what are the contributing factors for business success and failure in b2c e-commerce by adam morte...
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What are the Contributing What are the Contributing Factors for Business Success Factors for Business Success and Failure in B2C E-and Failure in B2C E-CommerceCommerce
By By Adam MorteAdam MorteKeely Ritchie-BolandKeely Ritchie-BolandThomas RollinoThomas Rollino
E-CommerceE-Commerce
The buying and selling of The buying and selling of goods and services over public goods and services over public and/or private computer networksand/or private computer networks
Becoming a fundamental way of Becoming a fundamental way of processing transactions between processing transactions between buyers and sellersbuyers and sellers– Internet is now an important Internet is now an important
marketplace for businessesmarketplace for businesses 66% of adult Americans now use the internet 66% of adult Americans now use the internet
B2C E-CommerceB2C E-Commerce
Sellers are organizations Sellers are organizations Buyers are individualsBuyers are individuals B2C e-commerce is a multi-billion B2C e-commerce is a multi-billion
dollar industrydollar industry Our research topic:Our research topic:
““What are the contributing factors What are the contributing factors for business success and failure in for business success and failure in
B2C e-commerce”B2C e-commerce”
Case Studies of 6 B2C E-Case Studies of 6 B2C E-Commerce BusinessesCommerce Businesses
Three successful:Three successful:– Webvan.comWebvan.com– Pets.comPets.com– Furniture.comFurniture.com
Three unsuccessfulThree unsuccessful– Amazon.comAmazon.com– Netflix.comNetflix.com– Dell.comDell.com
Webvan.comWebvan.com
Online grocery business that delivered Online grocery business that delivered products to customer’s homes within a products to customer’s homes within a 30-minute window of their choosing30-minute window of their choosing– Launched in the San Francisco, California Launched in the San Francisco, California
in 1999in 1999– Went public in November 1999, stock price Went public in November 1999, stock price
$30$30– By summer 2001, stock price $0.06By summer 2001, stock price $0.06– Shut down operations and filed for Chapter Shut down operations and filed for Chapter
11 bankruptcy protection 11 bankruptcy protection
Webvan.com Cont.Webvan.com Cont.
Too big too fastToo big too fast– Focused on short-term profitability over Focused on short-term profitability over
long-term growthlong-term growth Too much investment in Too much investment in
infrastructureinfrastructure– Signed $1 billion contract to build a Signed $1 billion contract to build a
string of high-tech warehouses worth string of high-tech warehouses worth about $30 million eachabout $30 million each
Doing it all on their ownDoing it all on their own– Built its own infrastructure to deliver Built its own infrastructure to deliver
groceries instead of partnering with a groceries instead of partnering with a click-and-mortar click-and-mortar
Pets.comPets.com
Pet supply website that sold pet Pet supply website that sold pet accessories and supplies accessories and supplies – Considered a leading icon of dot-com Considered a leading icon of dot-com
bubblebubble– Widely popular sock puppet spokesdogWidely popular sock puppet spokesdog– Went public in February 2000Went public in February 2000– On November 6, 2000, the company On November 6, 2000, the company
closed its doors while it still had a closed its doors while it still had a positive net worthpositive net worth
Pets.com Cont.Pets.com Cont.
Highly competitive arenaHighly competitive arena– Competing with many click-and-mortar Competing with many click-and-mortar
pet supply businessespet supply businesses Financial problemsFinancial problems
– Significant investments in infrastructure Significant investments in infrastructure – Operating expenses out of handOperating expenses out of hand
Consumer had no reason to shop at Consumer had no reason to shop at Pets.comPets.com
Furniture.comFurniture.com
Online furniture storeOnline furniture store Launched in 1998Launched in 1998 Filed IPO in January 2000Filed IPO in January 2000
– It became know that company had It became know that company had lost $46.5 million in 1999lost $46.5 million in 1999
Withdrew IPO in June 2000Withdrew IPO in June 2000 In November the company shut In November the company shut
downdown
Furniture.comFurniture.com
High shipping costsHigh shipping costs Poorly built back-end computer Poorly built back-end computer
systemssystems– Many shipments were shipped without Many shipments were shipped without
charging a proper price for them, to the charging a proper price for them, to the wrong place, or not at allwrong place, or not at all
Product was not suited to e-commerceProduct was not suited to e-commerce– Too expensive, too large, and no touch Too expensive, too large, and no touch
and feeland feel
Amazon.comAmazon.com
Sells books and many other Sells books and many other products products
Developed in a garage in Settle in Developed in a garage in Settle in 19941994
In 1999 sales exceeded $1 billionIn 1999 sales exceeded $1 billion Survived dot-com burstSurvived dot-com burst In 2006, company reported $10.71 In 2006, company reported $10.71
billion in revenuebillion in revenue
Amazon.com Cont.Amazon.com Cont.
Growth over profitGrowth over profit– Put money into expanding their Put money into expanding their
companycompany Online community Online community
– Connects people around the world Connects people around the world Inventive ideasInventive ideas
– zShopszShops– Free shipping promotionFree shipping promotion
Netflix.comNetflix.com
Internet-based DVD rental serviceInternet-based DVD rental service Invented and dominate the DVD Invented and dominate the DVD
rental marketrental market– Over 6.8 million subscribers in Over 6.8 million subscribers in
United StatesUnited States
Netflix.com Cont.Netflix.com Cont.
““Moneyball” StrategyMoneyball” Strategy– Company uses data to make Company uses data to make
decisionsdecisions Partnerships/SubsidariesPartnerships/Subsidaries
– Partnership with Best Buy to sell Partnership with Best Buy to sell DVDsDVDs
– Red Envelope Entertainment Group Red Envelope Entertainment Group subsidarysubsidary
Dell.comDell.com
Sells computer systems directly Sells computer systems directly to customersto customers– Builds computers to meet customers Builds computers to meet customers
needs and wantsneeds and wants In 2006 revenues totaled $57.9 In 2006 revenues totaled $57.9
billionbillion
Dell.com Cont.Dell.com Cont.
Automated e-commerce networkAutomated e-commerce network– Robots are installed on assembly Robots are installed on assembly
lineslines Radio powered ID chipsRadio powered ID chips
– Make tasks much easier to Make tasks much easier to accomplishaccomplish
RecommendationsRecommendations
Sell the right productSell the right product Properly manage financesProperly manage finances PartnershipsPartnerships Focus on growth over profitsFocus on growth over profits Inventive ideasInventive ideas
Scope of Further WorkScope of Further Work
Focus on specific sectors within Focus on specific sectors within the realm of B2C e-commerce the realm of B2C e-commerce businessesbusinesses
Focus on pure B2C e-commerce Focus on pure B2C e-commerce businessesbusinesses
Focus on click-and-mortar e-Focus on click-and-mortar e-commerce businessescommerce businesses