Part Two Project Creating a New Internet Business 375

PART TWO PROJECT

Creating a New Internet Business

We have prepared a list of new businesses that could benefit 2. In what ways can the company benefit from a Web site?
from going on the Web. Select one of the businesses from the How would it provide value to the firm? What functions
list and develop an Internet strategy for that business. You should it perform for the company (marketing, sales,
will need to identify the Internet business model to be pur- customer support, internal communications, etc.)?
sued, use the Internet to research and analyze markets and 3. In what other ways might the company use the Internet
competitors, and design part of the Web site for that business. for its own benefit?
Virtual Tour of Electronic Commerce Sites 4. Prepare functional specifications for the company’s use
of the Web and the Internet. Include links to and from
To prepare for this project, review Internet business models
other sites in your design.
by taking the virtual tour of the electronic commerce sites
described in the following table. To take the tour, visit the 5. Prepare a cost-benefit analysis of a proposal to imple-
Web site representing each business model. Explore the Web ment the company’s use of the Internet.
site so that you have a clear idea of how that business uses For each of the five businesses, we list a Web site of a real-
the Web for electronic commerce. world company in the same or a related business to help you
understand that type of business. Visit the Web site related to
Selecting an Internet Business Model and the business you have selected and review it carefully.
Designing a Web Strategy
The five businesses we describe are fictitious but are based Business 1: InfoInc
on real-world scenarios. Review each of them. Then select InfoInc is a start-up company that would like to provide a
one business and answer the following questions: service by offering easy access to needed information in spe-
1. What Internet business model would be appropriate for cialized fields such as accounting, finance, or medicine.
the company to follow in creating a Web site? Although its business plan calls for moving into a number
of fields, InfoInc would like to begin by addressing the

Virtual Tour of Electronic Commerce Sites

Business Model Description Organization URL
Virtual Storefront Sells physical goods online instead of through a physical Amazon.com www.amazon.com
storefront or retail outlet. The goods are then shipped to
the customer.
Information Broker Provides primarily product, pricing, and availability Edmunds.com www.edmunds.com
information. The final purchase transaction is usually
conducted elsewhere.
Transaction Broker Provides services that allow people to complete E*TRADE www.etrade.com
transactions, such as buying and selling securities.
Online Marketplace Provides digital environment where buyers and sellers eBay www.ebay.com
can meet, search for products, display products, and
establish prices for those products. Can provide online
auctions or reverse auctions as well as negotiated or
fixed pricing.
Content Provider Creates revenue by providing digital content, such as Wall Street Journal www.wsj.com
digital news, music, photos, or video, over the Web. Interactive
Online Service Provider Provides online hardware and software services for Xdrive www.xdrive.com
individuals and businesses.
Portal Provides an initial point of entry to the Web along with Yahoo! www.yahoo.com
specialized content and other services.
Virtual Community Provides an online meeting place where people with iVillage www.ivillage.com
similar interests can communicate and find useful
information.
376 Part Two Information Technology Infrastructure

