Chapter 2

Preparing the Online Business

Agenda

• Competition analysis

• The new channel

• New paradigms

• New system creation

• Discussion

Agenda

• Competition analysis

• The new channel

• New paradigms

• New system creation

• Discussion

Competition Analysis

• Identify and investigate your competitors on the web– Conducting business– Contacting customers

• Collect information– Survey– Purchase (Dun & Bradstreet)– Research & development (patents)

• Develop strategies - exploit competitors’ weakness and undermine their strength

Agenda

• Competition analysis

• The new channel

• New paradigms

• New system creation

• Discussion

The New Channel

• Old channels: linear– Face-to-face– Mail– Phone

• New channel: direct contact between customers and every partner in value chain – Internet

• Channel conflict

Channel Conflicts

• Clear market segmentation for all channel partners: decide who sells what to whom

• Solutions– Market check

– Channel strategy: reconstructing the value chain (selling products and providing service supports)

– Conflict documentation

– Time limit

Agenda

• Competition analysis

• The new channel

• New paradigms

• New system creation

• Discussion

New Paradigms

• One-to-one enterprise (mass customization)• Dynamic trade: Waverly Deutsch of Forrester

Research “ leveraging technology to satisfy current demand with customized response” – Buyer-selected not seller-selected

– Market decides the price

– Added value: services

– More fast and exact production

– Customers’ preferences database

Business Process Re-engineeringBPR

• Proposed by James Champy and Michael Hammer

• BPR – Question existing processes, rules and

structures– Replaces the old ones with completely new

processes, rules and structures– Increase the revenues or effectiveness by

factors

Business Process Re-engineeringBPR

• Customer – centric way• Hyperarchical organization structure• Reorganization

– Employee– Structure– Combination

• Example– Just in time– Manufacturing resources planning systems– Material requirement planning systems

Agenda

• Competition analysis

• The new channel

• New paradigms

• New system creation

• Discussion

New System Creation

• Analysis

• Plan

• Design

• Development

• Implementation strategies

Analysis

• Product identification– Soft goods

• Software or information• Sales and distribution channel

– Hard goods• Digitizing the value chain and orders

– Service providers• Translation or advertising

• IT evaluation– In house or outsource or combination

Analysis

• Goals– Lowest product price– Highest service– Cost reduction– Sales

• Location– Own internet connection– ISP

Analysis

• Shopping– Ease to use– Attractive

• Customer profile– Tracking visits & navigation– Customer database

• Public relation– Advertise and promote

Analysis

• Payment– Methods– Security

• Laws– National– International

• Culture

Plan

• E-business strategy in enterprise strategy– Which portion of the business

• Business partners considerations– Channel conflict

• Management & employee preparation

• Effective marketing Campaign

Plan

• Performance review method– Services & products fit into customer’s need and

expectation

• Information Technology– E-mail, Intranet, Extranet, hardware, software– Heterogeneous systems architectures– System integration (new and old ones)– Back up plan (web server, connection)– Security plan

• Project team

Design

• Process requirements

• Web design: strategy & creativity

• Security

• Customer database

• Marketing techniques

Development

• IT selection: hardware, software

• Methods– In- house– Outsource– Combination

Implementation Strategies

• Management involvement

• Plan for constant change

• Pilot– Test (bugs, errors)– Feedback (performance)– Scalability– Integration

Implementation Strategies

• Training, maintenance and support

• Measure productivity

• Prepare for resistance– Company culture and personal culture– Start from e-mail

Agenda

• Competition analysis

• The new channel

• New paradigms

• New system creation

• Discussion

Discussion - I

• What kind of impact will be on the old traditional business due to dynamic trading?

• Is it necessary to conduct a business re-engineering before implementing an e-business or any new way of doing business?

Discussion - II

• What are the differences between the training of employees in the old systems and e-business systems?

• What are the differences between the security consideration in the old systems and e-business systems?

• Can you improve the development steps in creation of new e-business?

Points to Remember

• Competition analysis

• The new channel

• New paradigms

• New system creation

• Discussion