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The authors tell us that the purpose of the book is to answer this question: "What can business do -- and do now -- to set priorities and competitive direction for being on the Web so as to provide value to customers and generate profits at the same time?" In answering this question, they have a point of view. "It's not transactions or price that create the value that gets customers coming back to a seller. It's relationships, collaboration, and community."
This book is for people who have not thought about what elements must be present in a an e-business model in order to ensure profitability, sustainability, and success. If you company is starting its first e-business initiative, this book could save you some lost time and money.
If you have done this thinking, chances are that you will not learn much from this book. I found no concepts that I had not read in at least 5 other books about e-business success. The microeconomic analysis of creating a profitable business over time was also incomplete in that it did not pay enough attention to the role of speeding up progress, reducing start-up losses, and creating permanent advantages. I graded the book down one star for these missing elements.
The book focuses on six areas for progress (value drivers, in the parlance of the book), and provides an imperative for each:
1. Relationships (cultivate your long-term customer relationships)
2. Logistics (perfect your logistics)
3. Branding (build a power brand)
4. Channels (harmonize your channels on behalf of the customer)
5. Intermediaries (become a value-adding intermediary or use one)
6. Financial Dynamics (transform your capital and cost situations)
Each value driver and imperative is detailed with check lists to consider and useful, contemporary examples that you can check on on the Web for yourself.
A weakness of the book is that it pushes a bit too hard on the idea of building relationships as the primary way to create profit. Certainly, relationships will always be important, but I suspect that most successes in the future will be built on superior, trustworthy service rather than on relationships per se. The book is also too quick to abandon being the low-cost provider of superior products and services as a valid, broadly-available business model. With specialization, many will be able to achieve that. Further, the book is not imaginative enough in thinking of new ways to add value to customers that cannot be done except on-line.
On the other hand, it is the best book I have read for explaining the importance of having a carefully considered e-business model, and providing a structure for examining the options.
In the final chapter, the authors look at new trends in technology (especially wireless applications) that will affect how you help customers.
The authors have excellent credentials. Nick Earle is the head of HP's E-Services.Solutions group, and Peter Keen has written widely on business and the Internet. The final chapter also draws on the thinking of Rajiv Gupta, general manager of HP's E-Speech operation. The quality of their backgrounds show in the clear articulation of their points of view and the examples they choose.
After you finish this book, ask yourself the question of how you can create advantages for your business that customers feel are very important and can never be overcome by competitors. And don't limit yourself to on-line solutions to get there. When you come up with a solution, you'll be off to a good start in creating a superior business model.
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on 26 April 2001
Marketing executives at San Francisco-based publishing house Jossey-Bass must be furious. Their plan was to promote From .com to .profit as the advice of "the man driving Internet strategy at Hewlett-Packard". But today's high-tech careers move at Internet speed, and by the time the book was published in September 2000, the man in question, Nick Earle, HP's erstwhile president of E-services Solutions, had left to join B2B software leader, Ariba. This turn of events - a clear problem for Jossey-Bass - makes the book's transparent marketing bias even more ludicrous. From the foreword by Ann Livermore, president of HP's enterprise and commercial business, to the thinly-veiled advertisement for HP's E-speak software in the book's conclusion, From .com to .profit is little more than a profile-raising exercise for Earle and his former employer. While the book concedes that "HP came dangerously close to being left behind" as far as the Internet is concerned, it steadfastly - but rather questionably - maintains that the company is now "back in the forefront".
Neither does Earle fail to lavish praise on his new employer. "Ariba's business model is superb," he remarks. He also refers to Ariba's $4 billion market capitalisation, noting, "There is plenty of wealth creation to share between Ariba founders and employees." Indeed.
Beyond the opportunities that authorship has afforded Earle, however, From .com to .profit has little to offer. The points made by Earle and co-author Peter Keen are sound enough - web businesses must collaborate closely with their trading partners and personalise their offerings to attract and retain customers - but hardly new. In fact, there is little to differentiate the book from countless other management tomes purporting to offer business executives a unique insight into how to tackle the Internet.
Perhaps most useful is Earle and Keen's discussion of what they call the six value imperatives: perfect your logistics; cultivate your long-term relationships; harmonise your channels on behalf of the customer; build a power brand; transform your capital and cost structures; become a value-adding intermediary. There is a chapter, incorporating a management action plan, devoted to each of these topics.
Still, the overall value of From .com to .profit is questionable. As the authors themselves point out, "Last year's Internet innovation soon becomes this year's conventional wisdom - a sort of e-truism - but by next year, it may well be recognised as incomplete or even wrong."
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