E business strategy

OHT 5.1

© Marketing Insights Limited 2004

E-business Strategy

OHT 5.2


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


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


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


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


Different forms of organizational strategy

Figure 5.1 Different forms of organizational strategy

OHT 5.7


• 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


Relationship between e-business strategy and other strategies

Figure 5.2 Relationship between e-business strategy and other strategies

OHT 5.9


A generic strategy process model

Figure 5.3 A generic strategy process model

OHT 5.10


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


Elements of strategic situation analysis for the e-business

Figure 5.5 Elements of strategic situation analysis for the e-business

OHT 5.12


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


Adoption steps of e-business services

Figure 5.6 Adoption steps of e-business services

OHT 5.14


Summary applications portfolio analysis for the B2B Company

Figure 5.7 Summary applications portfolio analysis for The B2B Company

OHT 5.15


SWOT analysis for the B2B company

Figure 5.8 SWOT analysis for The B2B Company

OHT 5.16


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


Competitive threats acting on the e-business

Figure 5.10 Competitive threats acting on the e-business

OHT 5.18


Porter’s five forces

Power ofsuppliers

Bargainingpowers ofcustomers

Extent of rivalrybetween

competitors

Threat ofsubsitutes

Threat of newentrants

The businessThreat of

substitutes

OHT 5.19


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


Elements of strategic objective setting for the e-business

Figure 5.11 Elements of strategic objective setting for the e-business

OHT 5.21


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


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


Elements of strategy definition for the e-business

Figure 5.14 Elements of strategy definition for the e-business

OHT 5.24


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


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


New product development – Smile online banking (www.smile.co.uk)

OHT 5.27


Dabs.com (www.dabs.com)

Figure 5.18 Dabs.com (www.dabs.com)

OHT 5.28


Elements of strategy implementation for the e-business

Figure 5.19 Elements of strategy implementation for the e-business

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E business strategy

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