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Chapter 2 E-commerce fundamentals 53

Situation analysis The chapter starts by considering the different participants and constraints in the
Collection and review of e-commerce environment. I will show you how different information sources can be used to
information about an
organization’s external assess customer usage of different types of intermediaries. We then look at how electronic com-
environment and internal munications have facilitated restructuring of the relationships between members of the
processes and resources
in order to inform its electronic marketplace – a key feature of e-commerce. Electronic communications have also
strategies. given rise to many exciting new business and revenue models such as the companies introduced
in Table 1.1 and we investigate how the potential of these can be assessed. Throughout this
Environmental
scanning and chapter we mainly consider the sell-side elements of e-commerce rather than the e-business as a
analysis whole. This approach has been chosen since the focus is mainly on how an organization can
The process of restructure relationships on the downstream side of its supply chain. A review of the entire
continuously monitoring
the environment and supply chain is completed in Chapter 6. To conclude the chapter, we evaluate the success factors
events and responding for Internet-only businesses known as ‘pureplays’ such as those shown in Table 1.1.
accordingly.
The Real-world e-business experiences case studies show the importance of new online
intermediaries for an existing company within the financial services sector.

Real-world E-Business experiences The Econsultancy interview

1. MORE TH>N’s Roberto Hortal Munoz on comparison sites

Overview and main concepts covered
Roberto Hortal Munoz is the head of e-business at insurance company MORE TH>N.
The importance of online intermediaries and social networks in the marketplace of an
organization are reviewed in this interview. In the interview he explains his brand’s use
of comparison sites amid growing concerns in the sector over their value to brands.
We also dig into the challenge of sales attribution across different channels and the
company’s various efforts around online communities.
Q. Is the intense competition between comparison sites delivering value to
insurance providers?
Roberto Hortal, MORE TH>N: Certainly, some insurance providers are getting value
from the explosive adoption of price comparison sites. Price comparison sites change
the rules of the market quite significantly, bringing scalability into the equation.
Previously an insurer’s reach was more or less proportional to their marketing budget.
Now, we can all reach the same amount of people just by taking part in the aggregator
market. Those insurance providers that adapt quickest to the implications that a scalable
market brings will certainly extract a lot of value from this new ecosystem.
I think financial services brands could do worse than looking back to what has
happened in travel in the past few years: a wave of disintermediation [explained later
in this chapter] spawned a myriad of direct brands across the value chain, in turn
creating an ideally fragmented marketplace for aggregators to thrive in.
Some direct brands have been very successful in that environment – doing a bit of
aggregating themselves to fend off the intermediaries – while others have become util-
ities and drastically dialled down their direct distribution to cut costs and focus on their
core competencies.
The question is: What are the options that open up to insurance providers, and who
will have the courage, skills and flexibility to seize on them first?

Q. What effect are comparison sites having on your Return on Investment from
paid search on Google, as well as other advertising costs?
Roberto Hortal, MORE TH>N: Seen purely from a customer acquisition perspective
and ignoring the deeper implications for the insurance market, I believe price compar-
ison sites actually help reduce overall acquisition costs.