1. TODAY’S CLASS 5:00-6:15 Where are we now? Business Models
6:15-6:30 Break
6:30-7:50 Group Meeting

2. Homework due next session
Prepare Case: Priceline Webhouse Club
Read two articles:
“Beyond the Exchange: The Future of B2B”
“Internet Pioneers: We have lift-off”

3. Last Class: Framing Market Opportunity
(i.e. where will the business compete)
Today: Business Models
(i.e. how will the business win)

4. Consumer Decision Process
Disposal
Loyalty
Satisfaction
Purchase Decision
Evaluation of Alternatives
Information Search
Problem - Recognition
Pre-Purchase
Purchase
Post-Purchase

5. Components of a Business Model
Value Cluster
Marketspace Offering
Resource System
Financial Model

6. Components of a Business Model
Value Cluster
Marketspace Offering
Resource System
Financial Model

7. Egg Diagram for 1-800-flowers.com
Gift reminder service
Holiday specials
Everyday celebrations suggestions
Special occasion suggestions
Ideas and Information
“Care and handling”
“Do it yourself”
Special events and educational workshops held at stores
Floral ideas
Garden ideas
Home ideas
Gift ideas
Gourmet ideas
Store locator
Recommendations by budget
Bestsellers
Flower / Gift Decision Process
Need Recognition
Product Offering
Gift Recommendations
Education on Flowers and Decoration
Search for Ideas and Offerings
Gift guru
Favorite gifts
Gift frequency
Gift impossible
Gift baskets
Corporate gift services
Post-Sale Support
Order receipt
eQ&A online customer service
FAQ
Customer service inquiry form
Post-Sale Support and Perks
Evaluation of Alternatives
Product price
Product picture
Product description
Delivery information
Delivery availability
Perks
Miles earned with flower purchases
Free gifts
Discounts at AOL & BN.com with flower purchases
Member specials
Message Selection
Purchase Decision
Shopping basket
E-commerce transaction
Special shopping features
Delivery outside US
1-800-lasfloras.com
Gizmo fully-animated greeting cards
Physical cards in gifts

8. 1-800-flowers.com Resource System
Address Book
BloomNet Network
Third-Party Contractors
Strong Distribution Network
Gift
Recommend-
ations
Fulfillment Center
Stores
Online Gift Center
Gift Reminder
Broad Assortment of Gifts
High Quality of Flowers
Rich Content
Personalization Capabilities
Popular Website
Garden Works
Integrated Partner Offers
Telephone
3,000 Affiliates
Plow & Hearth
Online
Customer Service
Widespread, Easy Access
Great Foods
Multiple Contact Points
Franchise Stores
Catalog
Technology
Strong Brand Name
Wide Reach to Customers
Customer Service Centers
= Core Benefits
Snap
Starmedia
= Activities & assets
Integrated online offline Systems
MSN
AOL
= Capabilities

9. Sawhney and Kaplan — B2B Models
Vertical Hubs
Paper
Chemicals
Plastics
Steel
Logistics Management
Media Buying
Advertising
Energy Management
Functional Hubs
Source: Adopted from Business 2.0, September 1999, page 88

10. Sources of Content Origination
RJS Model Summary
Sources of Content Origination
Single Brand
Multiple Brands
Supply Side
Demand Side
Hybrid Integrator
(Cisco.com)
Hybrid Aggregator
(Amazon.com)
Forward-Integrated Producer
(Walmart.com)
Supply-Side Aggregator
(Surplusdirect.com)
Demand-Side Aggregator
(Accompany.com)
Backward Integrated User
(Dellonline.com) - B2B
Focus of Strategy

11. Alternative Shareholder Value Model