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8/6/2019 Internet Strategies for Existing Firms Final1
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Presented by: Sayli ParingeLei Wang
8/6/2019 Internet Strategies for Existing Firms Final1
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y What is Business Strategy?
Johnson and Scholes (Exploring Corporate Strategy)
define strategy as f ollows:
"Strategy is the direction and scope of an organisation
ov er the long-term: which achie v es advantage f or the
organisation through its configuration of resources within
a challenging environment, to meet the needs of markets
and to f ulfill stakeholder expectations".
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Strategy at Different Le v els of a Business
y Strategies exist at se v eral le v els in any organisation -
ranging fro
m th
eov
erall bu
siness (o
r grou
po
f businesses) through to indi v iduals working in it.
� C orporate Strategy
� Business Unit Strategy
� Operational Strategy
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Strategic AnalysisThis is all about analyzing the strength of businesses' positionand understanding the important external factors that may influence that position.
y PE ST
EL
y Scenario P lanningy Five Forces Analysisy Market Segmentationy Directional P olicy Matrixy C ompetitive strategyy C ritical Success Factor Analysisy SWOT
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e-commerce
y The Sharing of business inf ormation. Maintaining the
business relationships and conducting the business
transaction by means of internet based technology.
(Poon & S watman, 1999).
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electronic commerce
y R etailers bring their Internet strategies many ad v antages in
going online.
I. Becoming multichannel retailers
II. A v ailable resources (financial or in terms of market
knowledge)
III. Minimize the cost
IV. In order f ulfillment and distribution infrastructure
(Doolin et al, 2003).
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Strategy is about winning, Internet
Strategy is about winning online.
Source: http:// www. web wings.com.au/internet-strategy.html
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Two types of existing firms needs
Internet strategy
y Ne w Firm W ho entering
in a market directly using e-commerce.
y Also known as e-tailers.
y Ex: boo.com
y Existing Firm using e-
commerce as a tool f orenhancing the business.
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A two dimensional framework for
companies adopt Internet
technology (Doolin et al., 2003).
1. Channel Management
2. Business Transf ormation
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Channel managementy The use of the Internet as a marketing channel to
support and reinf orce existing traditional saleschannels
y The separate de v elopmentof an Internet-based saleschannel, recognizing the different competenciesrequired f or Internet retailing, or to exploit a differentproduct
y The integration of Internet-based sales into theexisting retail operation, prov iding customers with aseamless retail storefront that enables them to mov efrom one channel to another (Doolin et al., 2003).
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Business Transformationy Three major approaches
1. E volutionary change2. An experimental strategy
3. R e volutionary change
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The c bi ati f ty es f I ter et cha el a agement and
the sc e f business transf rmati n involved
Source: Doolin et al, (2003).
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Two comparison case study ta les (1) A lpha Co Beta Co Gamma Co Delta Co
R etailMarket
Apparel ConsumerElectronics
GeneralMerchandise
Groceries
R e v enueNZ $million
100 130 800 1,600
ProductsOnline
600 10,000 600 14,500
ChannelManagement
Integrated SupportIntegrated
SupportSeparate
Separate
BusinessTransf ormation
Experimental
R e volutionary
E volutionary E volutionary Experimental
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Internet Strategy: Spectrums for existing
Business
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Spin Off
y A separate di v ision, Altogether different entity of
business.
y Able to speed up its decision making.
y Maintain a high degree of flexibility.
y Disad v antageous
y Ex: Barnes and Noble
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Strategic Partnershipy Strategic Partnership bet ween R ight Aid andDrugstore.com
y R ight Aid bought 25% od Drugstore.
y Help to promote each other.
y More flexibility to the customer.
y Maintain indi v idual brands and share a huge amount of traffic both
online and in stores.
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Joint Venture y Joint Venture bet ween KB to ys (80%) and
BrainPaly.com(20%)
y Kbkids
y Joint v enture with existing e-tailer.
y
Le v erages KB brand name without losing flexibility
y Independent management teams
y Online store prov ide growth and Ph ysical store: Scale.
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Exampley Ne w Zealand companies
Group online shopping websites www.grabone.co.nz
www.groupy.co.nz
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Exampley Amazon.com
Internet strategy: long tail (Pareto principle or 80-20rule).
Picture from
http:// www.escapethematrix
.net/blog/the-long-tail-
theory/569/
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Exampley Protect online trade safety
www.taobao.com
SellersBu yers
he third arty
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W h y mov e to the Internet?R easons to not mov e to TheInternet
y Properly applied as a business tool,the Internet has the capability to:y Make y our emplo yees more
producti v e and effecti v ey R educe y our cost of doing
businessy Increase y our competiti v e
ad v antagey Improv e communications within
y our company y Improv e communications
bet ween y our company and itssuppliersy Improv e communications
bet ween y our company and itscustomers
y If y ou do not ha v e a strategy, and just allow the Internet to seep into y our business practice, theInternet can ha v e negati v e
impacts on y our bottom line,because the Internet:y Has a lot of data, but the rele v ant
inf ormation can be hard to findy Can cost a lot of money to get
startedy Can cause people to waste a lot of
time by just surfing the Internety Can allow outsiders to sneak into
y our companys datay R equires skills that y our present
staff may not ha v e
Source: http://management.about.com/library/ weekly/aa022498.htm
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Conclusiony Increased integration of clicks and bricks process is inhibited by
business and technology barriers.
y non clear objecti v es f or adopting Internet strategies.
y Technology, social and economic barriers.
y Tends to automate the existing business strategies rather than
replacing.
y Direct or Indirect relations can be f ound bet ween bricks and
clicks.
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Activity (Answer the questions)y Handout
y Quiz
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Referencey Doolin, B. et al. (2003) Internet strategies f or established retailers: f our Ne w Zealand case studies.
Journal of Information Technology Cases and Applications 5(4): 3-20
y Barnes, D., et al. (2004) Managing the transition from bricks-and-mortar to clicks-and-mortar: abusiness process perspecti v e. K nowledge and Process Management 11(3): 199-209.
y Gulati, R . & Garino, J. (2000) Get the right mix of bricks & clicks. H arvard Business Review 78(3): 107-114.
y Prasarnphanich, P. & Gillenson, M.L. (2003) The h ybrid clicks and bricks business model.Communications of the ACM 46(12): 178-185.
y http:// www.escapethematrix.net/blog/the-long-tail-theory/569
y http:// www. web wings.com.au/internet-strategy.html
y http://management.about.com/library/ weekly/aa022498.htm