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OHT 5.1
© Marketing Insights Limited 2004
E-business Strategy
OHT 5.2
© Marketing Insights Limited 2004
Learning objectives
• Follow an appropriate strategy process model for e-business;
• Apply tools to generate and select e-business strategies;
• Outline alternative strategic approaches to achieve e-business.
OHT 5.3
© Marketing Insights Limited 2004
Issues for managers
• How does e-business strategy differ from traditional business strategy?
• How should we integrate e-business strategy with existing business and IS strategy?
• How should we evaluate our investment priorities and returns from e-business?
OHT 5.4
© Marketing Insights Limited 2004
How does e-business strategy differ from traditional business strategy?
• In the one-to-many hierarchical information flow that characterized the Industrial Age, information flowed one way, from the producer to the consumers. The Internet has changed this in three important ways.– the Internet allows consumers to talk to consumers– consumers can find and access information much
easier than before– enables the information flow to be reversed so
customer-centric companies can pull information from consumers to improve and customize products
OHT 5.5
© Marketing Insights Limited 2004
Michael Porter on the Internet
• ‘The key question is not whether to deploy Internet technology – companies have no choice if they want to stay competitive – but how to deploy it.’
Porter, M. (2001) Strategy and the Internet, Harvard Business Review, March 2001, 62–78.
OHT 5.6
© Marketing Insights Limited 2004
Different forms of organizational strategy
Figure 5.1 Different forms of organizational strategy
OHT 5.7
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• Corporate Strategy – What business should you be in? Looks at the whole range of business opportunities
• Business Strategy – Battle plans, tactics used to fight the competition in the industry that your company currently participates in (see Competitive Strategies and Competitive War Games)
• Functional Strategy – Operational methods and value adding activities that you choose for your business (venture strategies, technology strategies, diversification strategies, marketing strategies, differentiation strategies, etc.)
OHT 5.8
© Marketing Insights Limited 2004
Relationship between e-business strategy and other strategies
Figure 5.2 Relationship between e-business strategy and other strategies
OHT 5.9
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A generic strategy process model
Figure 5.3 A generic strategy process model
OHT 5.10
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Dynamic e-business strategy model
Figure 5.4 Dynamic e-business strategy model
Source: Adapted from description in Kalakota and Robinson (2000)
OHT 5.11
© Marketing Insights Limited 2004
Elements of strategic situation analysis for the e-business
Figure 5.5 Elements of strategic situation analysis for the e-business
OHT 5.12
© Marketing Insights Limited 2004
What happens where there is no e-business strategy?
• Missed opportunities for additional sales on the sell-side and more efficient purchasing on the buy-side
• Fall behind competitors in delivering online services – may become difficult to catch up, e.g. Tesco, Dell
• Poor customer experience from poorly integrated channels
OHT 5.13
© Marketing Insights Limited 2004
Adoption steps of e-business services
Figure 5.6 Adoption steps of e-business services
OHT 5.14
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Summary applications portfolio analysis for the B2B Company
Figure 5.7 Summary applications portfolio analysis for The B2B Company
OHT 5.15
© Marketing Insights Limited 2004
SWOT analysis for the B2B company
Figure 5.8 SWOT analysis for The B2B Company
OHT 5.16
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Customer demand for e-marketing services for The B2B Company
Figure 5.9 Customer demand for e-marketing services for The B2B Company
OHT 5.17
© Marketing Insights Limited 2004
Competitive threats acting on the e-business
Figure 5.10 Competitive threats acting on the e-business
OHT 5.18
© Marketing Insights Limited 2004
Porter’s five forces
Power ofsuppliers
Bargainingpowers ofcustomers
Extent of rivalrybetween
competitors
Threat ofsubsitutes
Threat of newentrants
The businessThreat of
substitutes
OHT 5.19
© Marketing Insights Limited 2004
Activity – Impact of Internet
• For one of the industries below, assess how the Internet has changed the competitive forces, e.g. has it increased or decreased power of suppliers and customers?
• Industries:– Banking– Supermarkets– Oil industry– Rail industry
OHT 5.20
© Marketing Insights Limited 2004
Elements of strategic objective setting for the e-business
Figure 5.11 Elements of strategic objective setting for the e-business
OHT 5.21
© Marketing Insights Limited 2004
Direct and indirect Internet contributions for fast growth companies in the US
Figure 5.12 Direct and indirect Internet contributions for fast-growth companies in the USA
Source: PricewaterhouseCoopers (2000)
OHT 5.22
© Marketing Insights Limited 2004
Grid of product suitability against market adoption for transactional e-commerce (online purchases)
Figure 5.13 Grid of product suitability against market adoption for transactional e-commerce (online purchases)
OHT 5.23
© Marketing Insights Limited 2004
Elements of strategy definition for the e-business
Figure 5.14 Elements of strategy definition for the e-business
OHT 5.24
© Marketing Insights Limited 2004
Strategic options for a company in relation to the importance of the
Internet as a channel
Figure 5.15 Strategic options for a company in relation to the importance of the Internet as a channel
OHT 5.25
© Marketing Insights Limited 2004
Assessment of risk for market and product development for the B2B company
Figure 5.16 Assessment of risk for market and product development for The B2B Company
OHT 5.26
© Marketing Insights Limited 2004
New product development – Smile online banking (www.smile.co.uk)
OHT 5.27
© Marketing Insights Limited 2004
Dabs.com (www.dabs.com)
Figure 5.18 Dabs.com (www.dabs.com)
OHT 5.28
© Marketing Insights Limited 2004
Elements of strategy implementation for the e-business
Figure 5.19 Elements of strategy implementation for the e-business