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            <h1 class="f1-ns f2-m f3 fw3 tc ttu tracked mb0-ns">Alibris Case Study</h1>
            <section class="tc">
                <time class="i ttu dark-gray" datetime="2016-08-14">14 August 2016</time>
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}
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<blockquote>
  <p>Alibris is an Internet-era company providing search and fulfillment services for hard-to-find (rare, used, and out-of-print) books. At the time of the case, the company had made decisions to change its revenue model, to become involved in the fulfillment process for each book it sells by establishing a cross-dock facility, and to purchase Oracle's Internet commerce software. However, the implementation of this software has been very difficult, delaying the launch of the new fulfillment business and costing large amounts of money at a time when cash is scarce. The company's leaders, who are not IT professionals, must decide whether to continue with Oracle or begin anew with another product.</p>
</blockquote>

<p><a href="https://hbr.org/product/alibris-a/601111-PDF-ENG" target="_blank">Harvard Business Review</a></p>

<h2 id="exercise1">Exercise 1</h2>

<h3 id="assumptions">Assumptions</h3>

<ul>
<li>Technology is easy</li>
<li>Integrated information system is possible</li>
</ul>

<p>  </p>

<h3 id="questionstoconsider">Questions to Consider</h3>

<ul>
<li>Will customers pay for convenience so books can be sold for more than the dealer's asking price?</li>
<li>Will dealers will pay 20% and remain loyal?</li>
<li>Will dealers will list all of their books?</li>
<li>Can Alibris provide better quality control without impacting delivery time?</li>
<li>Can Alibris increase sales?</li>
<li>Will new entrants take their customers?</li>
<li>Will dealers list with their competitors?</li>
</ul>

<p>  </p>

<h3 id="revenuemodels">Revenue Models</h3>

<iframe width="100%" height="400" src="https://docs.google.com/spreadsheets/d/1mWa9ej7v4X4ko9aqGMdm7j5Q4RsO1LBlWu1gN0CrLuk/pubhtml?widget=true&amp;headers=false"></iframe>

<p>  </p>

<h3 id="report">Report</h3>

<h4 id="recommendation">Recommendation</h4>

<p>I recommend that Alibris pursue the New Revenue Model.</p>

<p>  </p>

<h4 id="newrevenuemodel">New Revenue Model</h4>

<h5 id="netincome">Net Income:</h5>

<table style="width:66%">  
  <tr>
    <th>1999</th>
    <th>2000</th> 
    <th>2001</th>
  </tr>
  <tr>
    <td>  $1,233,000.00</td>
    <td>  $2,169,000.00</td>
    <td>  $3,105,000.00</td>
  </tr>
</table>

<p>  </p>

<h5 id="assumptionshypotheses">Assumptions/Hypotheses:</h5>

<ul>
<li>That the $1,872,500 needed to implement this model can be acquired
<ul><li>It's 1998. Pets.com</li>
<li>Revenue model indicates an ROI of less than 1.5 years</li>
<li>In Santa Clara; In Silicon Valley</li></ul></li>
<li>Customer satisfaction will increase
<ul><li>Increased accountability</li>
<li>Centralized distribution/order consolidation</li>
<li>one box</li>
<li>one invoice</li></ul></li>
</ul>

<p>  </p>

<h4 id="oldrevenuemodel">Old Revenue Model</h4>

<h5 id="netincome">Net Income:</h5>

<table style="width:66%">  
  <tr>
    <th>1999</th>
    <th>2000</th> 
    <th>2001</th>
  </tr>
  <tr>
    <td>  $139,999.97</td>
    <td>  $235,999.96</td>
    <td>  $331,999.95</td>
  </tr>
</table>

<p>  </p>

<h5 id="assumptionshypotheses">Assumptions/Hypotheses:</h5>

<ul>
<li>Customer dissatisfaction will eventually drive business away
<ul><li>Customer experience is not easily monitored</li>
<li>Decentralized, no single point of contact for customers</li>
<li>Current 50-60% fulfillment rate, orders shipped within 2 days</li></ul></li>
<li>Competitors will provide better services
<ul><li>If it takes $1,872,500 to make the New Revenue Model happen, someone else can make that happen</li></ul></li>
</ul>

