e Commerce Strategies

8/3/2019 e Commerce Strategies

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Scope of e-commerce

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Learning objectives

What is e-commerce? What are the e-challenges?

What are the strategies for e-commerce?



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Learning objectives





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E-commerce definition

Technology-enabled transactions and technology-mediated exchanges of digitized informationbetween parties (individuals or organizations) aswell as the electronically based intra-organizational

or inter-organizational activities that facilitate suchexchanges



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Scope of e-commerce:1. Exchange of digitized information

2. Technology-enabled transactions

3. Technology-mediated relationships4. Intra- & inter-organizational activities



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B2B C2B

B2C P2P

Business Consumers

Business originating from . . .

Business

Consu

mers



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E-commerce categories

Publishers order paper

supplies from papercompanies

Amazon orders frompublishers

Consumers aggregate tobulk purchase from Amazon

Consumers buy thousandsof Harry Potter books fromAmazon

Business Consumers

Business originating from . . .

Business

Consu

mers

Consumers resellcopies on eBay

Single chain (or converging categories) of e-commerceHome Based Part Time Jobs at

www.earnrupees4you.com


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E-COMMERCE vs TRADITIONAL COMMERCE

Key elements E-commerce Traditional commerce

Value Creation Information Product/Service

Strategy Sense and respond

Simple rules

Classical

Competitive edge Speed Quality/Cost

Competitive force Low barriers of entry

Power of customers

Power of suppliers

Product substitution

Resource focus Demand side Supply side

Customer interface Screen-to-face Face-to-face

Communication Technology-mediated channels Personal

Accessibility 24 x 7 Limited time

Customerinteraction

Self-service Seller influenced

Consumer behavior Personalization

One-to-one marketing

Standardization

Mass/one-way marketing

Promotion Word of mouth Merchandising

Product Commodity Perishables, feel & touch



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E-commerce definition1995-2000

Innovation

2001-2006

Consolidation

2006-future

Reinvention

Technology-driven Business-driven Audience, customer,community-driven

Revenue growth focus Earnings & profits focus Audience & socialnetwork growth focus

Venture capital financing Traditional financing Merger & acquisition

Entrepreneurial Traditional/old economy Large pure Web-basedfirms

Disintermediation Strengtheningintermediaries

Proliferation of smallonline intermediaries

Perfect markets Imperfect markets,brands, network effects

Online marketimperfections

Pure-play Bricks & clicks New market (pure play);Retail (bricks & clicks)

First-mover advantages Strategic follower New market (1st mover)Home Based Part Time Jobs at



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Learning objectives





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Role of e-commerce managers

Entrepreneurship

StrategicManagement

Technology New Media

AccountingOperations

and Logistics

Finance Marketing



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Set Vision

Establish Goals

FormulateStrategy

DriveImplementation

Be Accountable

for Performance



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Vision: higher-order societal effectsGoals: performance targets that are measurable

and in line with the companys strategy &

business life cycle (process vs outcome)

Strategy: tradeoffs

Implementation: technology & media knowledge

Accountability: performance & results



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E-commerce challengesUnderstanding customer evolution

Invest ahead of customer needsCharting changing technology

Match technology choices to consumer tastes

Weathering the storm Reassure stakeholders with clear vision, sensible business

model, and profitable venture

Integrating offline & online activities Align offline & online business activities, esp. advertising,

branding, retail & online store design, service, warranties,returns (customer-facing activities)

Identifying key levers of competitive advantage Reallocate resources as competitive advantage levers evolve

Expanding globally Deal with complex internationalization issues



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Learning objectives





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E-commerce strategies

Implementation

Internal(Company)

Analysis

External

Analysis

Controland

Monitoring

StrategyFormulation

Corporate Business Unit Functional Operating

Objectives

Mission

Classical Strategic PlanningHome Based Part Time Jobs at



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Sense and respond Experimenting with intuitive, actionable,

easy to implement ideas

Proactively soliciting feedback fromcustomers



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Type Purpose Example

How-to rules They spell out key features of

how a process is executed -"What makes our process

unique?"

Akamai's rules for the customer service

process: staff must consist of technicalgurus, every question must be answered on

the first call or e-mail, and R&D staff must

rotate through customer service.

Boundary rules They focus managers on which

opportunities can be pursued and

which are outside the pale.

Cisco's early acquisitions rule: companies to

be acquired must have no more than 75

employees, 75% of whom are engineers.

Priority rules They help managers rank the

accepted opportunities.

Intel's rule for allocating manufacturing

capacity: allocation is based on a product's

gross margin.

Timing rules They synchronize managers with

the pace of emerging

opportunities and other parts of

the company.

Nortel's rules for product development:

project teams must know when a product

has to be delivered to the leading customer

to win, and product development time mustbe less than 18 months.

Exit rules They help managers decide when

to pull out of yesterdays

opportunities.

Oticon's rule for pulling the plug on projects

in development: if a key team member-

manager chooses to leave the project for

another within the company, the project is

killed.

Simple rules



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Position approachWhere should we be?

Resources approachWhat should we be?

Simple rules approachHow to get there?



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Position Resources Simple Rules

Strategic Logic Establish position Leverage resources Pursue opportunities

Strategic Steps

Identify an attractivemarket

Locate a defensibleposition

Fortify and defend

Establish a vision

Build resources

Leverage across markets

Jump into the confusion

Keep moving

Seize opportunities

Finish strong

Strategic Question Where should we be? What should we be? How should we proceed?

Source of AdvantageUnique, valuable position

with tightly integratedactivity system

Unique, valuable,inimitable resources

Key processes and uniquesimple rules

Works Best InSlowly changing, well-

structured marketsModerately changing, well-

structured marketsRapidly changing,

ambiguous markets

Duration of Advantage Sustained Sustained Unpredictable

RiskIt will be too difficult to

alter position as conditionschange

Company will be too slowto build new resources asconditions change

Managers will be tootentative in executing onpromising opportunities

Performance Goal Profitability Long-term dominance Growth



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Framing theMarket

Opportunity

Business

Model

Customer

Interface

MarketCommunicationand Branding

Implementation Metrics

E-commerce strategy formulation process


Documents

e Commerce Strategies