Showing posts with label Week 3. Show all posts
Showing posts with label Week 3. Show all posts

An example of an E-Commerce failure and its causes

Tuesday, February 3, 2009

Story of Webvan

Webvan was an online “credit and delivery” grocery business. Webvan tried to have a total customer satisfaction model that involving a 30 minute window delivered products to customers' homes after their choosing.It was founded in the late 1990s by Louis Borders who also co-founded the Borders bookstore in 1971. Webvan's original investors included Goldman Sachs and Yahoo!, who encouraged Webvan to rapidly build its own infrastructure to deliver groceries in a number of cities. It was headquartered in Foster City, California, USA which near Silicon Valley. It offered service in ten U.S. markets such as Los Angeles, Chicago and Portland. The company had originally hoped to expand to 26 cities. However, Webvan went bankrupt in 2001.

What causes Webvan failure?

While Webvan was popular, the management used the money spent on infrastructure that far exceeded sales growth. Furthermore the company eventually ran out of money. For example: Webvan placed a $1 billion (USD) order with engineering company Bechtel to build its warehouses, bought a fleet of delivery trucks, purchased 30 Sun Microsystems Enterprise 4500 servers, dozens of Compaq ProLiant computers and several Cisco System model 7513 and 7507 routers, as well as more than 80 21-inch ViewSonic color monitors and at least 115 Herman Miller Aeron chairs which over $800 per each. Besides, some journalists and analysts blamed that none of Webvan's senior executives (or major investors) had any management experience in the supermarket industry such as CEO George Shaheen who had resigned. On the other hand, the ineffective customer services such as failed to deliver the order on time. This will make customer has a negative impression to Webvan. Some of the comments from the customer will also lead people put less confident to buy products from Webvan. These are some of the factors made Webvan went bankrupt in 2001.

In conclusion, e-commerce companies in order to avoid failure should have useful of business strategies which are 4P’s (product, price, promotion and place), organizational structure, customer relationship and sensitive to the external factors such as technological and competitive environment.

A success story of E-Commerce and its causes

Monday, February 2, 2009



There are a lot of successful stories of e-commerce in business world today. One of the most successes is e-bay. eBay is a company which started in year 1995 to connect hundreds of millions of people around the world every day, empowering them to explore new opportunities and innovate together.
Despite differences in language, culture and economic status, people around the world are united in their fundamental need to connect, discover and interact with each other.People seek fulfillment of these basic needs in their day-to-day activities. As we explore, learn, shop, share and talk with each other, we are also aspiring toward a more emotionally satisfying experience as human beings.
eBay's original vision was to create the world's first global economic democracy. We saw a "people's market" in which anyone in the world could sell or buy just about anything for a fair price. And today on the eBay marketplace, trust, honesty and efficiency are rewarded more than size or status.
eBay has built an online person-to-person trading community on Internet, using the World Wide Web. Buyers and sellers are brought together in a manner where sellers are permitted to list items for sale and the buyers are allowed to bid on the items which they are interested on. All eBay users can browse through listed items in a fully automated way. The items are arranged by topics, where each type of auction has its own category. They are having both streamlined and globalised traditional person-to-person trading. Their facility is easy for the buyers to explore and enables the sellers list an item for sale immediately within minutes of registering. The binding contract of the auction is between the winning bidder and the seller only.

Causes of success

According to the spokesperson of eBay, Kevin Pursglove, he thinks that people really enjoy the experience of the shopping bazaar. He also thinks that the buyers are enjoying the hunt and the competition of the bidding process. Everybody likes to get a bargain and they would like to negotiate a little bit over the price. So eBay auction format can allows users to do so.
Furthermore, the great majority of people who are selling on eBay are really warm, decent, trustworthy and honest people. Therefore, a lot of people would like to do transactions at eBay. eBay also provide eBay security centre and Pay Pal system to ensure all the transactions are in the safety condition. Other than that, eBay might be the first example where a commerce site has actually been built around a society where people exchanging information and also goods, services and merchandise.
references:

The history and evolution of E-commerce

Introduction to the History of E-commerce

By definition, e-commerce means the buying or selling of goods and services over the Internet. From the research we found that there are 66 percent of the adults online have purchased something over the Internet, whether it's books, shoes but the the number of adults who participate in e-commerce jumps to 93 percent if we extend e-commerce's definition to include researching products and services online without buying anything, or bidding on an online auction but not winning.Even with a slumping global economy, online retail sales continue to rise. According to recent forecasts by Forrester Research, online retail sales will increase 17 percent in 2008 to reach an annual total of $204 billion, with the biggest sellers being clothing, computers and cars.

The evolution of E-commerce

As far back as the 1960s, businesses were using primitive computer networks to conduct electronic transactions.Using something called Electronic Data Interchange (EDI), a company's computer system could share business documents -- invoices, order forms, shipping confirmation with another company's computer. In the beginning, each company had its own standards for formatting these documents.

But in 1979, the American National Standards Institute (ANSI) came up with something called ASC X12, a universal standard for sharing business documents over electronic networks.

By the early 1980s, individual computer users -- still mostly at major research universities -- were sending e-mails, participating in listservs and newsgroups, and sharing documents over networks like BITNET and USENET.

