Susan Shanlever Phillip Dickson

1
eBusiness Models

• Group 1
• Susan Shanlever Phillip Dickson
• Erin Bader Charl Welman

MIS 6453 E-Commerce Dr. Kelly Fish Fall
2003 Presented on September 25, 2003
2
Problem Identification
3
Porter Strategy Model

• Key concepts
• There are only three basic strategies
• Each implies a different business model
• Firms can pursue only one strategy at the time

Possible Strategies
Differentiation
Cost
Niche

• Requires constant innovation and leadership on
  the benefits that matter most to the customer

• Focus on gaining competitive advantage on costs
  while maintaining parity level on differentiation

• Focus the business on a particular segment of
  the market and then pursue either differentiation
  or cost strategy

Business Model
Networked Economy Example

• CarPoint.com

• kia.com

• mercedes.com

4
CarPoint Target Markets
CarPoints value cluster offers benefits that
address multiple segments of customers
Target Segments
Key Benefits Offered
Unique Capabilities
Value Cluster


CarPoint Primary Targets

• The efficiency of the Internet makes selecting
  and purchasing your car easier

• Knowledge of the Internet
• Software development expertise

• Information about cars and their prices
• Help on how to deal with dealers (tactics used,
  etc.)

• The intimidated by the process
• 55 college degree or higher
• 72,000 annual income

• The intimidated by the process
• 55 college degree or higher
• 72,000 annual income

• The information seekers
• 57 college degree or higher
• 66,000 annual income

• Microsoft brand name
• Network of partners

• The information seekers
• 57 college degree or higher
• 66,000 annual income

• Extensive information
• In different formats (3D views, pictures,
  videos)
• From different sources (i.e., Kelley Blue Book)

• Provides a one-stop source with all the
  necessary information to make a car purchase

5
CarPoint Target Markets
CarPoints value cluster offers benefits that
address multiple segments of customers
Target Segments
Key Benefits Offered
Unique Capabilities
Value Cluster

• The Internet makes gathering information easier
• Provides a one-stop source with all the
  necessary information to make a car purchase

CarPoint Secondary Targets

• Knowledge of the internet
• Network of partners

• Information about cars and their prices
• Extensive Information (same as Information
  seekers)

• Price is only one factor Buyers
• 57 college degree or higher
• 72,000 annual income

• Information about cars and their prices
• Help on how to deal with dealers

• Dissatisfied with the Process
• 55 college degree or higher
• 72,000 annual income
• 35 intimidated

• The efficiency of the Internet makes selecting
  and purchasing your car easier

• Microsoft brand name
• Network of partners

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Industry Analysis

• Substantial growth potential
• Increase in user access to internet
• Demand for faster/easier buying process
• Neglected sector (Exhibit 1)
• After-market
• Increased dealership trust service levels
• 7 Performance Requirements (Exhibit 11)
• Customer e-mail (Exhibit 10)
• Monthly feedback calls
• Dealership franchises
• 23,000 dealerships

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Dealership Franchises

• 12,000 maintain own website
• 6,000 subsrcibe to online services
• 5,000 no web presence
• Generate sales for every 100 spent
• Reduce advertising costs
• 400 per vehicle approximately (new car)
• 200 per vehicle approximately (used car)

10
Goals to achieve for 2001

• 74 million in revenue
• 162,000 new car referrals/month
• 4,250 new car franchises _at_ 1,500 fee
• 246,000 consumer members _at_59.00/yr

11
Purchase Decision Process

• Sets out the process
• Search for Ideas and Offerings
• Alternatives
• Generates Referral Requests
• Post-Sale Evaluation
• Education on Purchasing

12
CarPoint Egg Diagram

• Hottest new models
• New Drivers
• A Dealer Close to Consumers
• Easy to Find Desired Vehicle

Ideas and Information

• Huge Selection
• Do it yourself
• Easy online car comparison

• Model
• Make
• Special Features
• Location of Interest
• Mileage
• Gas Mileage

Car Purchase Decision Process

• Need Recognition

Product Offering

• Education on Purchasing
• A car on the internet

• Search for Ideas and Offerings

Online Links

• Consumer Reports
• Kellys Blue Book
• Edmonds

Post-Sale Support

• CarPoint follow up
• e-mail within 48 hours
• eQA online customer service
• FAQ
• Customer satisfaction form
• Phone Survey

• Post-Sale Evaluation

• Evaluation of Alternatives

• New Car/Used Car
• Product price/Promotions
• Product picture
• Product description
• Delivery information
• Delivery availability

• Referral
• Request

• Purchase Decision

• Made with Car Dealer
• No Haggle Pricing
• Dealer Routing/Referral

• Locate Dealer Near Consumer
• Dealer Response with in 24 hours
• Tips on Dealing with Dealers

13
CarPoint Resource SystemOnline Integration
Dealerships
Strong Distribution Network
Microsoft Network
Information About Vehicles and Their Prices
Compelling Software
Rich Content
Technology
Recognized Name
Popular Website
Low Prices
Contact with the Dealer
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CarPoint Resource SystemOnline Integration
Information About Vehicles and Their Prices
Compelling Software
Low Prices
Contact with the Dealer
Multiple Contact Points
Dealers
Online
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CarPoint Resource SystemOnline Integration
Information About Vehicles and Their Prices
Compelling Software
Low Prices
Contact with the Dealer
MSN
Wide Reach to Customers
Strong Brand Name
Microsoft
Microsoft.com
Cheap Ads
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CarPoint Resource SystemOnline Integration
Consumer Reports
Online Help Centers
Edmonds
Information About Vehicles and Their Prices
Compelling Software
Kelley Blue Book
RR
CUC
Strategic Partners
KBB
Low Prices
Yahoo
Contact with the Dealer
Bank Rate Monitor
AIC
AIS
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CarPoint Resource SystemOnline Integration
Consumer Reports
Dealerships
Strong Distribution Network
Online Help Centers
Edmonds
Microsoft Network
Information About Vehicles and Their Prices
Compelling Software
Rich Content
Kelley Blue Book
Technology
RR
CUC
Recognized Name
Strategic Partners
Popular Website
KBB
Low Prices
Yahoo
Contact with the Dealer
Bank Rate Monitor
Multiple Contact Points
AIC
AIS
Dealers
MSN
Wide Reach to Customers
Strong Brand Name
Online
Microsoft
Microsoft.com
Cheap Ads
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Overall
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RECOMMENDATION

• Follow the differentiation strategy
• Continue innovation
• Increase advertising budget
• Identify unique events