Saturday, January 31, 2009

An example of an E-commerce success and its causes


Since 1995, JobStreet.com has grown to become one of the leading Internet Recruitment websites in the Asia-Pacific, revolutionizing the way recruitment is done today. JobStreet.com offers a comprehensive suite of interactive recruitment services. International and local Asian corporations recruit from JobStreet.com's ever-increasing pool of top talent and manage their recruitment process through uniquely developed software applications via the Internet.

Mark Chang founded JobStreet.com in 1997 with primary objective to provide Malaysians studying overseas with a platform to find job opportunities back in Malaysia. His earlier days of serious involvement in IT development started 2 years before that with the inception of MOL or Malaysia Online that promotes various applications for the younger generation of Malaysians. Mark sold MOL to Berjaya’s Vincent Tan to pursue his dream building JobStreet, with MOL eventually made name as the first online company in Malaysia listed in the public exchange.

The main idea of JobStreet.com is to provide a breakthrough channel and platform to both employers and job seekers, which for so long had been dominated by traditional newspaper advertising and classified.

Jobstreeet.com success factors:
1. Jobstreet create a more affordable advertising solutions to the customers, at the same providing a host of other benefits that include easier processing of candidates and faster work turnaround and process.
2. The online job processing features allow the employer to better manage and measure the effectiveness of each job posting. Mark wanted to harness the power of the internet and make it a tool that would completely revolutionize the recruitment process.
3. JobStreet aimed to change that by introducing a seamless process, which is done in the virtual world and does not require any paper. Traditionally, when looking for jobs, job seekers would have to painstakingly skim through the job sections in the newspapers, write and print their resume, mail their application and wait forever for a call or reply, if any.

Wednesday, January 28, 2009

Dell Computer Corp.: Failure in B2B E-Commerce Strategy


Dell Computer Corporation is one of the largest firms consisting of approximately 30,000 employees. They are located throughout the United States, containing high top quality supplies and security services. In order for a large company like Dell to grow with all the competitors in the industry, the organization must be willing to take chances, to expand the corporation. However, the risk a company chooses to take can either be detrimental or beneficial (www.dell.com).

Dell’s success over the years has caused concern for the future of the young company. Dell’s business-to-business (B2B) exchange failed for a number of reasons. The primary reason is the lack of insight in the research and development area. A lack of knowledge in this area proved to be detrimental because the company was unprepared for the lack of cooperation that other businesses showed in this new idea. “Some observers reckon that Dell’s strong name and recognition may have worked against it, causing the company to be viewed as purely a computer manufacturer rather than a site also for alternative business products” (Opinion Wire. 8 February 2001. www.serverworldmagazine.com).

Even though the business-to-business sounded like a great new opportunity, Dell jumped too quickly at the new idea. The computer industry is extremely competitive with several B2B exchanges taking place on the Web; only the strongest will survive. Dell and Ariba Inc. set up a B2B Marketplace hoping to allow online consumer sales to flourish. The suppliers include 3M, Motorola, and Pitney Bowes (O’Brien, p.77). This electronic marketplace would serve as a new way to easily obtain high quality products and have them readily available for sale. Their opportunist attitude towards company strategies left them with an unsuccessful venture. In turn Dell would not be the top choice for consumers. Therefore, in early January 2001, “A Dell representative said the computer maker closed the B2B exchange because of a lack of demand and unwillingness of customers to participate” (www.zdnet.co.uk).

Beginning the business in October 2000 and ending in January 2001 gave them only a short time frame to produce a profit. We feel that Dell gave up too early in the game because their expected profits were not met. If the business allowed more time to prove itself, it might have been able to salvage some of its profits. “It is predicted that B2B electronic trade will grow to be worth trillions of dollars over the next few years” (Opinion Wire. 8 February 2001, www.serverworldmagazine.com). They should have focused on showing consumers that they are not just a PC firm. One way to do this would be to advertise the B2B and demonstrate their reliability and value of their computers. This would target their faithful customers, aiming to enhance the loyalty in the Dell brand name.

Another downfall may have been due to Dell’s choice of suppliers. 3M, Motorola, and Pitney Bowes are second-rate firms compared to companies such as Compaq, Hewlett-Packard and Gateway. Last May, these three firms joined forces and formed an Internet-based exchange. “These companies had an advantage over Dell because they had a broader array of established business partners and offered a wider variety of IT products” (www.zdnet.co.uk).

Choosing the best-fit match in the business world may have been difficult. Maybe if Dell incorporated smaller companies, they would have had more support and the potential for a larger growth. On the other hand, if they were to select a well-known firm, closely related to the computer industry, it could have provided consumers with a high degree of reassurance. For example, combining with Canon or Epson may have been a better B2B E-commerce strategy. These companies are closely related and can all be used with a Dell computer. We believe Dell’s best strategy would be to revaluate their suppliers. Thus we propose that Dell team up with Canon and Epson to insure and provide top quality computer/IT products.

Dell was “caught up in the hype” (O’Brien, p. 77). There is no such thing as “easy money” and with all the competition within the computer industry Dell should have thoroughly researched the positive and negative effects the corporation could receive. The B2B exchange is an opportunity for the future of the company, yet it needs to reinvest in research and development before it continues with this idea. Since other companies have been successful in this type of business, it is proven that this is a profitable business if the time and energy is invested properly. However, Dell recklessly jumped into this market and as a result failed after four months. They were not able to obtain the profits they originally predicted. Luckily Dell is a strong company and was able to survive after the loss. With the future of the B2B commerce looking very bright, it would be a good idea for Dell to continue on this project with an optimistic outlook.

E-Commerce Failure - 1-800 Music Now

1-800 MUSIC NOW was a short-lived venture by MCI Communications to open a music store operated through automated telephone prompts. It also introduced one of the first ever serious attempts at an e-commerce music store. The service was run out of MCI's Consumer Markets Headquarters offices in Arlington, Virginia (Pentagon City).

The telephone service allowed United States users who dialed the toll-free number (the last "W" in the brand name was irrelevant to the actual number; in effect, 1-800 MUSIC NO) to enter the name of a performing artist by touch-tone, then select one of that artist's albums (available on CD or cassette) from the catalog and hear clips from that album before buying by credit card. Users could sample and buy music and could shop by artist name, album name, genre, song title, Top 10 lists, etc. Once users made selections on the automated service, they were transferred to a call center where an operator established an account (for first-time buyers), collected payment and shipping information, assisted in ordering, and completed the order. Subsequent ordering could be accomplished through the automated system without human assistance.

The online service was located at http://www.1800musicnow.mci.com. It was the first to offer free music sampling for most of its catalog -- initially in RealAudio 1.0 and eventually in RealAudio 2.0. The online store shut down in early 1997.

The service began in 1995 (the same year Amazon.com opened, and three years before it started selling music) but was taken down by the end of 1996. The promotion totaled about USD$40 million (at the time, advertisements for the service were quite regularly played on MTV and advertised heavily as part of The Simpsons Homerpalooza episode); meanwhile, its top-selling CD allegedly sold only 400 copies. Ultimately, over 1 million pieces of music were sold within the year. One survey noted that many of those who called the number did not sign up to make purchases, some citing shipping fees, but most saying it was because they didn't have credit cards. (This was slightly before debit cards were widely available with checking accounts). Credit cards were required to verify the age of shoppers on the phone since it is otherwise impossible to verify identity on the phone.