D2D - Dinosaur to Dynamo: How 20 Established Companies are winning in the New Economy
Editorial Reviews
Review
Books about e-business have proliferated over the last year. Undeterred by the dot-com crash and financial travails of many Internet companies, business publishers have turned to churning out an ever-widening array of guides to help well-established companies prosper on the Web. Unlike Amazon.com, its famous competitor, Powell's makes money online (and has done so from Day 1). Its annual sales volume of $232,000 per online employee is higher than Amazon's. And what happens to books that customers return to Amazon? Powell's buys them, at nearly 80 percent off the cover price. Further afield, Tesco, the huge supermarket chain in Britain, has become a leading Internet grocery by tying its Web delivery service to its local stores. Snap-on, of Kenosha, Wis., sells high-quality tools for auto mechanics through 6,000 franchisees who drive its distinctive white vans; the company solved its "channel conflicts" by paying franchisees for Internet sales as though they had made the sales themselves. DoveBid, an $80 million appraiser and auctioneer of used business and industrial equipment, has pioneered simultaneous live and Web auctions. Like a baseball scout who prefers the honesty of minor league ball, Mr. Stauffer pays these less prominent players refreshing respect. Though he commonly relies on second-hand material, he is scrupulous with footnotes and credits. His judgments are not bad, and in more than half the histories he adds his own interviewing. Each chapter opens with a capsule company profile and closes with "Leader's Lessons," the author's observations. A final chapter on "what it takes to make it" is nothing out of the ordinary. Mr. Stauffer says the digital world requires a "vocal and unflagging" chief executive. He also says a company needs "bricks and clicks that don't discriminate" ? in other words, don't think of online and offline as separate markets. His other advice: provide added services and follow the rule that it's better "to be fast than to be right." The book concludes with 60 offhand homilies on e-business success. No one will accuse "D2D" of being profound. But what's not to like about an all- star team that makes room for tiny Quality Transmission Service, a $400,000, six-employee operation in Tempe, Ariz.? Its founder, Bob Jones, built a shoestring Web site that has become a model for local businesses. His "Ask Bob" feature attracts 10 or 12 questions a day. The Web site has lured customers from 35 miles away (the shop's normal reach is 10 miles) and reliably brings in two or three new customers a week- a 15 to 20 percent increase for Mr. Jones's business. The books range from simplified manuals to weighty analyses of the dynamics of e-business ventures. Here are two examples at opposite ends of the spectrum: "D2D: Dinosaur to Dynamo" by David Stauffer (John Wiley Sons, $27.95), and "Place to Space: Migrating to E- Business Models" by Peter Weill and Michael R. Vitale (Harvard Business School Press, $35). At first blush, "D2D" is a once- over-lightly account, a scissors-and-paste recycling of other books and the business press, duly footnoted, to be sure. The pages are salted with so many diverting lists, special boxes and eye-catching headlines ("Why the Web Can Be Farmer-Friendly") that the main text is an annoying weave through an obstacle course. With short paragraphs and lots of space between lines, the book cried out to be skimmed. But Mr. Stauffer, who has written books about America Online and Cisco Systems and many articles explaining how companies have adapted to the Internet, has assembled a fascinating menagerie of 20 businesses that have taken to e-business with great success. His brief histories include the obligatory e-favorites-Enron, General Electric, Charles Schwab- as well as peers like Ford Motor and Bertelsmann. But he also tells you about Snap-on Inc., DoveBid industrial auctioneers, the Antevia Inc. relocation service and Powell's Books of Portland, Ore., a thriving "independent" whose 68,000-square-foot flagship is one of the nation's largest bookstores. Powell's began in 1970, buying lightly used textbooks for next to nothing and reselling them at substantial mark-ups. Now a $36 million business, Powell's has found its Web site ideal for matching a used, rare or out-of-print title from its enormous holdings with someone, somewhere, who wants to buy it. Unlike Amazon.com, its famous competitor, Powell's makes money online (and has done so from Day 1). Its annual sales volume of $232,000 per online employee is higher than Amazon's. And what happens to books that customers return to Amazon? Powell's buys them, at nearly 80 percent off the cover price. Further afield, Tesco, the huge supermarket chain in Britain, has become a leading Internet grocery by tying its Web delivery service to its local stores. Snap-on, of Kenosha, Wis., sells high-quality tools for auto mechanics through 6,000 franchisees who drive its distinctive white vans; the company solved its "channel conflicts" by paying franchisees for Internet sales as though they had made the sales themselves. DoveBid, an $80 million appraiser and auctioneer of used business and industrial equipment, has pioneered simultaneous live and Web auctions. Like a baseball scout who prefers the honesty of minor league ball, Mr. Stauffer pays these less prominent players refreshing respect. Though he commonly relies on second-hand material, he is scrupulous with footnotes and credits. His judgments are not bad, and in more than half the histories he adds his own interviewing. Each chapter opens with a capsule company profile and closes with "Leader's Lessons," the author's observations. A final chapter on "what it takes to make it" is nothing out of the ordinary. Mr. Stauffer says the digital world requires a "vocal and unflagging" chief executive. He also says a company needs "bricks and clicks that don't discriminate" ? in other words, don't think of online and offline as separate markets. His other advice: provide added services and follow the rule that it's better "to be fast than to be right." The book concludes with 60 offhand homilies on e-business success. No one will accuse "D2D" of being profound. But what's not to like about an all- star team that makes room for tiny Quality Transmission Service, a $400,000, six-employee operation in Tempe, Ariz.? Its founder, Bob Jones, built a shoestring Web site that has become a model for local businesses. His "Ask Bob" feature attracts 10 or 12 questions a day. The Web site has lured customers from 35 miles away (the shop's normal reach is 10 miles) and reliably brings