Creating and Setting Strategy: Some New Plays Miklos A. Vasarhelyi Some strategy alternatives Create new technology Affiliate yourself or get affiliates to market for you Focus on improving internal processes or fully revamping them Outsource all EC related activities Eliminate intermediaries Strategies (cont.) Become an intermediate (re-intermediate) Focus on customer interface improvements in particular e-care reinvention Cannibalize yourself out of existence Change the industry your are in – Nibble at the edges of your industry Technology Intel Invests in Belgian Speech Technology (Lernout & Hauspie Software Company) Development of easy-to-use voice technology for e- commerce and telecommunications in various languages Ordering of merchandise over the internet by voice L & H‟s software products allow for speech recognition in German, Spanish, Italian and French Voice to be produced sounds more natural than robot-like Venture combines Intel‟s expertise in computer systems with L & H‟s speech and language software Ownership is 51% by Intel, and 49% by L & H Record Label Will Distribute Music Online Universal Records invests in technology to sell and distribute music over the internet by the end of the year – Working with Intertrust Technologies Corporation of Sunnyvale to develop software to securely store, sell and distribute their music online – Plans to have a pilot version running by the end of the year Success of pilot version determines the rollout of full service First major record company to publicly announce digital distribution Recordings will be sold as labels that arrive on a customer‟s computer hard drive, not on CDs or cassette tapes Incentive Demand is available Much of this demand is being filled by illegal content (made possible by MP3 - the free music technology for delivering music online) and independent labels ImageX.com and Corporate Express, Inc. Accelerate Online Corporate Buying Intent A solution for streamlining purchasing processes for corporate buyers in two markets Customer Benefits Access to Corporate Express‟ E-Way(R) office supplies internet ordering system and ImageX online printing center(TM): greater value to customers Transnational Financial Corporation Uses Electronic Commerce to Allow Brokers to Process Loans Via the Internet This Technology Will Allow Brokers to Inform Potential Borrowers Their Loan Status in Minutes TFN in „Preferred Partner‟ status with Contour Aim: to speed up loan approval process by 80% Contour‟s technology - WebIT (Web Integrated Technology), is an internet and e-commerce solution designed for wholesale lenders Loan applications to be submitted by brokers in California and six other states through Transnational‟s web site Transnational Financial Corporation (II) Brokers‟ Benefits – acceleration of transactions – reduced amount of work needed to complete transaction – minimization of errors due to data entry mistakes – reduction in the cost of each transaction – Increase in origination productivity Transfer of data is made directly into the Automated Underwriting system of Transnational – its „artificial intelligence‟ will allow the broker to receive an approval in minutes, with a minimum of documents and efforts Marketing Plays Wowstores Joins Dell in the World of Electronic Commerce Wowstores.com, Inc. joined Dell Computer Corp. by joining in the Dell affiliate program – now linked to www.dell.com through text links, banner ads, or virtual storefronts on the Wowstores site. – earns 1% of qualifying revenues an advantage since Dell‟s average system price exceeds PC industry averages AdCast Announces Broadcast Model For Internet Advertising AmeriComUSA, Inc., announced the availability of the AdCast and TrueManagement systems – allows internet advertisers to effectively implement marketing and advertising campaigns using non-scrollable e-billboards that stay on screen for a set time duration controls the number of times a web site displays any advertisement (by day, month or campaign) – advertisers have the ability to control advertising expenditures and closely monitor results based on a broadcast model support higher bandwidth media since they are a space seen by the browser independent of the web pages Available play time run between 15 and 90 seconds – allow for rich messaging – eliminates the waste factor currently being experienced with banner advertising Provide a solution to advertisers enabling them achieve quantifiable results When the advertiser controls the length of the message, rich media is delivered in its entirety Improved effectiveness compared to today‟s traditional internet banner ads. Preview Systems’ Digital E-Commerce Technology Enables NetSales to Deliver 2,500 Electronically Downloadable Software Titles Netsales adopted Preview‟s Ziplock(R) Electronic Software Distribution (ESD) technology and integrated it into their existing e-commerce services – More than 2,500 software titles are now available for digital download through Netsales‟ two-tiered distribution network This technology allows NetSales distribute digital goods to its customers through branded e-business sites Preview Systems (II) NetSales now offers software publishers and resellers one source for: – electronic software packaging – digital downloads – commerce site hosting – transaction processing – customer support – license management – sales reporting – fraud control – rights management – marketing support Preview‟s ESD technology provides complete support for multi-tier distribution and secure dowloads E4L Inc. and BuyItNow.com Form New Global E-commerce Superstore Contributions by E4L – Branding and promotions within E4L television and radio media – its online revenues from the sale of its “As seen on TV” products – a commitment for up to $10 million of additional financing – executive management expertise Contributions by BuyItNow – The new entity will operate under BuyItNow brand and will be managed by the current BuyItNow(R) team additional e-commerce assets will be added to this new entity through mergers, acquisitions and strategic joint ventures – A spectacular e-commerce platform, including an infrastructure that allows online chatting with separate store managers and customer service specialists E4L Inc. and BuyItNow.com (II) Majority interest to be owned by E4L Shares will be available through an initial public offering at a later date The transaction between both companies is subject to a definitive agreement, approval of the BuyItNow shareholders, and regulatory approvals Infrastructure LGS Launches New E-Commerce Business Unit:Integrates Internet, Telephony and Security Technologies for the First Time (I) LGS: One of Canada‟s largest information technology and management consulting firms E-Commerce business unit: „Ecommerce+‟, built using reusable frameworks Strategy Recent acquisition of companies specializing in internet (Ecommerce), telephony (CallPro) and security technologies (Domus) Merging of the various capabilities, including LGS‟s consulting, systems integration and project management abilities, into one Results A unique, integrated and broader approach to e-commerce – Improved relationship of organizations with their customers due to secure internet and telephony solutions – Reduced transaction costs – Customers conduct business in a most convenient way: with the choice of multiple channels of access LGS Launches New E-Commerce Business Unit:Integrates Internet, Telephony and Security Technologies for the First Time (II) Some of the solutions offered by ‘Ecommerce+’ CommerceCentre(TM) - a fully integrated call center with multimedia capabilities, allows organization to conduct business regardless of the medium used Track & Trace(TM) - allows customers to monitor online with suppliers for procurement of products and services Eprocurement(TM) - Enables organizations to interact online with suppliers for procurement of products and services Trade Xchange(TM) - a web-based system to support trading of products and services Mercantec SoftCart Delivers Fully-Integrated Electronic Commerce Solution (I) Mercantec, Inc.‟s SoftCart software to provide the solution to the growing number of service providers relying on the internet for commerce, ERP and other business-critical services Announcement were made in support of Sun Microsystems‟ ServiceProvider.com Initiative (which incorporates a new business unit, and a new set of on- demand, business enhancing products and services) – this initiative is designed to empower service providers to create stronger, more flexible and more profitable business models for the network-based world Mercatec (II) SoftCart Qualities Offers merchants the ultimate tool for building and maintaining their online store with high levels of ease, functionality and security – designed to be compatible with a merchant‟s existing business systems: open, API-based architecture that accomodates the widest range of databases, web servers and browsers order delivery options tax and shipping models payment systems allows the web site designer to tie SoftCart‟s capabilities into the merchant‟s web site at any stage in the site‟s evolution Dollar Bank Joins with Edify and TransPoint to Offer One-Stop Electronic Bill Payment and Presentment Dollar Bank, Pittsburgh, intends to be the first financial institution to use Edify‟s Electronic Banking Systems (EBS) to pilot TransPoint‟s Internet Bill Delivery and Payment (IBPD) – Dollar Bank licensed Edify‟s recently introduced Electronic Bill Payment and Presentment (EBPP) suite – It will use that as the foundation for presenting both internal and external bills to its customers, providing them with a comprehensive web portal for all their financial transactions Goal & Advantages: – To help customers maximize the number of bills they present by connecting into bill consolidators like TransPoint – Reduced cost to Dollar Bank (estimated cost for financial institutions to send and process internal bills = $.30 to $.50, a total of $2.9 billion in check processing and internal billing) 57% of the leading billing industries already offer or have investigated EBPP options Home Account Network and CheckFree Sign Distribution Agreement for Electronic Bill Payment and Presentment Terms of Agreement Home Account integrates CheckFree‟s E-Bill billing and payment services into its product offering for banks, brokers and other financial institutions Advantages to Home Account Network Provision of advanced bill payment and presentment services to customers – enhanced ability of customers to effectively compete in the market place Attraction of consumers to Internet Financial Services Home Account Network and CheckFree (II) Advantage to CheckFree Expansion of CheckFree distribution channels to reach a wider customer audience Advantage to Customers A highly cost-effective option to present and pay bills via the internet Other Priceline.com Patents Business Method Unique Name-your-price products and services in the travel, automotive and personal finance categories Allows airlines, rather than customers, to select flights and routing after customers agree to make purchase Results Priceline’s stock price rockets – Fear of being replicated by other companies online Strategy Patenting of company’s sales methods – 1st patent covers methods underlying its demand collection – 2nd patent covers the type of airline tickets sold by the company Priceline.com Patents Business Method (II) More Patents Have Been Applied For Patented methods invented by intellectual property laboratory Walker Digital Assigned to Priceline.com as part of a joint licensing agreement Walker Digital has applied for 20 U.S. and international patents related to Priceline.com business Yahoo! Boosts Small Biz E-Commerce Offerings (I) Yahoo! added services targeted at small businesses in search of entry- level e-commerce solutions Indicates the company’s emphasis on e-commerce driven revenue as a major part of its business development strategy – It recognizes the need for a set of services for the growing number of small businesses who wish to sell their goods and services online Yahoo!’s expanded e-commerce lineup includes – Yahoo! Site: For $29.95 a month, individuals can create a web site and immediately begin marketing their business online, also includes a suite of tracking and reporting tools – Yahoo! Store: offers merchants the ability to instantly create, publish and manage secure online stores to market and sell goods for $100 to $300 per month depending on their inventory size Yahoo! Boosts Small Biz E-Commerce Offerings (II) – Yahoo! Business Express: a one-time fee of $199 offers the inclusion of online stores in the main Yahoo!. It also offers a $500 package which provides each store with a one-week promotional text link – Yahoo! Connected Office: small companies create their own internal communication hub and intranet, also these businesses now have a password-protected location on the web where employees can interact – Yahoo! Small Business: provides useful tools and relevant information for small business owners e.g. package tracking for airborne express, federal express and UPS, industry news and business coverage, tips and weekly highlights relevant to small business, etc. Watch, Listen…Buy@Once RealNetworks joins with @Once (SanFransisco) and EC Direct to develop Buy@Once Goal To provide streaming audio and video contents in e-mails that will enable a customer make a purchase without clicking to a web site Upside Allows web merchants to deliver the right offer to the right place at the right time Downside Customers’ disdain for being bombarded with the cyber equivalent of TV and radio commercials Strategy to Overcome this Downside Service will be targeted based on individual’s web preferences, not blind, unsolicited pitches.