1. Creating a Winning E-Business Second Edition
MIS/ENTR 375
Global E-Commerce
Creating a Winning E-Business Second Edition
Defining Your E-Business Idea
Chapter 2

2. Learning Objectives Identify entrepreneurial abilities
Describe the entrepreneurial process
Understand the factors affecting e-business success
Identify ways to exploit e-business advantages

3. The Entrepreneur and the Entrepreneurial Process
Assumes the risks of starting and operating his or her own business
Must be able to lead others
Must believe in his or her business idea
Must have the self-confidence to accomplish business goals

4. The Entrepreneur and the Entrepreneurial Process (continued)
E-business entrepreneur examples
Jeff Bezos, Amazon.com
Pierre Omidyar, eBay
Kelby Hagar, GroceryWorks.com and Digital Witness
Jason Zasky, Failure Magazine

5. The Entrepreneur and the Entrepreneurial Process (continued)
Entrepreneurial abilities
Leadership traits
High-energy level
Self-confidence
Organizational skills
Ability to act quickly and decisively
Independent, goal-oriented, creative, competitive

6. The Entrepreneur and the Entrepreneurial Process (continued)
Stage 1: Are you an entrepreneur?
Assess your entrepreneurial abilities
Evaluate time and effort involved in starting/running your own business
Consider the effect of the business commitment on your family life

7. The Entrepreneur and the Entrepreneurial Process (continued)
Stage 2: Buy existing business or start own business?

8. The Entrepreneur and the Entrepreneurial Process (continued)
Stage 3: For a new business startup you must
Define the business idea (Chapter 2)
Create a business plan (Chapter 3)
Determine the legal form (Chapter 3)
Secure financing (Chapter 3)

9. The Entrepreneur and the Entrepreneurial Process (continued)
Stage 4: Operate and grow your business
Select growth opportunities
Obtain additional funding
Pursue growth opportunities

10. The Entrepreneur and the Entrepreneurial Process (continued)
Stage 5: Harvest your business
Continue to operate “cash cow”
Go public
Sell the business
Liquidate the business

11. Factors Affecting E-Business Success
The network effect
Total value of a product, service, or technology grows as more and more people use it
Telephone system example
Single telephone has no value; as more people join the telephone system, the value of each telephone increases
uBid online auction site example
As more people participate, the auction site becomes more valuable to buyers and sellers

12. Factors Affecting E-Business Success (continued)
Innovative marketing ideas
Hotmail and viral marketing example
Hotmail users grew at a rapid rate because of electronic word of mouth coupled with the network effect
Electronic word of mouth or viral marketing spreads from user to user in the same way a human virus spreads from person to person

13. Factors Affecting E-Business Success (continued)
Scalability
Ability of a business to function well in the face of rapid growth
Systems and procedures meet customers needs
AllAdvantage e-business failure example
E-business idea: Paying for users to browse the Web and view advertising
Millions of customers signed on; advertisers did not
No scalability with rapid growth in customers

14. Factors Affecting E-Business Success (continued)
Ease of entry into electronic markets
Low-cost technologies make it easy to create new e-businesses
eBay and online auction example
Easy for consumers to interact at auction site
Web auction software is cheap and easy to install /maintain
E-businesses earn commissions without having to manage, warehouse, and distribute products

15. Factors Affecting E-Business Success (continued)
Ease of entry into electronic markets (continued)
Competitive barriers to overcome
Failure to secure first-mover advantage
Lack of name identification
Lack of customer loyalty

16. Factors Affecting E-Business Success (continued)
Ability to quickly adapt to marketplace changes
Rapid knowledge transfer
Need to make decisions quickly
Exploit new ideas and opportunities
Handle new challenges
Amazon.com is an example of ongoing evolution from a basic e-business idea

17. Exploiting E-Business Advantages
Expand the market
Business and consumers are no longer bound by constraints of time, space, physical location
Opportunity to reach larger market
Ticketmaster example

18. Exploiting E-Business Advantages (continued)
Acquire greater business visibility
Get business name, products, and services in front of potential customers more quickly
Auto industry example

19. Exploiting E-Business Advantages (continued)
Use power of the Internet and Web to maximize customer relationships and improve responsiveness
Create customer loyalty
Stay in touch with customer needs
Build one-on-one relationships
Provide information to enrich customers’ online experience
Southwest Airlines example

20. Exploiting E-Business Advantages (continued)
Create new products and services
Opportunities for new e-business ideas where products or services are accessed over the Web
Business software applications
Server facilities for data file backup
Legal dispute resolution
Cybersettle example
Web hosting services
Rackspace Managed Hosting example

21. Exploiting E-Business Advantages (continued)
Reduce costs of running a business
Sales and customer support costs
Transaction costs
Order handling costs
Dell Computers, Cisco Systems, and Microsoft Corporation examples