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An analysis of the dot-com failures and an application of their strengths / by Kevin A. Haen and Scott A. Roehrborn.

by Haen, Kevin A., Roehrborn, Scott A.

Internet marketing -- Management

Computer industry -- Management

Electronic commerce -- Management.

Business failures

viii, 153 leaves : ill. ; 29 cm.

Advisor: Kimbel Nap.

Committee members: Gene Wright, Dr. Bruce Thompson.

Research -- Business plan -- Analysis of MagicalWedding.com business model -- Glossary -- Bibliography.

In the mid 1990s, a revolution began as business leaders recognized the potential ability of the Internet's World Wide Web in conducting electronic commerce transactions. However, just several years after the dot-com euphoria started, the dot-com crash began, as investors demanded that management return to the "old economy" focus on profits. By 2000, the dot-com collapse reached massive proportions with widespread consolidation among e-commerce companies, and bankruptcy was common. Several recurring themes, including intense competition, lack of capital, and simply unworkable business models, appear to be the basis for many of the failures of the founding dot-com businesses. The failed dot-coms all had a common theme in that they all promised to revolutionize the buying habits of society. Companies such as etoys, Pets, and Fumiture.com had widely recognized brand names but still were unable to succeed.

The dot-com euphoria of the late 1990s has now been replaced by concern over exactly how the Internet can successfully be used for business. Brick-and-mortar companies are working to integrate the Internet into their businesses in ways that will be profitable in the future. Because the Internet can be utilized in a broad range of areas, companies must determine exactly which facets they want to benefit from. The challenge is determining which facets of the Internet can be utilized to add value and enhance company competitiveness. This includes developing the necessary marketing and customer strategies. These areas are critical to success because companies need to determine what markets they would like to serve, and then attract and retain customers. The abundance of dot-com failures should not be used to dismiss the potential of the Internet for business applications. Businesses and consumers still want and need technology and the Internet. Companies such as Amazon.com, Charles Schwab & Company, and numerous other smaller niche businesses have all demonstrated that the Internet can be utilized successfully.

While the dot-com explosion may be over, a new generation of e-commerce companies is emerging. Now, companies in every industry are finding ways to utilize and leverage the Internet in all aspects of their operations. The distinction between old economy and new economy companies has been decreasing and this trend will likely continue. Whereas people initially predicted the Internet would reshape the U.S. economy, what is actually happening is that the economy is determining the final "shape" of the Internet. Now, it looks like the Internet is more suitable for extending and complimenting existing businesses, rather than as a replacement for them. Instead of being an entirely new business sector, the Internet is being viewed as a technology, and traditional companies are benefiting from the skills developed by the failed dot-coms.

The methodology and strategic steps taken by successful dot-coms was used to develop a business plan for a proposed dot-com startup company, MagicalWedding.com. MagicalWedding.com is an Internet start-up company offering a complete source of wedding related information to consumers. Currently being developed by a creative design team, this Internet web site will allow consumers to do their wedding shopping and planning quickly and easily, from their own home. Detailed information on products and services offered by businesses will be displayed in an attractive and easy to navigate fonnat. Additional tools such as a guest list manager, budget calculator, planning calendar, and e-mail reminders will also be provided free of charge. This will allow consumers to make virtually all of their wedding plans without visiting every business.

MagicalWedding.com has a key competitive advantage in that it will provide the only collection of businesses serving the wedding industry in this area. Nothing else like it currently exists. By defining a new market and offering services at a price that beats any other form of advertising, a significant number of businesses will be attracted to advertise on the web site. This client base, along with the MagicalWedding.com name recognition, will provide a huge barrier to entry .

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