Transcript Chapter 1

Chapter 13
EC Strategy, Globalization, and SMES
Learning Objectives
1. Understand the essentials of online business
competition and strategy and how the Internet
and EC influence Porter’s Five Forces model.
2. Describe the performance and strategy cycle.
3. Describe the strategy initiation phase.
4. Understand the activities of strategy formulation.
5. Understand the strategy implementation phase.
Learning Objectives
6. Describe strategy assessment, including the role of
metrics.
7. Describe performance improvements and
innovations in e-commerce.
8. Evaluate the issues involved in global EC.
9. Describe how small and medium-sized businesses
can use EC.
Organizational Strategy:
Concepts and Overview
• *Strategy
• Strategy in the Web Environment
• Porter’s Five Forces Model and Strategies as
Influenced by the Internet and EC
1. Threat of entry of new competitors
2. Bargaining power of suppliers
3. Bargaining power of customers or buyers
4. Threat of substitute products or services
5. Rivalry among existing firms in the industry
o Strategies for Gaining Competitive Advantage
Porter’s Five Forces Model
Organizational Strategy:
Concepts and Overview
• The Impact of the Internet
• Strategic Planning for IT and EC
The Strategy and
Performance Cycle and Tools
• Strategy and Performance Cycle and Tools
• *Strategy Initiation—Goals
Improved performance
Gain of competitive advantage
Increased sales and revenue
Improved customer and partner service and
relationships
o Generation of new business models and
facilitating innovation
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The Strategy-Performance Cycle
The Strategy and
Performance Cycle and Tools
• *Strategy Formulation
o Specific activities and outcomes from this phase include:
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Business opportunities
Cost–benefit analysis
Risk analysis, assessment, and management
Business plan
• *Strategy Implementation
o The major specific activities and outcomes from this phase
include:
• Project planning
• Resource allocation
• Project management
The Strategy and
Performance Cycle and Tools
• *Strategy Assessment
• Performance Improvement and Innovations
• Major Tools for Strategic Planning
E-Commerce
Strategy Initiation
• Representative Issues in E-Strategy Initiation in
E-commerce
o First-Mover Advantage
o Managing Channel Conflict and
Disintermediation
• *Disintermediation
o Price Conflict and Its Management
o Separating Online and Offline Operations
• Brand Independence
• Strategy in the Web 2.0 Environment and in
Social Networking
E-Commerce
Strategy Formulation
• Selecting E-Commerce Opportunities
• Determining an Appropriate EC Application
Portfolio Mix
o The BCG Model and an Internet Portfolio Map
o The Viability-Fit Model
• Risk Analysis in Strategy Formulation
o *E-Commerce risk
• Collaborative Efforts in Strategy Formulation
The Internet Portfolio Map
Sources: Based on Tjan (2001), Sones (2001); and the authors’ experiences
E-Commerce
Strategy Formulation
• Security Issues to Consider During Strategy
Formulation
• Other Issues in E-Commerce Strategy
Formulation
o Managing Conflict Between the Offline and
Online Businesses
o Pricing Strategy
• *Cost-plus
o Multichannel Strategy
o Acquisitions, Partnerships, Joint Venture, and
Multi EC Model Strategy
E-Commerce Strategy
Implementation
• E-Commerce Strategy Implementation Process
o Find a Champion
• *Project champion
o Start with a Pilot Project
o Allocate Resources
o Manage the Project
• E-Commerce Strategy Implementation Issues
o Build, Buy, or Rent EC Elements
o Outsource: What? When? To Whom?
• *Outsourcing
• Software-as-a-Service
E-Commerce Strategy
Implementation
• Redesigning Business Processes: BPR and BPM
o *Business process reengineering (BPR)
o *Business process management (BPM)
o Change Management
E-Commerce
Performance Assessment
• The Objectives of Assessment
o Measure the extent to which the EC strategy and
projects are delivering what they are supposed
to deliver.
o Determine if the EC strategy and projects are still
viable in the current changing business
environment.
o Reassess the initial strategy in order to learn from
mistakes and improve future planning.
o Identify failing or lagging projects as soon as
possible, and determine why they failed or
lagged to avoid the same problems in the future.
E-Commerce
Performance Assessment
• The Performance Assessment Process
1. Set up performance metrics.
2. Monitor the performance of the business.
3. Compare the actual performance to the
metrics.
4. Conduct an analysis using analytics, including
Web analytics.
5. Combine the analysis with the methodology of
the Balanced Scorecard.
6. Present the results to management in the form of
reports, tables and dashboards.
The Performance Assessment Process
E-Commerce
Performance Assessment
• Establish Metrics
o *Metric
o Measurements in Performance Metrics
• *Key performance indicator (KPI)
• Intangible variables
o E-Commerce Metrics in Action
o Performance Metrics
• Monitoring Performance
o Monitoring the Social Media Field
• Social Media Monitoring Tools
o *The Balanced Scorecard (BSC)
E-Commerce
Performance Assessment
• Analyzing Performance Data
• Defining EC Analytics
o Major Types of Analysis
• Web Analytics and Its Major Tools
o *Web analytics
o Social Media Activities
o *Sentiment Analysis (opinion mining)
Performance Improvement
and Innovation
• An Overview of Performance Improvement
• Dashboards in E-Commerce
o What Is a Dashboard?
• *Information dashboard
• Innovation for Performance Improvement
Performance Improvement
and Innovation
• Innovative Strategies: Some Illustrative
Examples
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Target Corporation
Best Buy
Travelzoo Inc.
Facebook
Apple
Cars.com
Google+
IBM
A Strategy for
Global E-Commerce
• Benefits and Extent of Global Operations
o Globalization and Social Networking
• Barriers to Global E-Commerce
o Cultural Differences
o Language Translation
• Machine Translation
o Legal Issues
o Geographic Issues and Localization
• Web Localization
• Payments in Global EC Trades
o Economic and Financial Issues
• E-Commerce in Developing Countries
A Strategy for
Global E-Commerce
• Breaking Down the Barriers to Global ECommerce
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Be strategic
Know your audience
Localize
Think globally, act consistently
Value the human touch
Clarify, document, explain
Offer services that reduce trade barriers
E-Commerce Strategy for Small
and Medium-sized Enterprises
o If Judy Can- You Can Too!: The Story of Blissful
Tones Webstore
• Globalization and SMES
• Resources to Support SME ACTIVITIES IN EC
• SMES and Social Networks
Screen Shot Of Blissfultones.Com
Managerial Issues
1. What is the strategic value of EC to the
organization?
2. How do you relate the EC activities to business
objectives and metrics?
3. Should the EC activities in a brick-and-click
company be organized as a separate entity?
4. How should the e-business scope evolve?
5. What are the benefits and risks of EC?
6. Why do we need an EC planning process?
7. How can EC go global?
8. How do you manage the EC project?
Summary
1. Strategy concepts and competitiveness.
2. The strategy-performance cycle and strategy
tools.
3. E-strategy initiation.
4. Strategy formulation.
5. E-strategy implementation.
6. Strategy assessment.
7. Performance improvement and innovation.
8. Issues in global EC.
9. Small and medium-sized businesses and EC.