464 A Design Tool for Business Process Design and Representation The abstract class GenericBusinessProces- sObject is the generalization of the last four concrete classes in the bullet item (SwimLane, FlowObject, Artifact and ConncetingObject). In the GenericBusinessProcessObject class we GH¿QHWKHGDWDW\SHSURSHUW\VKDUHGE\WKHVHIRXU classes. The datatype property are: • Categories. ,Q%301VSHFL¿FDWLRQLWKDV documentation purpose; in the metamodel LWLVDGDWDW\SHSURSHUW\RIW\SH³WH[W´ •Documentation. As categories, it is a GDWDW\SHSURSHUW\RIW\SH³WH[W´ •Name. It is a text data type property that DOORZV XV WR GH¿QHD XQLTXHQDPH LQ WKH business process diagram for each Generic Business Process Object. 3URSHUWLHV GH¿QHG LQ WKH $EVWUDFW FODVVHV cannot contain instances but, thanks to the class-subclass the relationship property will be inherited by subclasses until the subclasses will be concrete. At this point the main concepts of BPMN are represented as ontological classes. In order to link WRJHWKHUWKHPDLQFRQFHSWVZHGH¿QHWKH2EMHFW Property in the proper classes. The use of Object Property in the BPMN ontology is a little different from the traditional Semantic Web. An example is useful in under- standing this interesting aspect. Each process may be composed by different GenericBusinessPro- FHVV2EMHFWDQGLWLVQRWDPXVWWRGH¿QHLQHDFK process all the GenericBusinessProcessObject GH¿QHGLQWKH%301VSHFL¿FDWLRQ,IHDFK*H- QHULF%XVLQHVV3URFHVV2EMHFW LV GH¿QHG RQO\ E\ LWVQDPHDVROXWLRQPD\EHWRGH¿QHLQWKHFODVV Process several properties (datatype properties) each of one of the generic business process. The generic business process is a more complicated concept: It has several subclasses and each of them has its own properties. To solve this problem in the metamodel that we developed, we adopt an 2EMHFW 3URSHUW\ ³KDV*HQHULF%XVLQHVV3URFHV- sObject,” which has the class Process as domain and the class GenericBusinessProcessObject as range. The OWL code is in Figure 5. ,QWKLVZD\LWLVSRVVLEOHZKHQGH¿QLQJWKH PRGHO VWDUWLQJ IURP WKH PHWDPRGHO WR GH¿QH VHYHUDOLQVWDQFHV RIWKHSURSHUW\ ³KDV*HQHULF- %XVLQHVV3URFHVV2EMHFW´ HDFK RI WKHP GH¿QH DVSHFL¿FEXVLQHVVSURFHVVREMHFWZLWKLWVRZQ SURSHUWLHV6WDUWLQJIURPWKLVH[DPSOHZHGH¿QH LQWKHVDPHZD\WKHSURSHUW\³KDV6ZLPODQH´ This property has the ontological class Business- ProcessDiagram as domain and the ontological FODVV6ZLPODQHDVUDQJH)LQDOO\ZHGH¿QHWKH SURSHU W \³LV0DGH2I /DQH´WRVWDWHWKDWHDFK3RRO (class Pool is the domain of this property) may contain one or more Lane (range of property). Starting from previous consideration the core classes and main relationship of the ontology metamodel are represented in Figure 6. Some special cases have been faced dur- ing the development of the BPMN ontology metamodel. $3RROIROORZLQJ%301VSHFL¿FDWLRQPD\ contain both a Lane and a GenericBusinessPro- Figure 5. OWL code of has Generic Business Process Diagram Graphical Object 465 A Design Tool for Business Process Design and Representation cessObject (different from Swimlane) (Figure7). The problem is how to model this concept: make two different Object Properties or the same? The best solution, following the ontology idea, is to provide the same Object Property because the semantics of the relationship are the same. We GH¿QHWKH2EMHFW3URSHUW\³EHORQJV7R3RRO´ZLWK only one class as range (the ontological class Pool) and the domain as the union of the other classes: Flow Object, Artifact, and Connecting Object. In this way the same property, depending on the c o n t e x t , i s u s e d t o e x p r e s s b o t h t h e f a c t t h a t a L a n e belongs to Pool and to lay Flow Object, Artifact, DQG&RQQHFWLQJ2EMHFWWRWKHVSHFL¿F3RRO ,QWKHVDPHZD\WKH2EMHFW3URSHUW\³EH- longsToLane” (Figure 8) is used both to model the fact