<p>  </p>

<h4 id="recommendedactions">Recommended Actions</h4>

<ul>
<li>Obtain funding from outside sources/Venture Capital to fund New Revenue Model </li>
<li>Asses current employee competency.
<ul><li>Restructuring base off of findings</li></ul></li>
</ul>

<p></p>

<hr>

<p>  </p>

<h2 id="exercise2">Exercise 2</h2>

<h3 id="assumptions">Assumptions</h3>

<ul>
<li>The new revenue model is better than the old revenue model</li>
<li>Thunderstone and Oracle are the only options</li>
</ul>

<p>  </p>

<h3 id="questionstoconsider">Questions to Consider</h3>

<ul>
<li>Will what worked for eBay work for Alibris?</li>
<li>Can Oracle succeed?</li>
<li>Will Thunderstone's software scale?</li>
<li>Can Thunderstone solve the locking problem?</li>
<li>Is Thunderstone's software maintainable?</li>
<li>Will Thunderstone stay in business?</li>
</ul>

<p>  </p>

<h3 id="report">Report</h3>

<h4 id="recommendation">Recommendation</h4>

<p>I recommend that Alibris pursues the Thunderstone Software solution.</p>

<p>  </p>

<h4 id="criteria">Criteria</h4>

<h5 id="finances">Finances</h5>

<ul>
<li>Resource utilization, trying to make Oracle work, 3 hires
<ul><li>Level 1 2,500/month</li>
<li>Consultant Level 2 22,000/month</li>
<li>Level 2 4,500/month</li>
<li>Avoid sunk cost fallacy</li></ul></li>
</ul>

<p>  </p>

<h5 id="deadlines">Deadlines</h5>

<ul>
<li>Oracle missing deadlines, no identified timeline</li>
<li>Thunderstone waffled whether possible, additional 60-90 days 
<ul><li>Possible credibility for being honest about feasibility, when first asked </li></ul></li>
</ul>

<p>  </p>

<h5 id="fulfillment">Fulfillment</h5>

<ul>
<li>Oracle has no known fulfillment date
<ul><li>Large amount of custom coding required to get to work, not plug and play or up-gradable </li></ul></li>
<li>Thunderstone "rescued eBay" from a similar situation 
<ul><li>Thunderstone has a "workaround" to record locking</li>
<li>The infrastructure and hardware for the solution is compatible</li></ul></li>
</ul>

<p>  </p>

<h5 id="language">Language</h5>

<ul>
<li>Oracle is ubiquitous</li>
<li>Thunderstone require proprietary Vortex
<ul><li>Hard to find developers</li>
<li>Long term support (LTS) is a concern</li></ul></li>
</ul>

<p>  </p>

<h4 id="assumptions">Assumptions</h4>

<h5 id="assumption">Assumption</h5>

<p>Thunderstone will be able to solve the locking problem.  </p>

<h5 id="justification">Justification</h5>

<p>Claims they have a workaround that they already used for eBay.</p>

<p>  </p>

<h5 id="assumption">Assumption</h5>

<p>Alibris won't have to worry, in the near term, about having more traffic than eBay.  </p>

<h5 id="justification">Justification</h5>

<p>CEO's own remarks. </p>

<p>  </p>

<h5 id="assumption">Assumption</h5>

<p>Thunderstone will be able to speed up queries, search results, and page load times.  </p>

<h5 id="justification">Justification</h5>

<p>Alibris and eBay have similar business functions.</p>

<p>  </p>

<h4 id="actions">Actions</h4>

<ul>
<li>Check to see if ebay systems are compatible or similar enough to the Alibris hardware.</li>
<li>Cut ties with Oracle.</li>
<li>Recoup funds from Oracle, due to not putting the software into production.</li>
<li>Reallocate resources to Thunderstone.</li>
<li>Evaluate the human capital required for the Thunderstone implementation, namely the three employees hired for the Oracle roll out.</li>
<li>Clarify whether if Texis is migrating from Vortex to a standard language. Based on result, may need to train in Vortex, start during during 60-90 day implementation.</li>
</ul>
        </section>

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                <a class="fr ph3 pv1 no-underline dim link ba br2 ttu f6" href="../strategic-alignment/">Future</a>
                <a class="fl ph3 pv1 no-underline dim link ba br2 ttu f6" href="../applied-project/">Past</a>
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