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The Online Wine Industry

Explore the value chain and potential of e-commerce in the online wine industry. Discover the policy issues and barriers to entry that affect this market.

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The Online Wine Industry

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  1. The Online Wine Industry Abhiroop Gandhi Sudhir Gopal Maximiliano Hernandez-Toso Raghu Kakumanu Eungsang Kim

  2. The Value Chain and EC B2C B2B B2B B2B 1st Tier Domestic Wineries and importers that either produce or represent the producer 2nd Tier Wholesalers purchase wines from domestic wineries and importers 3rd Tier Retailers, restaurants` Consumer Vine B2G Regulation Authorities E-commerce could be used at different points in the in the industry value chain. We will focus in B2C possibilities

  3. Policy Issues and Barriers to Entry • Because alcohol is a state-regulated product rather than a federally regulated one, there are basically 50 different sets of laws. The only common law among the states is that wine or any alcohol must travel via the three-tier distribution system— from producer to wholesaler to retailer— before it reaches the consumer. • Impending legislation may help strengthen the market for internet wine sales.

  4. “Legislation is the major barrier for the emergence of the Amazon.Com of wine” Conclusion

  5. The Online Women’s Clothing Industry By Yucheng Hu, Yimin Jiang, Andrew Jones

  6. Firms Locations Served Eddie Bauer U.S., Canada, Japan, Germany, & U.K. Gap, Old Navy, Banana Republic U.S., Canada, France, Germany, Japan, & U.K. Land’s End U.S., & U.K. Victoria’s Secret All over U.S. J. Crew All over U.S. Esprit All over U.S. Major Players in Online Women’s Clothing

  7. Women’s Clothing • Who are the customers • Victoria’s Secret and Esprit primarily target middle and upper class women. They also try to attract male customers who are purchasing gifts for women. • Eddie Bauer, Gap, Land’s End, and J.Crew sell both men’s and women’s clothing. So their customers come from both groups. • These online clothing stores hope to take advantage of the customers they do not reach with their mall presence.

  8. Women’s Clothing • Gap’s Philosophy is “A simple formula drives our brands: We strive to deliver style, service and value to everyone—kindergartners and grandparents, students and professionals, athletes and philosophers, big-city urbanites and small-town folks.” (Source: http://www.gapinc.com/about_us/about_us.htm)

  9. The Online Flower Shopping By Ying Zhou, Yue Wu, Shan Wei, Zhao Gang Wo, Omotola Talabi

  10. Online Flower Shopping Customers: Individuals • Individuals account for the bulk of purchases in the online flower industry with male customers significantly outnumbering females. “ Survey results show that three-quarters (76 percent) of men have ordered flowers for loved ones on Valentine’s Day while nearly a third (30 percent) of women admitted giving flowers to the men in their lives.” www.ftd.com

  11. Online Flower Shopping Customers: Corporations • Corporate customers patronize online flower shops for marketing gifts. Corporations can take advantage of volume to receive discounts. “ Our corporate clients have told us they want gifts that are exclusive and that both men and women will appreciate. They must express the high standards of their company and they expect their gifts to set the stage for continued successful business partnerships.” www.callyxandcorolla.com

  12. The Online Jewelry Industry By: Emily Coyle Kevin Daily Jane Chien Isnezawati Azali Halit Akcaglayan Nadia-Shazrin Asari

  13. Market Share • In 1998, online jewelry spending was $207 million • In 2000, online jewelry sales are expected to be $370 million • Global jewelry sales are estimated at $200 billion a year • The retail jewelry market is highly fragmented

  14. 95-731: Business Strategy and Electronic Commerce The Online Mortgage Industry Homework 1 | 01-25-2000 Lisa Bembenick | Naresh Bhaskar | Joe Carlen Chad Carter | Lbujomir Cvetkovic Heinz, CMU | Spring 2000

  15. Mortgage Rate Points 30 Year Fixed 8.26 1.00 15 Year Fixed 7.86 1.00 1 Year Adjustable 6.56 1.00 Average Mortgage Rates National 1999 average mortgage rates* *Source: http://www.mortgage-net.com/trends/market/

  16. Some Sample Prices • 30-year fixed mortgage: • Today’s low rates: 7.89 (MortgageAuction)* • Rate 8.5/ Points 1/8 / APR (PNC) • Rate 8.0 / Points 0.99 / APR 8.152 (Hotloans) • 15-year fixed mortgage: • Today’s low rates: 7.67 (Mortgage Auction)* • Rate 8.0 / Points 3/8/ 8.44 (PNC) • Rate 7.625 / Points 0.99 / 7.862 APR (Hotloans) * Quotes as on 01-23-2000 on http://www.mortgageauction.com

  17. The Online Travel Industry (Airline Tickets) Adam Ratana Rohit Ravinath Thiti Wang-Aryattawanich Rubina Zaidi

  18. Industry News & Projections • Travel eCommerce is expected to reach $20 billion by 2001 (source: eMarketer) • 33.8 million travelers used the Internet for travel planning, up from 11.7 million in 1997 (eMarketer)

  19. Making money • Price and nonprice competition • What is the optimal product to offer and at what price? • Product is not just “the good”, but the entire package • Buy a book from Amazon or Shopping.com • The book is the same at the two sites • The product is not

  20. Making money • Optimal product • As Wells Fargo shows, can’t do everything • How do you decide what to do? • Differentiate product • Keep up with competitors • Lower costs

  21. Making money • At what price • Depends on supply and demand sides of equation • Cost structure • How much customers value your product • Distribution of valuations • Industry structure: number of firms, extent to which they are substitutes • Competitive, oligopoly, and monopoly models

  22. Making money • Experience goods • Anything you need to try to determine how valuable it is to you • Offer promotions, free trials, etc. to get people to try • What are some examples of information goods?

  23. Making money • At what price • Price sensitivity, distribution of valuations • Senior citizens, students • Offer the same product for different prices • What are some examples?

  24. Making money • Versioning • Dimensions: delay, interface, speed, features, etc. • How many versions should you offer? • When in doubt offer 3 • Bundling • A special form of versioning in which two or more distinct products are offered as a package at a single price

  25. Making money • Lock in (high switching costs) • Lock in makes customers less price sensitive • Something that is free today may become low cost tomorrow • Costs may rise over time • Example is me with The Street.com • Organizations want to lock in their customers • The question is how

  26. Making money • Ways to achieve lock-in • Sticky applications like email or chat • As a consumer, beware of the free • There is no free lunch • Subscription services where people have to take action to cancel • Information • Once people invest in entering it, they are less likely to switch • Loyalty programs

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