CarOrder'com

1
CarOrder.com
Project Presentation CSIS 4555 Electronic
Business Systems April 29, 2003 Team 3Dave
Hudson Anthony Couse Diana Silver Nancy
Macharia
2
Overview

• Internet Revolution Started in mid 1990s
• On-line sale of cars was not attempted until
  1998.
• CarOrder.com was the Incumbent Yet it failed
  in less than 3 years.
• CarOrder.com was backed by a major software
  company Trilogy.

3
Brief History

• Founded in 1998 by Brian Stafford approved by
  Trilogy.
• Unique Marketing strategy
• Hiring incentives
• Advertising gimmicks
• Golden Gate Bridge
• Use of Havavision
• Paying tolls
• Only slight increase in sales

4
Industry

• Auto brokering is an industry that specializes
  in selling cars Online.
• Depends on manufacturers and dealers in order
  to make profit.
• Profitable way is to buy traditional
  dealerships, this allows the company to buy from
  manufacturers then sell online after increasing
  price.
• Unprofitable way of is to buy the cars from the
  dealers at a retail price and then sell online.

5
Competitors

• Main competitors were GM,Ford and Daimler
  Chrysler. Prevented the company from making
  profit by
• Destroying dealership transfers in order for
  franchise owners to stop selling cars to
  CarOrder.com.
• Established tougher franchise laws in every
  state toughest being Texas.
• Manufacturers threatened to revoke the
  franchise dealerships agreement if they
  continued to do business Internet startups.
• www.GreenLight.com was a competitor that was
  well funded and had investors including
  Automotive Group and Kleiner Perkins

6
Financials
Backed by Trilogy
A Great Place to Work?
1998 2000 2001
7
Financials
Wheres the profit?
Potential Revenue for Carorder.com
Only Half a Pie?
Missed Revenue Potential for Carorder.com
8
Financials
Dude Wheres My Car?
CarOrder.com fell short in delivering savings to
its customers Promised Average Savings
3,500 Actual Average Savings 490
9
Synopsis of Failure

• Touch and feel.
• Fulfilling customer demand.
• Poor selling.
• Changing lanes.
• Large automakers pull the plug.
• Acquisitions?
• Retail prices.

10
Prescriptions for Success

• Listen to customer needs.
• Start with strong business sense.
• Technical skills.
• Integrated business tools.
• Contacts resources reliability trust.
• Better grasp on offerings.
• ERP CRM professionals
• Aggressive marketing.

11
The Industry Today

• In 1st Quarter 2003, the brokerage models posted
  their first profits
• Autobytel
• AutoTrader

• The major automobile manufacturers are launching
  their own build buy models
• Ford
• Toyota
• Honda

12
Conclusion
Though CarOrder.com was the incumbent, it did not
have the power to change an industry and its
regulation. CarOrder.com and Trilogy set short
term make or break objectives rather than
making a long term strategy. The Automobile
makers will likely succeed because they have the
power and size to go long term.
13
Questions?