Jimmy Lai Chee-Ying is a Chinese entrepreneur who wanted to take on two commercial giants in Hong Kong. He started a new business called AdMart, which used the Internet as well as telephones and fax to take orders for grocery products. The orders were to be filled in eight warehouses located throughout the city and delivered in one of 220 vans to customers' homes. The giants he was challenging were two supermarket chains that controlled over 60 percent of the grocery business in Hong Kong.
1. Do you believe it was a good idea for Jimmy Lai Chee-Ying to start a new business that competes with two very large businesses that control most of the grocery market in Hong Kong? Justify your answer.
2. Discuss the advantages and disadvantages of Lai's strategy of selling a very limited number of popular products. What do you think of his idea of selling computers?
3. Why is the new e-business able to sell products at much lower prices than the larger chains can? Do you believe the large businesses will drop their prices on the products Lai sells? Why or why not?
4. Identify another new Internet business that is competing with much larger traditional businesses. What is the business doing to encourage customers to switch from the larger business to the new e-business?