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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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8/3/2019 e Commerce Strategies
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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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8/3/2019 e Commerce Strategies
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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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E-commerce definition
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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E-commerce definition
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
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E-commerce definition
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
What is e-commerce? What are the e-challenges?
What are the strategies for e-commerce?
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Role of e-commerce managers
Entrepreneurship
StrategicManagement
Technology New Media
AccountingOperations
and Logistics
Finance Marketing
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Role of e-commerce managers
Set Vision
Establish Goals
FormulateStrategy
DriveImplementation
Be Accountable
for Performance
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Role of e-commerce managers
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
What is e-commerce? What are the e-challenges?
What are the strategies for e-commerce?
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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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E-commerce strategies
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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E-commerce strategies
Position approachWhere should we be?
Resources approachWhat should we be?
Simple rules approachHow to get there?
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E-commerce strategies
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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E-commerce strategies
Framing theMarket
Opportunity
Business
Model
Customer
Interface
MarketCommunicationand Branding
Implementation Metrics
E-commerce strategy formulation process
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