that one Lane can contain another Lane DQGWRGH¿QHZKLFK)ORZ2EMHFWDQGRU$UWLIDFW DUHGH¿QHGLQWKHVDPH/DQH Additional Classes In order to cover all the BPMN complexity, during the BPMN metamodel development, we GH¿QHFRQFHSWVPRGHOHGDVRQWRORJLFDOFODVVHV QRWFOHDUO\GH¿QHGLQWKH%301VSHFL¿FDWLRQ As an example we consider the class Trigger. We observe that a trigger is the mechanism that allows Figure 6. Core classes and relationship GenericBusinessProcessObject Swimlane hasSwimlanes Swimlane FlowObject Artifact ConnectingObject hasGenericBusinessProcessDiagramGraphicalObjects Pool isMadeOfLane Lane GH¿QH3URFHVVHV Processes AbstractClass Class references Generalization AbstractProcess PrivateProcess CollaborationProcess Figure 7. Ontological property belongsToLane and belongsToPool GenericBusinessProcessObject Swimlane FlowObject Artifact ConnectingObject Lane Pool belongsToPool belongsToLane isMadeOfLane 466 A Design Tool for Business Process Design and Representation an event to start, so a trigger is what allows the HYHQWVWRVWDUW%301VSHFL¿FDWLRQGH¿QHVVRPH properties for a trigger; for example, if a trigger is of type Timer, it has the property timeCycle that GH¿QHVWKHGXUDWLRQRIWKHHYHQWDQGWLPH'DWH WKDW GH¿QH ZKHQ WKH HYHQW VWDUWV :H OLQN WKH Ontological class Trigger with the Event by the SURSHUW\³KDV7ULJJHU´7KHFODVV7ULJJHULVPDGH up of several subclasses each of them, following %301 VSHFL¿FDWLRQH[SUHVVLQJDVSHFLDOW\SH of trigger (Figure 9). )LQDOO\WRGH¿QHDOOWKH%301SURSHUWLHVRI HDFK%301SULPLWLYHVZHGH¿QHZKHUHDSSUR- priate, ontological properties to meet the BPMN VSHFL¿FDWLRQ From the BPMN Metamodel to the Ontological Business Process Model 6WDUWLQJIURPWKHPHWDPRGHOSUHYLRXVO\GH¿QHG LWLVSRVVLEOHWRGH¿QHDEXVLQHVVSURFHVVPRGHO G H ¿ Q L Q J L Q V W D Q F H V RI R QW RORJ L F D O F O D V V H V D Q G S U R S - Figure 8. OWL code of the “belongsToPool” properties Figure 9. Ontological class trigger Events Events Events Cancel Compensation Error Link Message Multiple Rule Terminate Timer 467 A Design Tool for Business Process Design and Representation erties (we talk about concrete ontological classes). 6XSSRVHWKDWZHZDQWWRGH¿QHDVLPSOHEXVLQHVV process made up of one Pool and of a star event, one task and the end event. The task is linked to WKHVWDUWDQGHQGHYHQWZLWKVHTXHQFHÀRZ :H GH¿QH DQ LQVWDQFH RI WKH FODVV 3URFHVV DQG ZH GH¿QH WKH LQVWDQFHV RIDOO RIVRPHRI WKHPSURSHUWLHVGH¿QHGE\%301VSHFL¿FDWLRQ and in the metamodel. Following the property ³LV'H¿QHG,Q3RRO´ZHGH¿QHD3RRODQGDOOLWV SURS H U W LHV )ROORZ L Q JWKHS URSH U W \³KDV* H QHU LF- BusinessProcessDiagramObject” (starting from WKHFODVVSURFHVVZHGH¿QHWKH6WDUW(YHQWWKH WDVNWKH(QG(YHQWDQGWZRVHTXHQFHÀRZRQH has the start event as source and the task as target and another has the task as source and the end event as target. Obviously, the BPMN ontological metamodel development is supported by our editor where it LV KLGGHQ WKH %301 FRPSOH[LW\ DQG WKH ¿QDO design (with or without all details) may be saved in OWL format. The process representation so obtained follows the metamodel and it is an instance of it. FUTURE TRENDS 6WDUWLQJ IURP DQ RQWRORJLFDO GH¿QLWLRQ RI WKH BPMN metamodel and thus from an ontological GH¿QLWLRQRIWKHPRGHORXUQH[WVWHSLVRULHQWHG to two different directions. One way is to understand the possible key performance indicator and thus to design and implement a tool able to make the simulation of the process in order to provide to the manager the possibility to understand possible management and/or design errors and to correct them immedi- ately. The ontology representation of the process may help in this work thanks to the possibility to associate rules to the ontology and thus to think on a reasoning tool. 6WDUWLQJIURPWKHLGHDWRGH¿QHDOLJKWIUDPH- work to