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Developing the eBusiness Model
St. Louis, MOFrom a Seminar by Arthur Andersen
eBusiness facilitates the conduct of business
• eBusiness transforms the exchange of goods, services, information, and knowledge through the use of network-enabled technology
eBusiness and the Challenge to Existing Business Models
• Hard assets
• Low risk tolerance
• Cost, control and process efficiency formed the basis of competition
• Manufacturing was the source of wealth
• Supplier driven
• New entrants lacked access
Emerging business Models
• Catalog
— Almost all (B2C), Chemdex (B2B)
• Auction
— eBay (B2C), PlasticsNet (B2B)
• Bid
— Priceline (B2C), FreeMarkets (B2B)
Community is the critical success factor in any eBusiness Model
TransactDraw vendorsto community
Capture HigherShare of Wallet
Understand
Gather informationabout members
Target advertisingand transaction
offerings
Educate, Entertain, and Inform
Draw members
to community
Generate member
based content
Building Successful
Online Businesses
Interact
Promote member-tomember interaction
Build member loyalty to community
Adapted from Hagel & Armstrong
Sears RoebuckEli Whitney Reuters
Henry Ford
The winners will be those that excel in business model innovation
Mp-3 Player
Mp-3 Format
Digitally encoded Music d-base for Instore sampling
Customizable Mp-3 compilations (legal) ?
Mp-3 Subscriptions-All you can download
Mp-3.com- Record Cds for Artists
Buy CDs online- CD Now, Amazon, Chapters
Music Samplers on the Web - HMV/Polygram
On-line Radio Broadcast
Buy CD in Store
SONY-CD Players
Buy 1 Cd -Get 10 Free-Columbia House
Radio Broadcasting
Content (Products and/or Services)
Legacy Content New e-Content
VirtualVirtual
(WWW)(WWW)
PhysicalPhysical
(Legacy)(Legacy)
Conte
xt
STATUS - QUO E - INNOVATION
BIZ.COM BREAKTHROUGH.COM
© 1999 Arthur Andersen. All rights reserved.
Accepting the Challenge
• Strategy
• Organization
• Design
• Build
Business LandscapeAnalysis
StrategicInnovation Workshop
Market & Customer Analysis
Market Offering Workshop
CriticalEnablers Analysis
Strategy SelectionWorkshop
StrategicActionPlan
•Industry
•Customer
•Competitors
•Internal
•Review and challenge current vision
•Brainstorm opportunities
•Articulate initial market offering hypotheses
•Market identification and analysis
•Target market selection
•Customer requirements
•Test initial market hypotheses
•Refine market offering hypotheses and vision
•Business processes
•Skills
•Brand positioning
•Alliances and joint ventures
•Organization structure
•Performance measures
•Competitive positioning
•Business model selection
•Future state strategy articulation
•Vision articulation
•Clear action plan of step deliverables
•Initiate Solution Design program
Phase One Phase Two
Strategy - the key is to generate then validate innovative market offerings
Organization - Build the right team
• Leadership
• Proven skills
• New business process
Design - Create Community
• Content
• Member Loyalty
• Gather Information
• Engage vendors
Build - Process and Technology
• Infrastructure
• Highly scaleable site
• Business processes
• Marketing
Example - yourPharmacy.com
• Strategy
• Organization
• Design
• Build
Directives
• Assemble team that can execute
• Accept partial/minimal org/func capabilities
• Keep your eye on the ball
• Deliver quickly
• Establish continuous improvement processes
• Time is your friend & enemy