9.2 Case Studies: A Start

Not all businesses convert to ecommerce.

Peerless Dreams

Suppose you run an upmarket boutique with two staff and a part-time bookkeeper. Other local companies have a website, and some have ventured into ecommerce. Shouldn't you?

Think about it. You thrive because a. you're local, b. you know your customers well, and c. you have superb selling skills. None of that transfers to the Internet. But could an online catalog do any harm?

Most certainly. It might a. become a drain on your time and financial resources, b. provide information for your competitors, and/or c. prevent customers from dropping into your shop on the offchance of finding what they want — i.e. deprive you of selling opportunities.

Toner Supplies

You supply laser cartridges, new and replacement, to local companies. Why not set up an online ordering system, which would shop-window your service better?

Because you'd immediately be in competition with large companies supplying at discount, and would almost certainly fail. Your cheerful personality and immediate delivery is what's going for you at present, and you should stick with it.

Carefree Holidays

A third example. You're a holiday letting company with 300 properties that are currently marketed through magazine adverts, classified ads and repeat bookings/personal recommendations. Why not create an online brochure? The site build is not the big expense ($20,000) but running the site will set you back $30,000 a year, and advertising a good bit on that. Worse is the loss of contact with customers. Selling is a personal matter, and holiday-makers warm to the friendly voice over the phone backed by brochures that appear in the postbox a few days later. Yes, your own website could pay dividends in the long run, but some halfway house might be better: a simple online catalog of properties, with marketing through other holiday companies, many of which will charge $250/year for a listing. Bookings are still finalized by phone.

The cases are self-evident, but gain by looking at the business model.

All seek to use the Internet (customer channels) to more effectively target their customer segment(s). But doing so:

1. Weakens their customer relationships.
2. Exposes them to Internet competition from companies with much larger resources.
3. Drains their revenue streams.
4. Requires they make key partners of web-build companies, which was risky in the early days of ecommerce.

Questions

1. Why don't all businesses convert to ecommerce?
2. What aspects can be made clearer with business models?

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