Novell/ LSE Report
... Tesco emerges as overall winner in Global Growth 100 survey...
LONDON - January 26th, 2000 - Large, traditional organisations are learning how to expand and evolve by successfully embracing the Internet and ebusiness, according to findings of The Web 2000 Top 100 Growth Report announced by Novell today.
Independently researched by the London School of Economics (LSE) and E-Audits, a UK based Internet research company, the report surveyed the world's100 fastest growing companies as defined by Deloitte Consulting/Braxton Associates, and analysed their ecommerce and ebusiness offerings through their web sites.
The results show that size matters. The world's largest, best-established 'brick and mortar' organisations have proved themselves to be better performers than start-up companies in applying themselves to ebusiness. The high-flying dot.com companies failed to reach the starting point.
The summary rankings and a copy of the report are available from Hill and Knowlton (see below for contact details)
The European report is available here.
"It is about evolution not revolution," states Eric Schmidt, Chairman and CEO, Novell. "The best business strategy for adapting to the Internet is one that identifies and capitalises on the new markets and technologies that are available. The business processes themselves need not change but should develop with the environment."
Within a global ecommerce market worth £112 billion (US$180 billion) in 1999 and a predicted value of £1 trillion (US$1.65trillion) in 2004*, findings expose the emergence of unexpected leaders and market trends:
Large companies (with over $10 billion in sales) have more sophisticated and innovative ebusiness capabilities than smaller ones (under $1 billion). Within the core e-commerce criteria of online ordering and payment, large companies scored 5 times higher than small companies. This is linked to the greater human and financial resources that many large companies now invest in their web sites.
Researchers found no direct link between corporate growth and Internet excellence, suggesting that companies which invest in web technology without integrating these investments into their overall business strategy may simply be wasting their money.
Regionally, the US dominates in terms of company growth and Internet prowess, with 75 of the fastest growing companies based in the US. American firms also fill 7 of the top ten Web rankings and 23 of the top 30. However, European companies are building on the US ebusiness experience and in some cases surpassing it; scoring better in the design and ease of use of their sites than their American counterparts and UK based supermarket chain Tesco prevailed as the overall survey winner.
UK companies score second highest behind the USA for ebusiness prowess, with 4 firms making it into the top 30. High farers (other than Tesco) include Eidos (14th), Action Computer Supplies (17th) and National Express (28th). Other European players include Nokia (Finland) and SAP (Germany), though there was little Southern European presence.
IT and telecoms are the leaders of the pack. Of the 6 sectors identified in the survey, including Retail, Utilities and Finance, Information Technology companies are most adept at ecommerce, followed by telecoms. The survey reveals a possible link between the growth of IT companies and their use of advertising and product promotions on the Web.
Consumer organisations rank consistently higher than those mainly working in a business to business basis
Steve Smithson, the author of the report and head of LSE Information Systems Department, affirms that the Internet has led to a change in the traditional business characteristics and procedures. "Technical progress has increased the variety of possible Web-based business activities, from the provision of information or advertising to sophisticated transaction processing and after-sales support functions."
Smithson continues, "As some [companies] have found, opportunity walks hand in hand with risk. Valued customers and staff can be lost through needless changes to stable business processes, and a sloppy web site can destroy a company's image."
Richard Evans, managing director of E-Audits, goes further; "Many companies still do not get it and are not giving any potential customers any real reason to log on," he explains. "The ones that have figured out how to leverage the Web realise that huge sums of money can be generated by presenting consumers with real added value."
Eric Schmidt, chairman and CEO, Novell, states that improvements in the technology behind Internet commerce will support ebusiness growth. "For business to business in particular, directory-enabled applications promise to lead growth by securely extending business networks and supply chains to customers, partners and suppliers. On the consumer side businesses are just now learning to use the Internet to enhance their relationships with customers. Directory enabled applications, for example, support personalised Web services and tools that increase control of personal information such as email addresses and transaction records."
For Tesco, concentration on developing its Internet business is certainly reaping its dividends. "It is a phenomenal market", explains Gary Sargeant, head of Tesco Direct, the company's online shopping service. "Online shopping is already accounting for around 2 per cent of our business in the stores where it is active."
LSE examined the world's top 100 fastest growing companies to explore the relationship between corporate growth and business practice on the Web. Web rankings are based on a specially devised E-Audit Methodology to demonstrate which companies and industries have been able to capitalise most on the Internet's potential for doing business. The audit mimicked all the stages of real online business transactions from the seeking of the price and product information, through order and settlement and culminating in after-sales service.
26 January 2000