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Defining Your E-business Idea
Chapter 2
The Entrepreneur
• Someone who assumes the RISKS of starting and running their own business
• An entrepreneur needs– High energy personality– Self-confidence– High levels of organizational skills– Ability to act
The Entrepreneurial Process
E-business Success Factors
• The network effect
• Scalability
• Innovative Web Marketing Ideas
• Ease of entry into (electronic) markets
• Adaptability to change
The Network Effect
• The greater the number of nodes (participants) the greater the value of the network.
• Metcalf law of network power– Power= number of nodes2
Scalability
• Scalability is the ability of your idea to continue to function regardless of size.
• Scalability is also can refer to the ability of a server or internet service to support increased loads.
Innovative Web Marketing Ideas
• Use the power of the Web and Internet to leverage new ideas.
• Hotmail gave away free e-mail accounts that used a Web interface and was linked to a site.
Hotmail
Ease of Entry Into Markets
• The Internet opened up access to markets by lowering barriers to entry.
• Good ideas can be cloned.
• Advantage frequently goes to First Mover
• Ebay was a “first mover”
Ebay Auction Site
Adaptability to Change
• Internet and Web Technologies facilitate rapid change in business models.– New products or services – New features– Amazon.com added auctions to their
product/service mix.
Amazon.com
Exploiting E-Business Advantages
• Expand the Market
• Acquire greater business visibility
• Maximize customer relationships and improve responsiveness
• Create new services
• Reduce costs
Expand the Market
• Reach more customers
• Lower location barrier
• Lower time zone barrier
Acquire Greater Visibility
• The internet allows companies to get their name and products or services in front of more customers that ever.
• (The problem is getting customers to look.)
• Use or outsource distribution to others.– Fingerhut ditributes for eToys and Pier1
Maximize Customer Relationships
• Build one-on-one relationships with customers
• Use technology to build and sustain links with customers.
Improve Responsiveness
• Use technology to respond more quickly or effectively to customer needs and inquiries.– Use services such as parcel tracking and
delivery confirmation– Allow for on-line purchases
Create New Services
• The Web allows for expansion and refinement of tarditional business.
• Add new products quickly
Reduce Costs
• The Internet can lower costs of doing business by lowering– Distribution costs– Marketing costs
Example Web Sites
• Fingerhut
• Half.com
• Southwest Airlines
• WW Grainger
• Trailmaker
• Sun Micorosystems
• Foodlocker
Fingerhut
Half.com
Southwest Airlines
Grainger.com
Trailmaker
Sun Microsystems
Foodlocker.com
Grocery Works.com