Business and the Internet
This collection is designed to acquaint managers with the opportunities and risks of electronic commerce. The readings offer frameworks and perspectives that managers will find useful as they assess the unique business opportunities the Internet provides. As part of the Business Fundamentals series, it contains materials used in Harvard Business School’s MBA and executive education programmes.
The collection includes the following items: Internet-based Electronic Commerce in 1997: A Primer by Robert A. Burgleman; Electronic Commerce: Trends and Opportunities by Lynda M. Applegate and Janis L. Gogan; Note on Marketing and the World Wide Web by John Deighton; Making Business Sense of the Internet by Shikhar Ghosh; Dell Online by V. Kasturi Rangan; and Virtual Vineyards by Jeffrey F. Rayport and Alvin J. Silk.
Harvard Business Review
Managing in the New Economy
To help readers make sense of the managerial agenda in the emerging new economy, Joan Magretta selects some of the most perceptive articles and interviews from the Harvard Business Review in a collection that helps us sort out what’s truly new about the new economy and what endures from the old. The articles are organised around important managerial issues, revealing how the dynamics shaping the new economy are changing both managers’ priorities and the tools they use to make decisions. Part I addresses the principal issues of strategy, analysis, and competition. In Part II, Magretta turns our attention to the leadership and organisational demands that managers face daily in the knowledge economy. Part III brings these themes to life as three CEOs describe how their organisations are tackling the challenges of managing in the new economy.
With contributors like Michael Porter, C K Prahalad, Peter Drucker and business leader Michael Dell, this invaluable collection explores the new mindset executives in every industry must embrace in order to keep pace with the trends in technology, networks, knowledge, and globalisation that are shaping the new economy.
Harvard Business Review
The Little Airline That Could
The regional carrier sells more tickets online than any other airline. What’s its secret?
Southwest Airlines, the number seven carrier that made its name flying short hops between places like Corpus Christi, El Paso and Lubbock, Texas, has become the biggest airline on the web.
Southwest announced last week that almost 20 percent of its ticket sales in 1999 – $846m – came from purchases made over the Net. By comparison, United, the world’s largest airline, sold $500m in tickets online in 1999, even though its $18bn in total revenues was almost four times that of Southwest.Heralding the news, Southwest chairman Herb Kelleher issued a bold prediction: Southwest will sell more than $1bn in tickets over the Internet in 2000.
United is predicting $1bn in online bookings this year, but only Southwest posted a quarter that makes its prediction credible. In fourth-quarter 1999, Southwest’s online bookings exceeded $250m, or 27 percent of its revenue. United refuses to release its fourth-quarter Net bookings, but it would have needed to sell half of its year’s total in that quarter to equal Southwest’s, and that’s unlikely. The Standard
Relationships and the single customer
This article is based in part on the book Relationship Marketing – New Strategies, Techniques and Technologies to Win the Customers You Want and Keep Them Forever, by Ian Gordon, published by John Wiley & Sons, January, 1998.
Relationship marketing is a widely used term. Often, though, it is used interchangeably with terms such as customer loyalty, database marketing, predictive modelling, data warehousing, one-to-one marketing, relationship selling, retention, mass customisation, customer intimacy or customer bonding. While relationship marketing includes these practices, it is more. Much more. A company using database marketing, for example, as its relationship marketing approach may find itself no more able to forge deeper bonding with customers than previously, with mass marketing or market segmentation techniques. CRM Central
European CRM Methodology
A 22 percent turnover increase with no increase in marketing costs. A decrease in customer defection rates. Twice as many customers who are highly satisfied with sales and service contacts. Measurably more teamwork and customer orientation among your managers and staff.
Would you have been happy with these results? If so, you will want to know more about the CRM methodology called Customer Marketing. Because these were the key results of a pilot project, sponsored by the European Commission, to evaluate Customer Marketing’s effectiveness in different European cultures. The Customer Marketing methodology was first developed in the early ’90s by Jay Curry and his Amsterdam-based consultancy company, MSP Associates. Curry’s book on Customer Marketing has been published in the Netherlands, UK, France, Germany Italy and Portugal.
Does ERP build a better business?