manage processes and to help in the design and implementation of Web application based on a process design, we look to the guidelines that support the steps from process design to Web application design. Guidelines will be, as soon as possible, a Web application design methodology WKDWVXSSRUWVWKHSURFHVVGH¿QLWLRQ7KLVGHVLJQ methodology will cover the gap in the traditional Web application design methodology based on a ³XVHUH[SHULHQFH´SDUDGLJPEXWQRWIRFXVHGRQ a process. CONCLUSION Starting from the necessity to introduce the pro- cess management in the overall IS architecture, our work focuses on the description of business process in a formal way aimed to automate the EXVLQHVVSURFHVVPDQDJHPHQW7KHIRFXVLV¿UVW on the notation to adopt: We think that the nota- tion must be complete and expressive with the goal to cover the traditional semantic gap be- tween business and IT experts. Our choice is the BPMN notation because BPMN goal is nearer to our goal. We focus also on the formal description of the business process in a machine–readable language. Observing that to represent the process we need a metamodel that is a guideline in the PRGHOGH¿QLWLRQWKHIRFXVRQWKHOD\HU02) metamodel is very helpful for our purpose but we highlight that the UML language used is poor for several reasons. So we introduce an innova- tive way to think on ontology different from the traditional Semantic Web use. OWL provides us several advantages both in the description of the metamodel and in the description of the model. OWL and Semantic Web technologies will help us in our future works. REFERENCES Berners-Lee, T., Hendler, J., & Lassila, O. (2001, May). The Semantic Web. 6FLHQWL¿F$PHULFDQ 284(5), 34-43. 468 A Design Tool for Business Process Design and Representation Gruber, T. R. (1993). A translation approach to SRUWDEOH RQWRORJ\ VSHFL¿FDWLRQV Knowledge Acquisition, 5, 199-220. Hammer, M. (1990). Reengineering work: Don’t automate, obliterate. Harward Business Review, 68, 104-112. Miers, D., Harmon, P., & Hall, C. (2006). The 2006 BPM suites report Realise 2.0. Retrieved September 30, 2006, from http://www.bptrends. com/reports_toc_01.cfm Retrieved March 15, 2005, from http://www. bptrends.com Object Management Group (OMG). (1997, Sep- tember). 2EMHFWFRQVWUDLQWODQJXDJHVSHFL¿FDWLRQ (Version 1.1). Object Management Group (OMG). (2001, Sep- tember). 8QL¿HGPRGHOLQJODQJXDJHVSHFL¿FDWLRQ (Version 1.4). Object Management Group (OMG). (2003, Sep- tember 8). 80/VXSHUVWUXFWXUHVSHFL¿FDWLRQ (Version 2.0). White, S. A. (2004, May 3). Business process mod- eling notation (BPMN) (Version 1.0 ). Retrieved May, 2004, from http://www.bpmn.org World Wide Web Consortium (W3C). (2004a, February 10). OWL Web ontology language reference. World Wide Web Consortium (W3C) (2004b, February 10). RDF vocabulary description lan- guage 1.0: RDF Schema. World Wide Web Consortium (W3C) (2004c, February 10).5');0/V\QWD[VSHFL¿FDWLRQ ENDNOTE 1 Specialization subclass is also called IS-A, and it allows us to connect a general concept ZLWKDPRUHVSHFL¿FFRQFHSW,QRXUH[DPSOH an AbstractProcess IS-A Process. This work was previously published in Semantic Web Technologies and E-Business: Toward the Integrated Virtual Organization and Bu, edited by A. Salam and J. Stevens, pp. 77-100, copyright 2007 by IGI Publishing (an imprint of IGI Global). 