E-Business Strategy Detailed Notes

Learning Outcomes

  • Understand and apply a strategy process model for e-business.
  • Utilize tools for generating and selecting e-business strategies.
  • Recognize alternative strategic approaches to achieve e-business objectives.

Management Issues in E-Business Strategy

  • Differences from Traditional Strategy: E-business strategies differ in flexibility, speed of implementation, and the way they engage customers.
  • Integration with Existing Strategies: Key to blending e-business with traditional business and information system strategies.
  • Investment Evaluation: Determining investment priorities and assessing returns on e-business initiatives is crucial for success.

Michael Porter on E-Business

  • Important to deploy Internet technology to remain competitive, and the strategy lies in how it's implemented.

Definitions of Strategy

  • Strategy provides a framework for achieving objectives, including:
    • Meeting goals through resource allocation.
    • Competing effectively within a market.
    • Long-term organizational development plans.

Organizational Strategy Forms

  • Different organizational strategies may integrate or overlap, impacting the e-business landscape.

E-Business Development Environment

  • Factors Influencing E-Business Development: Includes national infrastructure, legal regulations, taxation, finance, security, trust, skill development, and ICT adoption.
  • Consider growth in e-business transactions and effectiveness in electronic business processes.

Key Technology Trends and Strategies

  • Evolution of e-Business Functions:
    • Intranet/Web functionality progresses from order taking to full supply chain integration: INFORM, INTERACT, TRANSACT, INTEGRATE.
  • Successful Sectors: Media, travel, retail for products like music, books, and customer support services.
  • Challenges: High-touch items (luxury goods, clothing) struggle in online environments. Offline factors (e.g., transport networks) can affect online success.

Sell-Side and Buy-Side E-commerce Strategies

  • Sell-Side E-commerce: Focus on driving online sales through acquisition, conversion, retention, and profitability metrics. Key is to communicate the benefits of online channels and manage integration.
  • Buy-Side E-commerce: Aims to optimize operational efficiencies. Strategic focus on automating internal processes and enhancing supplier collaboration.

Defining E-business Strategy

  • E-business strategy must align with information systems management, ensuring resource effectiveness in buy-side and sell-side functions.

Impact of E-Commerce on Business Strategy

  • E-commerce modifies business strategy fundamentally, impacting goals and operational plans.

E-commerce Strategy Development

  • Involves conceptualizing what an organization aims to achieve and how technical strategies facilitate that vision.
  • Utilizes customer relationship management (CRM) to tailor marketing efforts and includes strategic use of technology such as mobile commerce.

E-commerce Business Models

  • Types Include:
    • E-tailers: Selling both physical and digital goods directly.
    • Advertising Models: Revenue through ad placements on websites.
    • Brokerage Models: Facilitate transactions between buyers and sellers for a fee.
    • Affiliate Marketing: Earnings based on traffic conversions from affiliate sites.
    • Subscription Models: Charging fees for premium service access.

B2B Business Models

  • Ranges from one-to-one, company-centric models to multifaceted exchanges, with EDI often facilitating these interactions.
  • Exchange Models: Enable multi-company interactions for purchases and sales.

Key Issues in Mobile Commerce

  • M-commerce includes transactions via mobile devices; challenges include user interface, network reliability, and security.

Consequences of Lacking E-Business Strategy

  • Failure to develop an e-business strategy results in lost sales opportunities and diminished competitiveness. Poorly integrated services lead to a subpar customer experience.

Electronic Payment Systems

  • Terminology:
    • Digital Certificate: Validates sender identity in emails or websites.
    • Certificate Authority (CA): Trust entity that issues digital certificates.
    • Secure Sockets Layer (SSL): Secure data transmission protocol.
    • Electronic Cash: Digitized money for online transactions.

Strategic Analysis Models

  • Techniques like SWOT analysis, Porter's Five Forces framework, and situational analyses are critical for understanding e-business environments and competitive positioning.

Right Channeling Strategy

  • Ensures marketing reaches the desired customer at the right place and right time, balancing high-touch and low-touch service based on customer profiles.

Conclusion

  • Comprehensive understanding and implementation of e-business strategies are essential for businesses to remain competitive in tomorrow's digitally driven market.