A. Relatively poor e-commerce environment
- Phobia Japanese consumers had about submitting credit card information over the Internet (Afraid of the ease with which hackers hacked into server to obtain credit card information and other personal information)Traditional: Cash-based society
§ Non-usual to see salaries paid in bank notes
§ 90% mail order sales ( by cash on delivery / bank transfer)
§ Credit card payment not popular ( ~ 10%)
§ 70% Japanese do not like use credit card
- Relatively expensive connection charge
§ Nippon Telephone & Telegraph (NTT)
à Controlled 95 per cent of Japan's telephone lines
à Government was a majority shareholder
o Since the mid-1990s, the Japanese Government had regulated companies heavily in the ecommerce sector, essentially strangling the growth of online transactions.
à Charged for connection to the Internet was considered to be high
o Charged by the minute
o Many people from browsing the Web, or staying at a Website for very long
B. End-fulfillment of online orders was a problem for many people. Most consumers were not home during the day to receive parcels they had ordered on-line.
C. Consumers were also doubtful about receiving their parcels from on-line stores, either due to mailing errors or non-fulfillment on the part of the stores.
2. Describe the proposed 7dream.com business model
Projection of Sales
Obtaining the goods directly from the warehouses of its suppliers
àwould not have to hold inventoryà not incur warehousing costs
Procedures of the system
Customers use computer, Internet-enabled cellular phones and Internet enabled multimedia kiosks to order items
Seven-Eleven transports the items to 7-Eleven distribution centers
The distribution centers transport the items to the specified store
The systems notice the customers to pick up the items.
Customers pick up and pay in the store they chose.
Target Market
a. mainly young people from their teens through their thirtiesb. which represented the generation that had taken to the Internet most enthusiastically
Business (Product)
7dream.com provides services based on the technical expertise and industry knowledge of each founding member, and offer services in 8 content areas:travel; music; photographs; merchandise; gifts; mobile phones; tickets; books; car-related items; informationThe products to be offered were especially chosen for their ease of handling
Place
Customers use computer, Internet-enabled cellular phones and Internet enabled multimedia kiosks to order items through 7dream.com
Payment and Delivery System (Price)
Option of payment:Payment at 7-Eleven storesPayment slips with bar codesAssigned payment reference numberPay by credit card over the Internet
4. Promotion
Suzuki
a) Internet-enabled multimedia kiosks in 7-Eleven stores àenable consumers who did not wish to connect to the internet at home/ did not have personal computers with Internet access to access 7dream.com
b) Wireless capabilitySubscribers access the Web via internet-enabled cellular phones Promote e-commerce in JapanUtilize other channels to market 7dream.com e.g.Digital broadcasting , television and magazines (future)
Similarity:
a) Business
The new and the traditional models provide the products which are easy to handle and small-sized products as Suzuki want to utilize the existing Seven-Eleven delivery system.
b) Target market
Resembled centres of community life in Japan
7dream.com, like the traditional 7-11 stores, also caters to local consumers because of the installation of the buying kiosks place in the 7-11's, people can pick up a meal or snack, pay for their utilities, socialize with friends and to look at the latest fashion accessories. Also, most were mainly young people from their teens to thirties.
Easy to access
This would allow customers to purchase from 7dream.com in their local store which located in a conceivable location.
c) Customer relationship
For customers unwilling to reveal their credit card numbers online, they can settle their on-line purchases at 7-Eleven store. After making a purchase at the 7dream.com Website, customers could select "Payment at a 7-Eleven store" as their payment method. 7dream.com offers the ability to interact and do the transaction face to face with the person at the counter in a 7-11 store which same as payment at the original model.
4. Identify the critical success factors of the business plan of 7dream.com. Move to next thread
- First-mover advantage
-One of the example is to move toward personal delivery at their residence. This fulfill the needs and wants of the customers.
- Joint Venture Effect
Sign contract with the heads of the several major Japanese companies,e.g. Sony and NCE etc.
- Government Support
-Enable consumers to start trading via the Internet
-Introduced competition into the telecommunications industry by splitting Nippon Telephone& Telegraph, the dominant telecommunication company, into 3 companies
- Application of information technology (POS system, 1982)
-The store can be more responsive to consumers’ shifting tastes
Increase the efficiency of Distribution system E.g. Combine products that required the same temperature range control
- Generating new needs from customer
-Overcome the buying culture of the Japanese
-Convince them that buying online is an acceptable and safe practice. Also, as mentioned above make sure that customers can rely on this method of purchasing. This can be done by making sure every order is filled on time.