469 Copyright © 2009, IGI Global, distributing in print or electronic forms without written permission of IGI Global is prohibited. Chapter 2.10 B2C Failures: Toward an Innovation Theory Framework Anil M. Pandya Northeastern Illinois University, Chicago, USA Nikhilesh Dholakia University of Rhode Island, USA EXECUTIVE SUMMARY This article uses concepts derived from the in- vestigation of product and services innovation failures to develop a strategic market framework to help understand why so many Internet-based business-to-consumer (B2C) companies failed to IXO¿OOWKHLULQLWLDOSURPLVH%&FUDVKHVYLHZHG collectively, may be seen as representing an initial wave of failure of an entirely new class of tech- nology-driven services. Such services sought to inform, promote, sell, and deliver B2C items in radically unfamiliar ways. Research shows B2C ¿UPVIDLOHGEHFDXVHWKH\GLGQRWIROORZWLPH tested business precepts, but does not tell us why. In addressing this question, this article argues WKDWX Q VXFFHVVI XO%&¿U PVIDLOHGWRUHDOL]HWKH\ were marketing innovative services. It focuses on WKHGLI¿FXOW\RIPDUNHWLQJLQQRYDWLYHVHUYLFHVE\ developing an integrated framework using the continuum of need-solution context, in conjunc- tion with the notion that seller/buyer perceptions about the scope of innovations are not necessarily concordant. Matched perceptions lead to success, but not always because sellers and buyers can both misjudge the nature and scope of an innovation. Using secondary sources, the article illustrates the explanatory power of the framework and contributes to e-commerce management issues by clarifying why, despite resource availability, PRVW%&¿UPVIDLOHGLQWKHLQLWLDOURXQG INTRODUCTION This article proposes an innovation theory-based framework to help understand why so many Internet-based business-to-consumer (B2C) FRPSDQLHVIDLOHGWRIXO¿OOWKHLULQLWLDOSURPLVH B2C dot.com crashes represent special types of 470 B2C Failures innovation failures. Our analysis shows that the SURGXFWLQQRYDWLRQFDOOHG³%&HFRPPHUFH´LQ LWVLQLWLDOLQFDUQDWLRQZDVÀDZHG In innovative B2C settings, consumers bal- ance the cost of time and efforts against services received, and make judgments about service quality (Berry, Seiders, & Grewal, 2002). In the B2C environment, service quality depends on: (1) the process by which perceptions about the quality are formed, and (2) the gap between the perception of the service and the experience of the delivered service (Brady & Cronin, 2001; Zeithaml & Bitner, 2003). Furthermore, in high-tech marketing con- texts, two factors shape perceived vs. expected performance. These are the need-solution context (Leonard-Barton, Wilson, & Doyle, 1995), and the congruence of perceptions between technology innovators and technology consumers (Rangan & Bartus, 1995). In this article, we propose that in the initial wave of B2C service innovations, buyers and sellers marched down very divergent paths. Technology innovators and sellers saw B2C technologies as being capable of radically exceeding buyers’ expectations, while buyers saw B2C innovations as relatively inconvenient ways of performing familiar shopping tasks. 0DQ\%&¿UPVLQWKH¿UVWZDYHIRFXVHGPRUH attention on marketing and front-end technol- ogy, and less on timely delivery and customer satisfaction. The results were persistently high FXVWRPHUDFTXLVLWLRQFRVWVZLWKRXWVXI¿FLHQW revenues (Agarwal, Arjona, & Lemmens, 2001). 5HVHDUFK VKRZVWKDW PRVW %&¿UPV IDLOHG WR adhere to conventional management principles (Varianini & Vaturi, 2000). Thus, we ask: Why GLGVRPDQ\¿UPVZLWKUHVRXUFHVDQGWDOHQWVIDLO to use time-honored principles? What was it about this new technology and service delivery method that these managers misread? We argue that the ¿UPVIDLOHGWRUHDOL]HWKH\ZHUHGHDOLQJZLWKD new innovative situation, which needed a new managerial orientation (Achrol & Kotler, 1999). And as we argue later in the article, the innova- WLYHWHFKQRORJ\UHTXLUHG%&¿UPVWRDOWHUWKHLU view of business-customer relations. We develop a framework to show how innovation context can lead to problems of concordance of perceptions between buyers and sellers. Managers have to ¿JXUHRXWKRZWRQDYLJDWHWKLVPD]HRISHUFHS- tions