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A Business Plan
The (long-term) path to profitability Contents
Product Market Competitors Customers Risks Financials
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Figure 4.2 Elements of a business plan.
Business description
Sales and marketing
Finance
The market
The product
Management team
Industry overview, mission statement, the company's products orservices, company's position in the market, pricing strategies,competitive advantage.
Current status of product or service, production or service deliveryprocess, design/development budget, labor requirements, operatingexpenses, capital requirements, cost of goods.
Target customers, market size, target market, competitors, estimatedsales.
Plans for identifying potential customers and converting them toactual customers, distribution channels, advertising and promotionplan.
Risk assessment, cash flow, balance sheet, income statement,funding needs, return on investment, payback, net present value.
Owners and controlling stockholders, management structure, boardof directors, management support services.
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Competitive Advantage
Something that Your company can do Your customers want (or value) Your competitor cannot or will not match
Sources of competitive advantage Unique product Price Quality Cost controls and efficiency
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Figure 4.3 The value chain.
Conflicting objectives Local process vs. organization-wide efficiency Efficiency vs. effectiveness Faster, cheaper, better: Pick any two.
Inboundlogistics
Productionprocesses
Outboundlogistics
Sales andmarketing
Customerservice
Information technology infrastructure
Upstream Downstream
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Figure 4.4 The supply chain.
Conflicting objectives again Company vs. company
Upstream Downstream
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E-Commerce Business Environment
Low cost of entry Global reach Huge potential markets Intense competition
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Figure 4.5 The three categories form an integrated structure.
B2C(Customer focus)
Intra-business(Value chain focus)
B2B(Supply chain focus)
Integration is the future of e-commerce.
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Figure 4.6 The three categories are applications that communicate with each other via the infrastructure.
Another way to view integration
B2C
The World Wide Web
The Internet
The global data communication network
Intra-business
B2B
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Digital Products
Potential killer applications/services (?) Software Recorded media: music, movies, books Information services Online computer games
Diminishing returns does not apply EC is a digital technology
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Digital products do not experience diminishing returns.
High startup cost First copy
Low incremental cost After breakeven
Pure profit
Unitcost
Quantity
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Intermediaries
An intermediary is a middleman Disintermediation
Eliminating the middleman Sometimes claimed as e-commerce
benefit Reintermediation
New middlemen replace the old ones An e-commerce reality
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Negating Location
Geography no longer matters Global competition
Example—writing this textbook Participants
The authors (Florida and Ohio) The publisher (Boston) Production (New England) Printing and warehousing (Indiana)
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Figure 4.10 A manuscript page.
Created by the authors Florida Ohio
MS Word
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Figure 4.12 A copy edited page
Copy editor in Massachusetts
MS Word
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Figure 4.13 A finished page.
Paging done in Massachusetts
Adobe Acrobat
All electronic communication
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Figure 4.15 The competitive advantage model.
Stimulus for action
First major move
Customer acceptance
Competitor catch up moves First mover expansion moves
Commoditization
The two yellow boxes represent activities that happen simultaneously.
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