Developing online can help create business initiative

David Bicknell


European research has highlighted the differing mindsets that online start-ups and traditional corporate...

David Bicknell


European research has highlighted the differing mindsets that online start-ups and traditional corporate "bricks-and-mortar" companies adopt toward e-business.

The research, by Protege, a company that specialises in bringing US companies to Europe, examines the differences in their approach to doing business online, including strategies, management, and how they measure success.

Its results, based on replies from over 400 "heads of Internet strategy", found:

  • What matters most to Web start-ups is sales and the number of visitors

  • What matters to corporates is feedback and enquiries

  • Many Web start-ups and corporates believe themselves to be under no immediate competitive threat from each other

  • Web strategies differ materially - corporates launch Web sites for company credibility; start-ups want to establish new ways of doing business

  • Most Web start-ups, but only a minority of corporates, are involved in e-commerce

    In terms of Web-centric applications, the main application for corporates is e-mail customer service, followed by content management, which also rated highly for start-ups. But start-ups scored over corporates in their adoption of "e-commerce", cataloguing, and automatic fulfilment.

    The two also differ greatly in their perception of the most difficult problems affecting their operations. While both agree that keeping the Web site up-to-date is the most important issue, followed by user-friendliness, e-mail contacts, functionality, feedback, and dialogue and driving traffic to their site, they disagreed on the "most difficult" factor.

    Driving traffic is the biggest issue for most start-ups, yet for corporates, the big issue is keeping their sites up-to-date, followed by other problems such as getting senior management involvement, improving user-friendliness and getting feedback/dialogue.

    According to Bob Apollo, Protege's president of market development, the results, coupled with work by Clayton Christenson in a book called The Innovator's Dilemma, which looked at how companies coped with "disruptive technologies", suggests the lessons to be learned are:

  • Corporates wanting to get serious about the Web through organic growth must create independent units with Web values

  • Corporates wanting to get serious about the Web through acquisition must avoid smothering the acquisition with corporate values

  • Corporates must be prepared to cannibalise markets, business models, value chains and margins

  • Corporates and Web start-ups have much to learn from each other

    A corporate that has clearly has bitten the online bullet is Ford. It chose this week to unveil a major business-to-consumer e-commerce initiative at the Motor Show in Birmingham.

    Although the concept of being able buy your car over the Web is nothing new, Ford claims the site will offer "industry-standard leading" standards in consumer protection.

    As well as a clear code of conduct for potential customers in what they can expect from Ford, the company also plans to introduce independent, online arbitration. If a customer buys a car from Ford and is unhappy, and if Ford cannot resolve the matter to the customer's satisfaction, it will be referred to an independent arbitrator, and Ford will abide by the decision.

    Not only is the Ford initiative important from both the customer's point of view and in terms of enhancing Ford's reputation, if the idea works, you can expect others to follow suit.

    That will be good for consumer confidence, provided all sectors adopt the idea. The banks have some way to go to engender customer buying confidence, and Barclays was present at the same event at which Ford's Ian McAllister outlined the initiative. Barclays' public reputation hasn't been too hot of late. But is it bold enough to adopt an online arbitration scheme? We'll see.

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