Authors:Reviewers: bcPoint of View Created: June 1999Heidi Locke SimonLangston JonesJeffrey KuoDavid SandersonEmma GrayAaron CherisbcPoint of ViewE Commerce Toolkit2PointofViewWhat impact is the Internet having?How will the Internet affect my business?What should we be doing to respond?What are the keys to success?Executives across the board are posing four fundamental questions:OverviewBains Point of ViewbcPoint of ViewE Commerce Toolkit3PointofViewAgendaInternet Impact DetailBusiness Impact DetailResponse AlternativesKey Success Factors bcPoint of ViewE Commerce Toolkit4PointofViewThe Internet is a major discontinuity that will redefine the strategic landscape in every industry.Defining characteristics of the Internet create a truly unique user experienceUbiquitous reachDramatically lower cost interactionComplete, symmetrical, “free” informationThese result in dramatic changes across company relationships with customers, suppliers, employees and other stakeholdersRedefinition of entire user experienceNew channel to capture growth opportunitiesElectronic management of upstream supply chain relationshipsTight linkage of end-user demand to company operationsRedeployment of physical and human resources to facilitate dramatic productivity improvementOverview (1 of 2)Internet Impact DetailbcPoint of ViewE Commerce Toolkit5PointofViewThe Internet is a major discontinuity.The stakes are high for shareholder wealth creationOver the past three years, a small group of Internet companies have created more value than any other industry achieved over ten yearsThe Internet is a dynamic medium, and further significant shifts have yet to play outDramatically enhanced network performanceHigh speed access widely availableNew demographic wavesNew specialized (non-PC) access devices and new access business modelsValue added reintermediationIntegration of physical and electronic participationOverview (2 of 2)Internet Impact DetailbcPoint of ViewE Commerce Toolkit6PointofViewThe Internet will redefine the strategic landscape in every industry.Product customization/qualityGeographic proximityMechanical innovationTransportation infrastructureScale economiesMass marketingUbiquitous reach to all stakeholdersDramatically lower cost interactionsComplete, symmetric, “free” informationWell ordered, multi-tiered distributionEfficient, optimized physical touch relationshipsTruly unique user experience-deeper customer relationships-broader reachComplete restructuring of industry supply chainsLower cost and enhanced productivityCraft Based EconomyIndustrial RevolutionMass ProductionInternet / Information RevolutionSuppliersDIstrIbutorsManufacturingResellersCustomersInternet RevolutionInternet Impact DetailbcPoint of ViewE Commerce Toolkit7PointofViewInternet CharacteristicsDefining characteristics of this new communications medium are redefining all companies stakeholder interactions.Example Implications:DramaticallyLower Cost InteractionKey Characteristics:Anyone, anytime, anywhere interactionSubstitutes high cost human for low cost electronic interactionFrictionless information exchangeUniversal accessLow cost/high bandwidth infrastructurePower shifts to buyers through pricing, inventory and other information visibilityTargeted segmentation enables “customer” level customization and profit measurementInternet Global Communications MediumComplete, Symmetrical, “Free” Information AvailabilityReduces number of “touches” in each interactionEliminates industry and organizational layersProvides access to new customer segments, broader supplier base and increased pool of employeesCreates foundation for strengthening relationships and improving effectiveness with customers, suppliers and employeesUbiquitous ReachInternet Impact DetailbcPoint of ViewE Commerce Toolkit8PointofViewImpact OverviewSupply Chain IntegrationRedeployment of physical and human resources to facilitate dramatic productivity improvements-better stakeholder communication-knowledge sharing and collaborative work environments-leverage of IT investments-enhanced access to employees/outsourcingElectronic management of upstream supply chain relationships-vendor selection and negotiation-billing and payment-information exchangeTight linkage of end-user demand to inventory, R&D, and manufacturingRedefinition of entire customer experience-complete, frictionless information exchange-differentiated experience-user controlled fulfillment tracking-targeted loyalty programsNew channel to capture growth opportunities-increased customer access-access to product adjacencies/cross selling-integration with physical worldThese result in dramatic changes across company relationships with customers, suppliers, employees and other stakeholders.Customer Relationship ManagementInternal Business ManagementInternet Impact DetailbcPoint of ViewE Commerce Toolkit9PointofViewCustomer Relationship Management (CRM) EvolutionDescription:Multi-tiered distribution modelMass marketingLimited inventoryFew value