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Website Evaluations for eBusiness Model Design

Term Paper 2002 16 Pages

Business economics - General

Excerpt

Table of contents

Executive Summary

1. Introduction

2. Basis of choice

3. Business model

4. Business performance

5. Reverse value chain

6. “Wrigley’s”
6.1 Business performance
6.2 Competitive advantage

7. “Stimorol”
7.1 Business performance
7.2 Competitive advantage

8. “ColesOnline”
8.1 Business performance
8.2 Competitive Advantage

9. Conclusion

10. References
10.1 Books
10.2 Electronic Sources

11. Appendices
11.1 Appendix 1: Basis of choice
11.2 Appendix 2: Instrument/measurement tool for gathering and sorting important information from the webside
11.3 Appendix 3: Reasons for choosing the evaluation criteria used in Appendix 2

List of Figures

Figure 1: PWC Reversion of Power

Figure 2: Reverse Value Chain

Figure 3: Refining the business model

Figure 4: Taking advantage of the networked economy

Executive Summary

Even though the three websites evaluated within this report meet the basic costumer expectation of being visible on the net, they seem to miss the motivation to reconstruct their value chain and build an eBusiness design that could be used as a tool to invent new products from costumer wants. The reverse value chain business model that empowers costumers and encourages interactive communication is therefore not yet fully implemented.

1. Introduction

This report is initiated to discover how much I can learn about eBusiness design by evaluating the business model embedded in three business web sides of my own choice. In order to reflect on the value proposition, the competitive advantage, and the profit performance of three different web sides for later comparison, I found it necessary to analyse three sides that are targeting the same or similar costumer. Each of the three businesses has a different approach to design its eBusiness model and thus offers a variety in how to apply the reverse value chain. Within the following pages, I will evaluate each approach based on my perception of the findings in the three selected web sides:

http://www.wrigley.com/

http://www.stimorol.com/

http://colesonline.com.au/

2. Basis of choice

The reasons for choosing these particular websites are explained in Appendix 1.

3. Business model

In the most basic sense, a business model is the method of doing business by which a company can sustain itself – that is, generate revenue (Rappa,M, 2002, Managing the Digital Enterprise - Business Models, <http://digitalenterprise.org/models/models.html>, accessed 27.11.2002).

The advent of the Internet changes and has changed the normal rules of business and set rise for the evolution of new business models imbedded in the web. By applying the Business to Costumer, or BtoC model, the three websites discussed within this report have not created a completely new way of doing business. Nevertheless, they generated business performance, by initiating a new way of how to communicate with their costumers.

4. Business performance

Costumers as well as investors and/or suppliers are not only able to gain information from the web side, but at least for the “Wrigley” and “Stimorol” sides, the web is the only possibility to contact the companies directly. The web therefore gives the company the advantage to find out what the costumer wants, what kind of products he or she is interested in, what his or her concerns are, and so forth. “Coles” website even goes further, by not only offering interesting facts or entertainment, but also integrating a new concept, called eCommerce within their side.

“ECommerce is a concept to utilize specific information and communication technologies for the electronic integration and interlocking of value chains and processes between enterprises” (Kotler, P & Bliemel, F, 2001, Marketing management, 10th ed, Schaeffer).

This definition basically acknowledges that “Coles” not only responds to the emerging market pressure by being visible in the net, but also by creating a whole new distribution channel with all the necessary processes needed for the online order and delivery fulfilment. This approach implies not only a greater financial commitment, but it also requires the brick-and-mortar company to integrate new functions in their value chain. The next section will further explore the term value chain and how eBusiness can help to reverse the market-driven “push” approach into a costumer-driven “pull” approach.

5. Reverse value chain

In order to understand the concept of the reverse value chain, the following figure will demonstrate the potential of the Internet to work as a catalyst in accelerating consumer empowerment, and how quickly long established business models can be turned upside down.

illustration not visible in this excerpt

Figure 1: PWC Reversion of Power

Source: Darcy,B, 2001, Words of Wisdom CEO <http://www.pwcglobal.com/Extweb/service.nsf/ docid/346E77EB01E8E2DE85256894004F61B5#ebusiness> (Accessed: 25.11.2002)

In the traditional model, value was created by efficiently putting well-understood products on the market. This approach is also referred to as the product-driven “push” approach, or inside-out model. With the help of eBusiness, a company can gain competitive advantage by changing from the product-driven to a costumer-driven strategy, thus reversing the value chain. According to Kalakota and Robinson (2001), a customer centric business design places costumer priorities and requirements first, as is illustrated in the chart below:

illustration not visible in this excerpt

Coming back to our three websites, the following section will discuss on how the companies have or have not taken advantage of a new business opportunity by reversing their value chain.

6. “Wrigley’s”

Wrigley’s is a remarkably focused company that has not been tempted to stray too far from its family territory, but has concentrated instead on brand extension. The company has backed its brands with strong advertising, promotions and distribution (Kochan, N. 1996, The world’s greatest brands, Macmillan Press Ltd, London). This traditional brick-and-mortar background triggers two major questions: 1. Why has Wrigley’s set up a web page at all, and 2. Does the mere existence of the page create a value chain from a costumer desire? To answer those questions, and with the attempt to find a common ground to compare the three websites, Appendix 1 lists criteria used to evaluate how effective the web side has been set up in relation to the eBusiness model design. An explanation of the basis of the selection of the criteria is given in Appendix 2. The following figure helps to further reflect on the possibilities of how Wrigley’s could implement the reverse value chain approach in their website:

Figure 3: Refining the business model

illustration not visible in this excerpt

[...]

Details

Pages
16
Year
2002
ISBN (eBook)
9783638159814
ISBN (Book)
9783656560814
File size
492 KB
Language
English
Catalog Number
v9215
Institution / College
Swinburne University of Technology, Melbourne
Grade
80%
Tags
competitive advantage reverse value chain business model web site evaluation

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Title: Website Evaluations for eBusiness Model Design