to be successful. The article is organized as follows. The next section examines the scope of the B2C failure SUREOHP DQG UHÀHFWV RQ VRPH HDUO\ GLDJQRVHV of it. The section that follows presents the pro- posed innovation theory-based framework and provides illustrative evidence. The concluding section draws together the main arguments, and makes recommendations for managers and researchers. SCOPE OF THE B2C PROBLEM B2C e-commerce failure was a system-wide failure. It was not the case where a few manag- HUVLQDIHZVWDUWXS¿UPVPDGHSRRUMXGJPHQW FDOOV7KH¿QGLQJWKDWPDQDJHUVRIWKHVH¿UPV failed to follow well-known management truths — that costs cannot consistently exceed revenues, pricing correctly is critical, or customer services are important for long-term success (Agarwal, Arjona, & Lemmens, 2001; Marn, 2000; Varianini & Vaturi, 2000) — is important and necessary, EXWQRWLQLWVHOIVXI¿FLHQW,QFRPSHWHQFHLVQRWD VDW LVIDF WRU \DQ VZHUZKH QDODUJHQX PE HURI¿U PV IDLO7KLVVHFWLRQ¿UVWGHVFULEHVWKHHQRUPLW\RI the B2C failure, followed by a brief review of the HPSLULFDO¿QGLQJVWKDWKDYHFDUHIXOO\ORRNHGDW the B2C failures. This discussion sets the stage for our contribution and develops our framework to address the question of why these managers in DOOWKHVH¿UPVIDLOHG The Size of the Crash The B2C market crash was massive and economi- cally destabilizing. It wiped out billions of dollars 471 B2C Failures of market capitalization and led to huge loss of employment. Between 1995 and 2000 a total of 492 Internet-related companies raised $36.3 billion in capital in the public markets. By 2000, just 11% of these companies were trading at prices greater than their offer price. A third of them were trading below 80% of the offer price. In 1999, 230 Initial Public Offerings (IPOs) raised $18.2 billion. In 2000, 130 IPOs were offered and raised $12.8 billion, but 133 IPOs representing $10.4 billion were withdrawn from the market. The market capi- talization of the Internet sector in 1999 was $881 billion. This plunged to $208 billion by December 2000 (Anderson, 2001). Layoffs in the industry in the year 2000 were 4,805 in September, 5,677 in October, and by December, the total layoffs stood at 22,267. Unemployment reached 700,000 for the year 2001 (Corcoran, 2002; Rock, 2000). 7DEOHVKRZVSUR¿OHVRIVRPHRIWKH%&¿UPV that failed during the 1999-2000 period. Preliminary Diagnosis In most B2C debacles, there was persistent dis- crepancy between high customer acquisition costs and low revenues. In early 1999, B2C companies spent more than $1,100 to acquire a typical cus- tomer, someone who spent only $400. In late 1999, the average cost of customer acquisition reduced to $800, but customer spending remained at or below $400. The average monthly losses per B2C site were $1 million and $1.1 million, respectively, LQWKH¿UVWDQGVHFRQGKDOIRIGHVSLWHWKH reduction in customer acquisition costs (Agarwal, Arjona, & Lemmens, 2001). As supplemental revenue sources, B2C Web sites relied on subscription fees and advertising. But by the end of 1999, advertising revenue per visitor had declined from about $1 to 50 cents, and the rates charged to advertisers had declined between 3% and 12%. Among the content provid- ers, fewer than 10% were garnering subscription revenues in late 1999 (Agarwal, Arjona, & Lem- mens, 2001). In the false hope that the Internet was a price elastic market, many B2C businesses maintained low margins. However, in reality, instead of clicking across multiple sites, 80% to 90% of buyers of books and CDs visited only one site, even though prices of books and CDs across Web sites varied by as much as 25% to 30%. Hence it appears that in this segment of the B2C market, LQVWHDGRIGHHSGLVFRXQWLQJDVWXWH¿UPVFRXOG