1996 Electronic Commerce and Marketing (formerly 15.967)

Case Study Summaries


The Consortium for Purchasing and Distribution (CPD)

This case study examines British TelecomÌs role in trying to assist the CPD, a consortium that represents purchasing departments for 1400 local governments in Southern England, with its implementation of an EDI and X.400 messaging system for its various suppliers. The CPD attempts to secure best prices and services for schools, towns, and other governmental groups on items such as paper supplies or catering services. In particular, the case study discusses the history of the CPD Project from various stakeholder perspectives, identifies the major issues surrounding the Project, and then recommends specific changes that could improve the Project's future. The problems detailed in the case revolve around 1) organizational issues such as miscommunications, and 2) technical issues like inappropriate technology. The recommendations involve 1) changes to BT's organizational structure, 2) a discussion around the appropriate backbone for EDI services (i.e., private network or internet) , and 3) BT's internet vision.

Three key conclusions are drawn in this case study: 1) technology and organizational design must be considered together if a project is to be successful, 2) EDI projects that do not have a central authority can only be successful with an internet backbone, and 3) scenario analysis can be a very useful tool in projects that involve technology.


British Telecom: The BRICC Project

This case study examines British Telecom's efforts to make the Broadband Integrated Communications for the Construction Industry project a major success within the EU. The case study provides a basic overview of the BRICC Project and its goal of making the European construction industry more efficient via computer based knowledge capture and dissemination products and services, a short history of the Project's failure, as well as some commentary on what could have been done to correct the failings. The recommendations involve 1) BT should concentrate on being a telecom firm and not a solutions provider, 2) good communications are very important to any project, and 3) expanding the marketplace may sometimes prove to be a better strategy than gaining market share.

The major conclusion from this project is: no matter how strategically important a project may be, from a technological or political perspective, a firm should only pursue those efforts that are aligned with its core competencies.


Toyota USA

This case study examines American and Japanese car manufacturers' use of the internet as a strategic communications vehicle. Specifically, the paper first provides an outline of what the major US and Japanese car manufacturers are doing on the Web, and then details Toyota USA's electronic commerce strategy, and concludes with some recommendations for improving that strategy. The case study demonstrates that most car sites are pure image home pages as opposed to commerce based sites and that some are better executed than others. The recommendations revolve around the importance of expanding the sites' features to include more information gathering and commerce capabilities, as well as the need to integrate the main Toyota Web Page to dealers' pages and other such sites.

Three key findings are stated in this paper: 1) web sites can play a strategic role in a company's marketing and sales efforts, 2) most car manufacturers' home pages are remarkably similar, and 3) tools such as the Web Presence Continuum can easily help to map out where they may exist opportunities for differentiation.


DigiCash

This case study discusses the electronic cash industry with a focus upon DigiCash. Specifically, the paper begins with a short history about DigiCash and how its particular variety of ecash works, then outlines the rest of the industry and their ideas about ecash, and concludes with the strategic challenges facing DigiCash.

The main features of this case study are its simple and straightforward explanation about a) how electronic cash works, b) the industry's history, and c) the different approaches that are now competing to become the standard for ecash.


Blockbuster Video

This case study examines the video on demand industry in general, technological trends, and how Blockbuster Video should position itself for the future. Specifically, the paper begins with a short history of Blockbuster, an overview of the industry and retail store operations, then elaborates upon the various technological trends affecting the industry, what new features and products Blockbuster has created recently, and finishes with a scenario analysis coupled with recommendations for Blockbuster. The recommendations involve an increased commitment to new media via new products and services that leverage internet based technologies, and a shift in core competencies away from basic retail to technology led delivery systems.

The authors articulate the following conclusions: 1) despite the investment in new technologies in this industry, the consumer is already quite satisfied with the current VCR based solution, 2) any launch of new products or services like video on demand will be highly dependent upon other new technologies such as broadband video maturing, and 3) Blockbuster can both prepare and help create a future where the VCR is obsolete.


EDICAT, Extended Business Communities at British Telecom

This case study examines how British Telecom created the Electronic Data Interchange Catalog, an EDI based system that attempts to streamline the exchange of goods and services between UK based purchasers and vendors. It outlines both the pros and cons of using such a system for various stakeholders, and how the notion of Extended Business Communities is affecting how BT looks at its customers. In particular, the case raises two major questions: 1) should BT be selling EDICAT to individual customers or to collections or federations of interested parties (e.g., the legal community)? and 2) is BT selling a product or a solution?

The EDICAT case addresses three areas: 1) it reveals how a new technology can force a company to truly revisit what business it is in and why, 2) it introduces the notion of community versus individual based selling, and 3) the paper underscores how the economics of any commercial enterprise can be dramatically changed by how it positions the product /service that it is providing.


