ST Tools

Strategic and Tactical Tools

  • Goals:

    1. Explain knowledge competence to the reader.

    2. Provide application examples.

    3. Highlight critical abilities.

Introduction to Digital Business

  • Master relevant terminology for digital business.

  • Reflect on innovative digital tools' potential for organizations.

E-Business

  • Definition: Digital enabling of transactions and processes within a firm.

  • Focus: Application of digital technologies across business processes (planning, marketing, accounting).

  • Example: IBM became an e-business in the 90s, using technology extensively to drive operations.

E-Commerce

  • Definition: Digitally enabled commercial transactions between organizations and individuals.

  • Focus: Transactions across firm boundaries using the Internet and digital platforms.

  • Example: Amazon, primarily selling goods directly to consumers online.

Difference Between E-Business and E-Commerce

  • E-business: Broader term not limited to transactions, encompasses all internal processes using digital technology.

  • E-commerce: A subset of e-business focused on online sales transactions.

  • Example: Amazon’s website is e-commerce; Amazon's comprehensive digital business processes exemplify e-business.

Unique Features of E-Commerce

  1. Ubiquity: Accessible everywhere, reducing transaction costs and energy.

  2. Global Reach: Facilitates cross-border transactions more conveniently compared to traditional commerce.

  3. Universal Standards: Shared standards that lower market entry costs and product search costs.

  4. Information Richness: Delivers complex marketing messages interactively.

  5. Interactivity: Enables two-way communication between merchants and consumers.

  6. Information Density: High quality and quantity of information available to market participants.

  7. Personalization/Customization: Tailored marketing messages and product adjustments based on user data.

  8. Social Technology: Facilitates mass communication and content generation among users.

Major Themes Underlying E-Commerce

  • Technology: Basic understanding of technologies like the Internet, the Web, and complementary technologies.

  • Business: Key concepts like digital markets, customer behavior in digital markets, and industry value chains.

  • Society: Importance of societal pressures including privacy, public policy, and intellectual property issues.

The End of Scale

  • Economies of Scale: Historically important for competitive advantage in mass production; changing dynamics with digital tools.

  • Concept of Unscale: Technologies allow for customized products/rentable scales reducing fixed cost barriers.

  • Examples of Unscaled Businesses: Stripe (financial services), Airbnb, Warby Parker.

Frameworks for Scaling Down Large Companies

  1. Become a Platform: Rent capabilities to others for profit.

  2. Focus on Product: A shift to small, specialized offerings rather than mass-appeal products.

  3. Dynamic Rebundling: Providing customized experiences mimicking economies of scale without producing them.

E-business Interaction Models

  • Buy-side e-commerce: Transactions aimed at procurement from suppliers.

  • Sell-side e-commerce: Transactions related to selling to customers.

Digital Business Infrastructure

  • Definition: Complex decentralized arrangements of systems necessary for digital business functions.

  • Examples: Healthcare systems, financial payment systems, government ID systems.

Key Components of Digital Infrastructure

  • IT Capabilities: Hardware and software.

  • User, Operations, and Design Communities: Support services and human capital.

  • Organizational Structures: To manage e-business activities effectively.

The Evolution of the Internet

  • Stages:

    1. Innovation Phase: Idea and technology development.

    2. Institutional Phase: Adoption and usage for information sharing.

    3. Commercialization Phase: Companies leveraging the Internet for widespread use.

Internet Architecture

  • Physical vs. Functional Architecture: Different layers of organization and operation.

Key Concepts of Internet Technology

  • Packet Switching: Method for breaking down and transmitting digital messages efficiently.

  • TCP/IP: Core protocols governing Internet communications.

Social Networks and E-Commerce Strategies

  • Utilizing platforms for brand engagement, targeted advertising, and influencer collaborations.

Ethical and Sustainability Challenges in E-Commerce

  • Data Privacy: Balancing growth with responsible data practices.

  • Environmental Impact: Strategies to minimize waste and carbon footprints.

  • Importance of building trust and ensuring security in transactions.