Earthgrains is a $1.9bn bakery products company that was formerly a subsidiary of Anheuser-Busch. Since its spin-off from the beer giant in March 1996, Earthgrains has been a publicly traded company whose stock has appreciated more than 200 percent. CIO magazine takes a look at the impact ERP made on the operation.CIO magazine
Dell case study
The world changed for Dell in April 1997. Sure, Dell had been a very successful computer system maker before that. Its direct sales model was successful enough up to that point to have helped it inch ahead of rival IBM into third place in US PC sales behind Packard Bell NEC and juggernaut leader Compaq. Dell had also just counted profits of $518m for its most recent fiscal year and its forecasts were absolutely rosy. And yet, third place just didn’t have a very satisfying ring to it.
So, after poring over projected forecasts and holding many high-level strategic planning discussions, Dell decided to change the way it made PCs. “Our projections showed a dramatic increase in demand,” says Terry Kelley, vice president of Worldwide Operations I/T at Dell. “We could have tried to build more factories to keep up, but it would have been very expensive and difficult to do. We decided instead to make some fundamental changes in how we built the machines.” CIO magazine
Telecoms STK vs WAP: Industry Battle or Peaceful Coexistence?
Looking to data and Internet services as the foundation for future revenues, mobile operators have seized upon wireless application protocol (WAP) as a key technology enabling this vision. As WAP services are rolled out, some commentators are beginning to question the future of WAP’s forerunner – SIM application toolkit (STK) – a technology long promoted by the smart card industry as the solution for mobile information services.
The advent of WAP will clearly bring about radical change for all players in the mobile services arena, including the smart and SIM card manufacturers.
While some observers claim WAP will spell the end of STK technology – one senior executive with a major mobile operator has even gone so far as to pronounce smart card vendors to be “dead ducks” – others disagree. Instead they argue that WAP and SIM-oriented approaches to providing mobile data and Internet services each have their own advantages, making them useful for different purposes. What is more, collaboration is on the horizon with significant efforts being made within the WAP Forum to build synergies between the two.
But these developments are also symptomatic of a wider trend hitting the smart card industry – the rise of the Internet and IP technologies and telecoms’ move away from propriety solutions to open de facto standards.
The smart card sector, traditionally based on closed systems is responding, promoting not only interworking with WAP itself, but also flexibility and interoperability for the smart card sector as a whole. Telecommunications Online
The Convergence Question
Fixed and mobile convergence (FMC) remains a goal for many operators and service providers, and developments on the technical front are rapidly making this a distinct possibility. But rather than concentrating on networks, products and terminals to create a FMC strategy, there are some in the industry who argue it is actually the packaging that counts.
Why has no European telecoms operator yet delivered a truly converged fixed and mobile service? The existing PTTs’ huge customer bases and the public’s seemingly insatiable demand for mobile communication suggests there is fertile ground for the concept of a seamless service offered by one provider for voice and eventually information and video services.
Exasperated by different bills and countless tariffs, customers yearn for one point of contact for services, delivery and charging – one provider that can make it all a little simpler. This, however, requires a key challenge to be met – shaking-off the legacy of different telecom technologies and networks, and more importantly, unifying services around a single customer-oriented brand.
Hyping up the Wireless LAN
As the wireless LAN market begins to hot up, equipment vendors are looking to the future and what promises to be a significant milestone for the wireless Local Area Network (LAN) industry. HiperLAN/2 is being promoted as the next-step platform on which operators, service providers and ISPs can offer high-speed communication services. An increase in speeds from 11 Mbps to 54 Mbps, support for quality of service and its associated potential for running voice applications, plus interoperability with third generation cellular networks, are being touted as HiperLAN/2’s major selling points.
Up until now, wireless networking has been more or less synonymous with wide area cellular networks based on different standards, e.g. GSM, AMPS, etc. They have been defined with the main purpose of supporting voice, although some also offer datacom services at very low speeds (~10 kbps).
Wireless datacom services offering the throughput necessary to meet the actual requirements for Internet and intranet access are now about to hit the market on a broader scale. In the local area network (LAN) environment, wireless LAN (WLAN) products based on different flavours of the 802.11 standard are available from a range of vendors.
Depending on transmission schemes, these products can offer bandwidths ranging from about 1 Mbps up to 11 Mbps. Prices are expected to fall, making the WLAN approach an increasingly serious alternative to fixed Ethernet access. In the wide area, general packet radio services are set to become available from cellular operators this year, and will increase the available bandwidth to a user up to about 64 kbps, making wireless datacom services comparable to dial-up offerings.
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