PartLINK Project

This case study examines British Telecom's effort to develop and market an EDI based product that links auto parts wholesalers and retailers with manufacturers. In particular, the paper begins with a synopsis of the current state of PartLINK, the UK auto parts industry, BT's strategy in this market, and the technical process involved in PartLINK. The study then provides a history of the PartLINK and a comparison of this effort with similar American EDI tools. Finally, the paper discusses lessons learned including: 1) end user input is important in designing one's offering, 2) management plays a crucial role in a project's success, and 3) technical support is critical when a product is sold to unsophisticated consumers.

The results of this study are: 1) when developing an electronic commerce product or service, a low cost strategy is not appropriate, and 2) three key success factors exist in the EDI world - a) build commitment from at least one segment of the value chain, b) combine an easy to use product with high levels of customer support, and c) minimize the cost to the end user.


Agents, Inc.

This case study examines the current business situation facing Agents, Inc. from a market opportunity and risk perspective. Specifically, the paper provides a short introduction to collaborative filtering technology and the firm's history and business model. It then documents some potential scenarios for growth such as upgrading or proliferating its Firefly technology, becoming an ad broker or data miner, and licensing. Finally, the paper concludes with the product and industry risks associated with a duplicable technology and some recommendations.

The key finding in this case study is how collaborative filtering technology's value is only maximized if it becomes part of the infrastructure that maximizes the value of the internet. In other words, in isolation, this technology is very interesting but, in ubiquity, this technology becomes crucial.


Recreational Software Advisory Council

This case study examines the RSAC internet site rating system, the technical and political challenges facing the group, its history, and finally the major strategic issues facing the organization. Specifically, the paper discusses various revenue generation models (i.e., rating fee, subscription fee, connection fee, ads), intellectual property rights and branding, as well as international and partnering issues.

Highlights from this report include: 1) an internet rating system will come eventually but may take a long time due to technical, legal, political, and business reasons, 2) no one revenue model seems to work for the internet, and 3) the specifics idiosyncrasies of the internet (e.g., open, global, etc.) make it a difficult forum to rate.


CUC International: Shoppers Advantage

This case study examines how CUC International: Shoppers Advantage might leverage the internet to expand its business. In particular, the paper begins with a short history about CUC, then describes the Shoppers Advantage business model, and concludes with an opportunity - risk assessment for the firm about Web based offerings. The authors recommend that, although much can be gained from adding Web based capabilities to their current Shoppers Advantage service, a completely new Web based service is a potentially superior answer because it is not constrained by an older business model.

The two major conclusions in this paper are: 1) there are many easy ways to extend an already electronically based shopping service onto the internet via a traditional 4Ps for the internet methodology, and 2) duplicating a traditional business on the internet implies constraints therefore, creating an internet only solution is the right answer if one truly wants to start an internet based business.


DealerNet

This case study examines how one entrepreneur created a virtual car showroom on the internet by linking various car dealerships together under one service. Specifically, the report begins with an automotive industry scan focusing upon the dealer portion of the value chain, then documents the DealerNet business model along with a summary of its major competitors, and concludes with a set of recommendations to improve DealerNet's current competitive situation. In particular, the study finds that DealerNet is a very precarious success heavily dependent upon a strategic partner, at the mercy of search engines, and without a very sustainable business model. The authors recommend that DealerNet aggressively pursue further technologically based advantages while both expanding its service offering and increasing the involvement of its dealer partners.

Some points raised in this paper include: 1) extending a traditional business onto the internet without exploiting the technology does not provide much competitive advantage, 2) search engines and other such strategic partnerships are crucial for the success of certain types of brokerage services, and 3) a marketing presence is usually the first and one of the least value added steps most ventures pursue when establishing part of their value chain on the internet.


CUC International: Auto Vantage

This case study examines CUC's attempt to broker used car sales on the internet. The paper first provides overviews on CUC, the auto retailing industry, Auto Vantage, other competitors, and then concludes with recommendations about how Auto Vantage can best improve its current market position. In particular, the report cites the importance of being marketed effectively through search engine advertising and differentiating the offering versus competitors.

Two major insights in this paper are: 1) it is important to integrate on-line service offerings (e.g., AOL) with one's internet presence in order to best leverage one's electronic commerce positioning and 2) marketing communications on the Web is still heavily dependent upon search engine advertising.


Oasis

This case study examines a project by the Motor Industry Marketing Group and British Telecom to establish an EDI based service that makes the relationships between automobile fleet leasing companies and repair garages more efficient and economical. Specifically, the paper begins with an overview of the various stakeholders and competitors, a description of Project Oasis, and concludes with an analysis of the pros and cons of using EDI versus an internet based EDI solution. The report recommends that Oasis aggressively pursue vendors to support their EDI service first before competitors establish any true economies of scale in this market.

The two conclusions from this paper are: 1) traditional business strategies are still very appropriate for electronic commerce based markets and 2) the car servicing and leasing industries in the UK could be dramatically affected by e-commerce.