CompuServe was one of the first popular networking services for home PC users, providing tools like e-mail, message boards and chat rooms. In the mid-1980s, Compuserve added a service called the Electronic Mall, where users could purchase items directly from 110 online merchants .While the Electronic Mall wasn't a huge success, it was one of the first examples of e-commerce as we know it today.

In 1990, a researcher named Tim Berners-Lee at the European Organization for Nuclear Research (CERN, from its French name) proposed a hypertext-based web of information that a user could navigate using a simple interface called a browser. He called it the "WorldWideWeb". And in 1991, the National Science Foundation lifted a ban on commercial businesses operating over the Internet, paving the way for Web-based e-commerce.

In 1993, Marc Andreesen at the National Center for Supercomputing Applications (NCSA) introduced the first widely distributed Web browser called Mosaic. Netscape 1.0's release in 1994 included an important security protocol called Secure Socket Layer (SSL) that encrypted messages on both the sending and receiving side of an online transaction. SSL ensured that personal information like names, addresses and credit card numbers could be encrypted as they passed over the Internet.

In 1994 and 1995, the first third-party services for processing online credit card sales began to appear.First Virtual and CyberCash were two of the most popular. Also in 1995, a company called Verisign began developing digital IDs, or certificates, that verified the identity of online businesses. Soon, Verisign switched its focus to certifying that a Web site's e-commerce servers were properly encrypted and secure.

The two most successful e-commerce merchant

In July 1995, Jeff Bezos boxed up the first book ever sold on Amazon.com from his Seattle garage. Within its first 30 days of business, the self-proclaimed "Earth's largest bookstore" sold books to online shoppers in all 50 U.S. states and 45 countries.With Amazon, Bezos tapped into a powerful new e-commerce market. Amazon went public in 1997, and as the dot-com boom reached its pinnacle in 1999, Bezos was named Time's "Person of the Year." Amazon has expanded its offerings beyond books. It currently offers music, movies, electronics, toys, home and garden equipment, clothing, jewelry, video games and digital downloads.

Pierre Omidyar, a software programmer, started coding a simple Web site he called AuctionWeb. Omidyar was curious if people would use the Internet to bid on each other's used items. Looking around for something to sell, Omidyar picked up a broken laser pointer. Within a day, it had sold for $14.83. Omidyar e-mailed the buyer to make sure the guy knew it was broken. The buyer's response? "I'm a collector of broken laser pointers". Welcome to eBay.

eBay leveled the e-commerce playing field. You didn't have to be a Web entrepreneur or an existing business to sell things online. All you had to do was raid your attic, post a listing, and there was a good chance that someone, somewhere, would pay money for your old junk. In 1996, with two full-time employees, eBay sold $7.2 million worth of goods. By 1997, with the help of a Beanie Babies frenzy, eBay sold $95 million in goods. In 2007, eBay sold $52.5 billion in auctions, had more than 220 million registered users and 13,000 employees.

Both eBay and Amazon paved the way for today's e-commerce merchant. Consumers can buy almost anything online, including shoes, home goods and even a real shark's tooth. Just type "unusual items for sale" in a search engine, and see what comes up.

http://www.amazon.com/
http://www.ebay.com/
http://communication.howstuffworks.com
http://www.muslim-programers.com

How E-Commerce can reduce cycle time, improve employees’ empowerment and facilitate customer support




Electronic commerce on the Internet -- e-commerce, for short -- may not revolutionize the petroleum industry. But it's already changing the way the industry does business.

E-Commerce is basically an electronic system that enables all the suppliers, manufacturers or even the consumers to sell or purchase the products or services through a convenient ways. Besides that, they also can communicate through this web site.




Cycle time is the total time from the beginning to the end of your process, as defined by you and your customer. Cycle time includes process time, during which a unit is acted upon to bring it closer to an output, and delay time, during which a unit of work is spent waiting to take the next action. E-commerce can reduce cycle time by eliminating the time taken to process in between supplier, intermediaries and customers. Through e-commerce, the customer can directly order the material needed no matter in what time zone and wherever they are with an access to the internet, because the e-commerce website is operate 7-24-365, hence the customer no need to wait until the shop is operate. E-commerce reduces time taken from shipping, inventory level, it also shortens the time taken to verify registration, account entry and transaction authorization.



E-commerce can improve employees' empowerment. Employee empowerment can be described as giving employees’ responsibility and authority to make decisions about their work without supervisory approval. Since internet is growing rapidly nowadays, employees can access to internet conveniently to search the information that they required so as enable them to make decision about their job. In other ways, employee can work from anywhere at any time whenever they like. This is because through accessing the internet they can do everything online. It is more flexibility to employee. Productivity eventually increases in these circumstances.



Moreover, customer demands are improving from days to days. Traditional ways of doing business seem not really applicable for the current situation. They required for more sophisticate and efficiency ways of dealing with their daily demand. E-commerce is a way where the firm can fulfill every customer with their different demands and requirements. Nowadays, everyone is more emphasizing on the quality of services than the physical product. This is because the customer is willing to have a better service than have a bad service. Ordinary customer required more than what the web page provide, they required immediate response for their request. For examples, FedEx and other shippers allow customers to trace the status of their packages. Using Customer relationship management (CRM) methods, customers can order online more easily, check their orders and accounts, and collaborate with the company better.



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