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Electronic Commerce
Feasibility Study for
ElectroMarket, Inc.
Part 2: Business Plan Evaluation
December 1998
Due to confidentiality agreements, Dan and I have decided not to share the complete evaluation of the ElectroMarket business plan online. However, we can share a little of our methodology and some of the recommendations.
Company Background: We summarized this new company's brief history (they incorporated in late 1997), including its relationship with its parent and sibling companies, staffing resources, assets, and business partners.
Business Plan Summary: We wrote a two-page summary of the main sections of the business plan: Business Objectives, Products and Services, Target Clients, and Competition. For the company's proposed products and services, we also drew out each one's revenue model.
Recommendations: It's difficult to play consultant and evaluate an actual company's business plan, knowing that the company may actually consider them -- but also exciting for us. We took this part very seriously. To help give us a frame of reference, we approached this section of our paper as if we were potential investors examining ElectroMarket's chances in Latin America. What would we we be concerned about if our money were potentially on the line? What would we want ElectroMarket to change before we invested our money in the company?
- Focus the business objectives: We would like the company to have a laser-like focus on reaching a narrowly targeted range of business objectives.
- Target the appropriate client market: The business plan document was unclear in the exact target client market the company would be pursuing. Our conversations with the company representative indicated they had better defined to whom they wanted to sell their products and services, so we would like to see them amend the business plan accordingly.
- Reevaluate the competition: Business environments based on the internet are changing at an unbelievably fast rate -- literally from moment to moment. Even though the business plan was only about 16 months old, the assessment of the competitive environment was woefully out of date. We would like the company to conduct a new, and deeper, evaluation of the competitive environment as many potential new competitors have since appeared. Dan and I identified by name five here, not including several local ones in individual countries.
- Reevaluate business partners: ElectroMarket's business model involved one of the very few remaining electronic payment schemes. (Note: It is not Millicent, which has received investments from Compaq and IBM.) Considering the rash of failures in the proprietary electronic payment schemes (First Virtual, CyberCash, etc., etc.), we would like the company to reconsider the role of proprietary electronic payment schemes vis-a-vis standard technologies (especially credit cards) in the business model.
Other Links in this Project Document
- Project Introduction
- Business Plan Evaluation (this page)
- Electronic Commerce Potential in Latin America
- Conclusion & For More Information
- Table: Factors Affecting Electronic Commerce Success
- Selected Electronic Commerce Links (In the Credits & Links section of this site)
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