needs of people in the accounting and tax fields. Its first two tourism but it also wants to increase trade by developing
target groups are accounting professionals and the general new markets for its tropical agricultural products. In addi-
public. For the general public, the plan is to provide a Web tion, leaders hope to attract investment capital so that many
site with advice on various issues such as tax laws and IRA of the unemployed residents can find jobs. Two major air-
savings rules. The site would also contain links to other sites lines have regular flights to Columbiana, as do several small
where visitors will be able to obtain advice on such issues as Caribbean airlines. The island is on the tourist itinerary of
how to establish a new business. For accounting profession- only one cruise ship company. The Web site will not transact
als, such as certified public accountants (CPAs) and corpo- any business, but it will offer information and links to other
rate financial officers, InfoInc would like to offer more appropriate sites.
detailed information services. In addition, the company Web reference: Dominica <www.dominica.dm>
wants to provide capabilities that might help the CPAs and
financial officers manage their e-mail, voice mail, and fax. Business 4: Home Do-It-Yourself Tools Inc.
Web reference: WebMD Inc. <http://webmd.com/> As more and more people are turning to do-it-yourself
home repairs, the market for tools of all kinds for home use
Business 2: Aerospace Metal Alloys has grown rapidly. The buyer has thousands of tools to
Aerospace Metal is a distributor of exotic steel, aluminum, choose from, and so the search can be time consuming and
and titanium alloys to the aerospace industry and to other the prices paid can be very high. Home Do-It-Yourself Tools
specialty industries. These metals, such as kovar and inconel, Inc. (Home Tools) was founded to capitalize on this trend.
must meet exceptionally exacting standards because they The founder initially opened a small store in Atlanta,
become parts in airplanes, rockets, industrial furnaces, and Georgia, and soon thereafter established a catalog to try to
other high-performance products. Aerospace sells raw mate- expand the business. Home Tools uses a toll-free 800 tele-
rials produced in the form of bars, sheets, rings, and forg- phone number to take orders and to answer potential cus-
ings. In turn, Aerospace customers use these materials to tomers’ technical and product questions. It solicits new cus-
fabricate their final products. Many Aerospace customers are tomers through advertisements in magazines read by home
actually parts suppliers to end-product assemblers such as repair enthusiasts. The owners now wants to make better use
Boeing Aircraft. Aerospace Metal maintains a sales staff to of the Internet to reach out to new customers, reduce Home
sell these metals, and the company stores its products in Tools’ cost per sale, and improve service quality. The heart of
seven warehouses throughout the country. They obtain their the business is a database listing several thousand tools and
products from steel and metal manufacturers throughout the tasks for which they are commonly used.
North America. If a customer requests a product not carried Web reference: iGo.com <www.igo.com>
by Aerospace, the company will special-order it from an
appropriate supplier. Business 5: Low Cost Tires Inc.
Web reference: Specialty Steel and Storage <www. Low Cost Tires Inc. (Tires Inc.) began as a small auto repair
steelforge.com> and tire shop in a small city outside of Chicago. While the
original goal of the shop was to gain a reputation for quality
Business 3: Columbiana repair, the owner also stressed meeting customer needs on
Columbiana is a small, independent island in the Caribbean. the sale of tires. Tires Inc. carries a very wide selection of
It is underdeveloped and is also off the tourist path for most tires so that customers can always be served on the spot. Its
visitors to that area despite its many attractions. The island staff is highly trained and very knowledgeable about tires.
has a unique history, with Indian ruins dating back 800 years Selling tires has turned out to be more profitable than auto
and with many historical buildings, forts, and other sites repairs. Although the owner plans to maintain the auto
built during its centuries as a British colony. A few first-class repair business, he wants to use the Internet to expand tire
hotels have been built along some of its beautiful white sales and to capitalize on his staff ’s understanding of cus-
beaches, and less expensive accommodations are also avail- tomer needs. Management believes the correct Web strategy
able along beaches, in several towns, and near several fishing could help Tires Inc. improve customer service locally,
villages. Its rain forests, rivers, striking mountains, and vol- increase its customer base, and help it create retail outlets in
cano cone all could be of interest to tourists. In addition, it new locations.
has many restaurants that specialize in native dishes and Web reference: The Luggage Factory <www.
fresh fish. The government not only wants to increase luggagefactoryoutlet.com>
PA R T T H R E E

Organizational and
Management Support
Systems for the Digital Firm
Chapter 11 Chapter 13
Enterprise Applications and Business Enhancing Decision Making for the
Process Integration Digital Firm
Chapter 12
Managing Knowledge in the
Digital Firm

Part Three Project: Designing

an Enterprise Information Portal

Part Three describes the role of information systems in enhancing business processes and deci-
sion making across the enterprise. Chapters 11 and 12 are devoted to the major enterprise appli-
cations for digital integration: enterprise systems and systems for supply chain management,
customer relationship management, and knowledge management. This part also describes busi-
ness intelligence, decision-support and executive support systems that improve firm perfor-
mance and business value by helping managers and employees make better decisions.