in two or three new customers a week- a 15 to 20 percent increase for Mr. Jones's business.PLACE TO SPACE," more academic than other e-biz books, offers as clear an explanation of the anatomy of e-business as one could expect. From extensive study, the authors have concluded that all e-business can be reduced to one or another of eight basic building blocks, which then combine into more complex companies, like atoms forming a molecule. Mr. Weill is director of the Center for Information Business Systems at M.I.T.; Mr. Vitale is dean and director of the Australian School of Management at Sydney. Their strength is not originality but the clarity and thoroughness of their analysis. Their eight building blocks, which they call "atomic e-business models," are already part of the digital vocabulary. The array includes direct-to-customer sales (Amazon, for instance); full-service providers (GE Supply); shared infrastructure (reservation systems); virtual communities (Motley Fool); portals, auctions and aggregators (Yahoo and eBay), and content providers (AccuWeather and Morningstar). The book devotes a methodical chapter to each, dissecting what each way of doing e-business assumes, how it works, what holds it together. A tutorial follows on infrastructure, distribution channels and market segments. The authors cover core competencies, strategic objectives and sources of value. Eventually, this extensive learning is distilled into seven pages of tables, laying bare the logic of all eight models and enumerating, say, nine factors critical to a direct-to-customer business like Amazon's or three core competencies for running a virtual community like iVillage. Some readers may like the crisp schematics that accompany the text. Others may mistake the drawings for an attack plan for multiple-warhead nuclear missiles. The schematic of an Internet-based investment business has six big arrowheads on the left, three on the right, all menacing a big black rectangle, along with smaller arrows and dotted lines. No question, this book is homework. Thankfully, the authors leaven the abstract, didactic parts of their work with abundant examples from a half-dozen cogent case studies. Among the cases are Reuters, CDNow, GE Supply and, especially interesting, Lonely Planet, the Australian publisher of travel guides for vagabonds. From one lone title 30 years ago ("Across Asia on the Cheap"), Lonely Planet has prospered to about 600 titles, 400 employees and 65 million Australian dollars (about $34 million) in revenue for 2000. Its Web site draws three million daily hits, reflecting the attraction of the Thorn Tree chat room, where travelers keep in touch and exchange tips by posting 1,500 messages a day. Lonely Planet also offers global voice mail and CitySync, a digital download of guides to major cities. It has undertaken the ambitious job of converting all its guides, maps and detailed research to accessible digital form. Even on this solid base, e-business raises tough questions for Lonely Planet. How can it make money from the two million fans of its Web site? Should it try? How should it handle "channel conflict" and balance sales from the Internet with its traditional retailers' interests? As its rule of thumb, Lonely Planet looks for some assurance that it will get a 50 percent gross margin before embarking on a new guide. The authors ask whether e-business ideas are ever firm enough to meet that hurdle. And most intriguing, the authors write that Lonely Planet has "a huge opportunity" to reinvent the travel guide by customizing digital guides to a traveler's iti...
Book Description
Will these companies be long-term winners in the 21st century? Merck-Medco - uses its supposedly burdensome infrastructure to out-perform well financed pure dot-coms in online sales. Eaton Aeroquip - employs new technologies to leverage its long-standing expertise in supply-chain management. Powell's Books - was an online success before Amazon was online at all, with profitability from the outset. Snap-on Inc. - makes its dealers the main focus of digital initiatives, providing gains to stakeholders throughout the value chain. N-Bar Land and Cattle Company - breaks out of traditional commodity-business ruts with innovative use of the Web. Inditex, SA - combines the speed and empowerment enabled by new technologies to make its products consumer sensations. Enron Corporation - examines new technological capabilities as prospective avenues to reach new markets, offer new products, or invent new services. Rosenbluth International - applies technology every way possible to elevate its people from order processors to customer advocates. iSteelAsia.com Ltd. - transforms the historic role of an intermediary to make itself an indispensable provider of added-value services. DoveBid, Inc. - melds its traditional live auctioning and wonders of the Web to produce gains for buyers, sellers, and the company itself. Cemex, SA - employs technology in cement delivery to overcome the once-intractable obstacles of traffic and weather. Antevia Inc. - enhances and extends its personal services by using the Web to succeed as a unique niche player. Charles Schwab Corporation - enjoys unprecedented success because it dropped all distinctions between online and offline customers. Tesco PLC - is the world's sole example of what pure dot-coms and established retailers have failed to become: a profitable online grocer. Office Depot - creates a virtuous cycle of mutual benefits among its store, catalog, and Web sales channels. Quality Transmission Service - demonstrates that no business is too small or too rooted to physical location to win gains from Web presence. Bertelsmann AG - shows that a company's long-standing culture can accommodate digital transformation on the strength of a CEO's persistence. Ford Motor Company - is using the Internet to revolutionize processes and structures little changed for nearly a century. Eastman Chemical Company - provides evidence that size, location, and line of business are no obstacles to determined digital initiatives. General Electric Company - went from digital noncombatant to new economy superstar in barely a year's time.
D2D - Dinosaur to Dynamo: How 20 Established Companies are winning in the New Economy
D2D - Dinosaur to Dynamo: How 20 Established Companies are winning in the New Economy,David Stauffer,David Stauffer,Capstone,1841121363,Business & Economics,Business / Economics / Finance,Business/Economics,Corporate & Business History - Strategies,Economics - General,Electronic commerce,General,Organizational change,Business & Economics / General,Economics,Industry & Industrial Studies
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