competing on Richness3. Competitive Advantage

22. Competing on Reach

Bigger is betterNetwork effect

Critical mass

Reach is clutter without navigationi.e., # of brands of cerealtoo dynamic

Digital networks have allowed separation of navigation and the physical aspects of business

Blowing up the reach/rich tradeoff creates race between suppliers, navigators, retailers

Navigators facilitate choice but exert influence on buyers

Companies can COMBINE to achieve critical masscould not do it alone

In Class Exercise 23. Competing on Richness

Competitors who do not/cannot reach critical mass HAVE to compete on richness

Information can be rich about: 1) product 2) customer

Information on Brands

Richness could create loyaltyeliminating need for navigators

Richness of info by navigators could lessen need for brand as shortcut in evaluation stage

Adding richness forestalls deconstruction

Marketers have so much customer data that it could impinge on customer privacy

In Class Exercise 24. Competitive Advantage

Navigators CA is by affiliating with interests of consumersbuyers agent

By breaking reach/richness constraint---you get the consumer affiliation

Segment of 1 with data mining, db marketing & mass customization--reduce cost of marketing & increase effectiveness

In Class Exercise 25. Deconstruction

Dismantling and reformulation of traditional business structures.

Econ of Things/Econ Of Info Split Richness Reach Tradeoff Blowup Deconstruction of Biz Structures Reconstruction of Business Structures 26.

Adding Richness Is the Best Way To Forestall Deconstruction

27. 28. Change, Techno, Info, Process...

The Only Sure Winner Is the Customer

29. What Is Wrong With This? More info, more SCA Its Linear SCA Information 30. E & W Say:More info, LOTS more SCA SCA Information Not Linear 31. Richness

Bandwith

Interactivity

Accuracy, Validity (Reliability)

Security

Currency

32. Reach

Number of peopleat home or at workexchanging information.

33. Richness vs. Reach Encarta 34. Richness

Phonebook

Ad Insert

Mag. Ad

Newspaper

Radio Ad

Salesman

Website

Experience

WON

Direct Marketing

Website

WOM

RFP?

Richer 35. Stewart Brand:

Information wants to be free.

Information wants to be expensive.

36. End Here