KDYHFKDUJHGKLJKHUSULFHVZLWKRXWVDFUL¿FLQJ UHYHQXHVDQGSUR¿WV0DUQ Only a small but solid group of companies managed to achieve visitor conversion rates of 12%, customer churn rates below 20%, and repeat purchase rates of around 60% (Agarwal, Arjona, & Lemmens, 2001). The majority of the B2C IDLOXUHVZHUHFDXVHGE\³IDWDODWWUDFWLRQ´OXULQJ visitors to the site but failing to convert them into FXVWRPHUV 6XFFHVVIXO ¿UPV JHQHUDWHG QHDUO\ three times the gross income from repeat custom- ers as from one-time buyers. This difference in performance was the result of superior skills in acquiring (keeping the customer acquisition cost low), converting (keeping the purchase process simple), and retaining customers (making opera- tional execution satisfactorily reliable, i.e., sites download quickly, on-time delivery, and ease of return or exchange of purchases). Additionally, the successful companies followed the tried-and-true principles from the brick-and-mortar world: 1. focus on core product or service propositions WKDW¿WWKHQHHGVRIZHOOGH¿QHGFXVWRPHU segments; 2. control extensions of product lines and busi - ness models, and focus on the core products; and DYRLG³EOHHGLQJHGJHWHFKQRORJLHV´LH leading but unproven technologies) and fo- cus on basic product presentation features, customer service tools, and logistics. ,QVKRUWWREHVXFFHVVIXOD¿UPPXVW¿QGLWV Q D W X U D O F X V W R P H U V H I ¿ F LH Q W O \ R I I H U W K H P Z K D W W K H \ 472 B2C Failures B 2C Firm Internet Business Lifespan S tatus Failure Date Redrocket.com Nickelodeon's toy sales site January 1995-0Dy 5, 2000 Acquired by Viacom in 1999 0Dy 2000 BBQ.Com Grilled meats and sauces June 15, 1999-0Dy 15, 2000. Standing as Barbequemall.com 0Dy 2000 DEN Digital Entertainment Network 1996-0Dy 17, 2000 Investment $50 million $75 million IPO shelved 0Dy 2000 Toysmart.com Smart “good” (not destructive or faddish) toys encouraged parents to “click on your child’s potential” January 22, 1999- 0Dy 19, 2000. Controlling interest by Disney in August 2000 with $50 million investment Disney stopped support Pixelon An investment scam 1996- August 2000 Bilked $30 million from investorV promoter lived in his car, spent half the capital on launch Turned himself over to the police Pop.com Received $50 million from Paul Allen of 0Lcrosoft The 80- employee content site never launched The sitebacked by Steven Spielberg, Jeffrey Katzenberg, David Geffen, Ron Howard, and Brian Grazerburned $18 million Closed 14 days prior to the launch Pseudo.com Streaming media 1994- September 18, 2000 Received $18 million in 1999 and $14 million in Spring 2000 With 10 channels chasing 10 different genres with streaming rich- media content across broadband, Pseudo could not establish its core audience Ingredients.com The company developed and manufactured personal care products for Web distribution 1998- October 2000 Received $4.5 million in funding 0 any beauty siteV competition from major brands and lack of originality or funding saw to its demise Table 1. Examples of B2C failures in 1999-2000 Source: Authors’ research based on multiple sources in the reference list 473 B2C Failures want, and deliver it reliably (Agarwal, Arjona, & Lemmens, 2001). B2C Internet businesses were hemorrhaging money because they failed to follow basic mar- keting principles. When electronic commerce was young, it seemed that marketing expertise could be cast aside. A speedy grab for a large share of the market with the aim of getting as many visitors as possible to the site became the immediate objective. It was assumed, falsely by PRVW%&¿UPVWKDWDWVRPHVWDJHWKHVHYLVLWRUV ZRXOGWUDQVODWHLQWRSUR¿WDEOHUHSHDWFXVWRPHUV (Varianini & Vaturi, 2000). &ROOHFWLYHO\WKHVH¿QGLQJVFRQ¿UPWKDWPRVW %&¿UPVIDLOHGWRDGKHUHWRFRQYHQWLRQDOPDQ- DJHPHQWSULQFLSOHVRIHI¿FLHQF\DQGFRQVXPHU focus. This raises important questions: Why did VRPDQ\¿UPVZLWKVRPXFKWDOHQWDQGHDV\DF- FHVVWRFDSLWDOVRPHSUR¿OHGLQ7DEOHIDLOWRXVH time-tested management principles? Why did they fail to realize that managing a B2C e-commerce required acumen similar to that required in the conventional brick-and-mortar world? What was it about this new technology and service delivery method that most B2C managers misread? Why could these companies not convert visitors into SUR¿WDEOH DQG OR\DO FXVWRPHUV" 7KH IROORZLQJ section addresses these questions. Toward Innovation Theory-Based Diagnosis The Internet implies a revolutionary shift in mar- keting approach. From being agents of the seller, %&¿UPVKDYHWREHFRPHDJHQWVRIWKHEX\HU (Achrol & Kotler, 1999). The Internet allows B2C ¿UPVWRJHWFORVHWRWKHLUFXVWRPHUVLQZD\VQRW SRVVLEOHEHIRUH)RUWKH¿UVWWLPHWKHVH¿UPVFDQ represent buyers to the producers of goods rather WKDQWKHRWKHUZD\DURXQG7KH\FDQ¿JXUHRXW what their customers want and communicate that GHPDQGWRWKHSURGXFHUV%&¿UPVIDLOHGWRDS- preciate this change and did not quite grasp that their business represented a radical service innova- tion, not new technology business. Additionally, they were offering known products to customers in a new, more convenient, and faster way than what was possible before. This new service con- cept emerged of the new technology, but that is not the whole story. Old retail knowledge about assessing demand, buying, managing inventory, developing displays, and improving delivery tech- nology — all have to be seamlessly integrated to F U H D W H D V D W L V ¿ H G F X V W R P H U7 K L V V X E W O H E X W V W U D W H J L F shift in perspective could have refocused B2C managerial efforts from being preoccupied with the new technology and market share dominance, to providing consistently high-quality customer service and convenience geared towards foster- ing buyer loyalty and customer retention. While DFNQRZOHGJLQJWKDWPDQ\%&¿UPVVWUD\HGIURP simple and conventional — but nonetheless vital and relevant — management principles, we present a theory-based framework to capture some of the additional underlying complexity of B2C failures, and to identify ingredients for B2C success. INNOVATION THEORY-BASED FRAMEWORK AND EVIDENCE The classical theory of innovation diffusion suggests that, to be widely adopted, innovations must be compatible with existing habits; provide incentives to change; and pose low physical, social, economic, and psychological risks to adopters. Overlaying this set of barriers is the inherent dif- ¿FXOW\RIPDLQWDLQLQJFRQVLVWHQWVHUYLFHTXDOLW\ which becomes important at the back end of a B2C operation. At the front end, not all customers are equally savvy about technology, and hence their involvement can lead to frustration when it comes to navigating Web sites. Thus B2C man- agers face serious problems involving customer perceptions and behavior change when purchas- ing goods on the Internet. The service quality model well known in the services marketing OLWHUDWXUHLGHQWL¿HVIRXUJDSVQRWNQRZLQJ . extensions of product lines and busi - ness models, and focus on the core products; and DYRLG³EOHHGLQJHGJHWHFKQRORJLHV´LH leading but unproven technologies) and fo- cus on basic product. WKHFODVVSURFHVVZHGH¿QHWKH6WDUW(YHQWWKH WDVNWKH(QG(YHQWDQGWZRVHTXHQFHÀRZRQH has the start event as source and the task as target and another has the task as source and the end event as target. Obviously, the BPMN ontological metamodel. GH¿QLWLRQRIWKHPRGHORXUQH[WVWHSLVRULHQWHG to two different directions. One way is to understand the possible key performance indicator and thus to design and implement a tool able to make the simulation of the process