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AlloyTech : NAAD Presentation Online
Aluminum Outlook 2000? The Internet and Its Impact on the Metals Industry
Essential Knowledge for Online Success
Presented by:
Alan C. Gamble
September 2, 1999
Presentation Glossary
Appendix II - NAAD Member Websites
Appendix III - Internet Metals Linking Sites
Appendix IV - Recommended Reading
This year, E-commerce will account for roughly $20 billion in sales. By the year 2000, it is estimated that this number will exceed $50 billion. As impressive as these numbers are and as excited as Wall Street seems to be about the future of Ecommerce, a more careful analysis reveals some interesting facts.
The companies that are now doing big business on the Internet are primarily retail catalog businesses. For companies like LL Bean, J Crew, Tower Records and CD Now, the Internet is simply another way to leverage their existing marketing plans. All of these organizations are retail merchants that already publish their prices and outside of fast delivery, provide little or no value-added service.
By comparison, the metals service center industry lives and dies by value-added service and no one that we know of currently publishes their pricing. Add to this the inherently conservative nature of our business and I think that it's fair to say that the promise of E-commerce for our industry is still a year or two away.
Accepting this reality, we feel that many in the industry might opt to back away from the Internet in general but this would be a mistake. While the market may not be ready for full-blown commerce on the Internet, there is a strong argument to be made for the development and maintenance of a professional and functional website. Further, a Simulated Ecommerce system can be put in place today that will provide the functionality, (without the expense of a full Enterprise server) all the while keeping a live salesperson in the loop.
Source: Purchasing Online Internet Report (available in full text at www.purchasing.com)
Count on this: The majority of purchasing professionals will be conducting transactions over the Internet within a year or two.
That said, purchasing pros who are buying online today are still a minority, but their numbers are growing very quickly. PURCHASING's most recent reader survey reveals that 25% of purchasing pros currently are conducting transactions over the Internet. But within the next year, a total of 59% of polled purchasers will be buying online. By 2002, 90% of survey respondents will be buying over the Internet, according to the results of our survey.
Companies planning to still be around within 5 years, however, should take this information as a call to action and start working TODAY to maximize their efforts on the Internet.
Whether you already have a website, or plan to build one soon, examine these factors closely.
1.) High Visibility - Clients old and new should be able to find your website quickly. If they cannot, all your work is wasted.
Research and understand the search engines
2.) Attractive Layout
3.) Tell the Story
4.) Easy Navigation
5.) Information Rich
At phase one, put together an Internet Strategy Team (IST). Pull together key individuals from management, marketing/ sales, accounting and production. Establish a meeting schedule (at least once monthly) and give the team a budget.
Task the IST with examining all areas of the Internet, not just your corporate website. Individual team members should be asked to examine your competition on the web, technology issues and other areas that can be of value to your company, including using the Internet as an information resource for your employees and as a venue for buying and selling prime and surplus metal.
Goals
Resources
Additions
Goals
Additions
Goals
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Goals
In closing, I hope that this presentation will be a call to action. While you have yet to lose much in the way of real business yet, it is only a matter of time before your business will be strongly involved in the Internet.
Taking the time NOW to research the Internet and map out your company's own strategy is key to success. The resources are all around you on and off line. Your employees, for example, represent a wealth of www knowledge.
I wish you success in your endeavors and look forward to seeing the fruits of your labor in the years to come.
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