Financial Express: BCG alert -- Are you a .com CEO yet?

The Indian Express

Return to Story Page
To print: Select File and then Print from your browser's menu

BCG alert -- Are you a .com CEO yet?

Anamika Rath

Mumbai, Sept 16: One in every six people shopping for a car today uses the Internet to get information or to make a purchase through the Internet broker. By the year 2000, half of US sales will be to people who used the Internet to research or buy (or lease) their cars. ``That is the power of the Internet; that is the power of e-commerce,'' says Boston Consulting Group (BCG), India's managing director Rohit Bhagat. He was outlining BCG's perspective on e-commerce at a press briefing today.

Given the scenario that the offerings in the Internet world are changing and the market is growing exponentially, companies need to develop a flexible business strategy. However, BCG cautions: Just having a Website is no big deal. There have to be transactions of buying and selling. But while companies need to gear themselves up for e-commerce, beware falling for e-comm myths:

Companies should wait before doing business on the Internet because the impact of technology and the pace of technological change isunpredictable;

Only certain products can be marketed and sold on the Internet;

E-commerce will be a zero-sum game;

All goods and services offered on-line will become commodities, and;

On-line commerce and off-line commerce are separate worlds.

These myths have to be debunked, believes BCG. For example, on-line and off-line commerce will go hand in hand. But care will have to be taken that existing retailers are not offended. Instead they will need to be kept involved with the Net transactions by either giving a margin for each sale or empowering them with a particular responsibility only -- perhaps, after sales service in the white goods industry.

Eventually, the business model is going to be such that e-commerce will become the platform for all business divisions in a particular company. As e-comm continues to gain ground, the best strategies will aim to fill a latent consumer need-it could be a need for convenience, or a more customised product, or more choice.

Of course,venturing onto the Internet, like entering any new business, is a process with multiple stages, each with its own pitfalls. The most common traps according to BCG are: Failure to do essential analytical homework; insufficient breadth of vision with respect to potential e-commerce concepts; delayed attention to fulfillment and customer service; inadequate leveraging of core strengths; organizational inflexibility and too little focus on partnering; and failure to build in an aggressive `redefine' stage.

So what can a CEO on the threshold of e-comm do? Recommends BCG: Don't dabble, respond strategically. Move early and fast to position your brand. Exploit e-channel chaos. Partner aggressively. And of course, that old chestnut: confront the cultural and organisational issues.

Net Express

------------------------------------------------------------

This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.

------------------------------------------------------------