dole commerce

7/28/2019 Dole Commerce

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E-commerceE-commerce

Name : Dr. Nasim Z. Hosein

E-Mail : [email protected]

Phone number : 605-626-7724


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AgendaAgenda Marketing

Commerce History of Internet Computer, Networks Intro to E-commerce History of E-commerce

WWW What is E-commerce Forces shaping E-commerce E-commerce today Categories of E-commerce What is a web based business E-commerce marketing strategies Setting up for E-marketing (online) Benefits of E-commerce Strategy Formulation Business Model


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Definition of MarketingDefinition of Marketing

Philip Kotler

Social and Managerial process by which

individuals and groups obtain what they need

and want through creating, offering, and

exchanging products of value with others.This definition rests on the following core concepts:

needs, wants, demands, products, value, cost and

satisfaction, exchange and transactions,

relationships and networks, markets, marketers and

prospects.


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Definition (cont)Definition (cont)

Needs exist in biology they are notcreated by marketers i.e. shelter, food,clothing, safety, belonging, esteem

Wants Need food want hamburger, fries,coke.

Desire Wants for specific products

backed by an ability and willingness to buythem


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Definition of CommerceDefinition of Commerce

The exchange of goods and services formoney

Consists of:

Buyers - these are people with money whowant to purchase a good or service.

Sellers - these are the people who offer

goods and services to buyers.Producers - these are the people whocreate the products and services that sellers

offer to buyers.


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Elements of CommerceElements of Commerce

You need a Product or service to sellYou need a Place from which to sell the productsYou need to figure out a way to get people to

come to your place.

You need a way to accept orders.You also need a way to accept money.You need a way to deliver the product or service,

often known as fulfillment.

Sometimes customers do not like what they buy,so you need a way to accept returns.You need a customer service and technical

support department to assist customers withproducts.


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History of The InternetHistory of The InternetStarted as a US government project in

1969.The purpose was to create a net that can

function even if one center is destroyed in

a military attack.- Hub and spokes can be useless if the hub is

destroyed.

- Network can continue to be functional even ifsome nodes are destroyed, as long as

information can pass through other nodes.

Effective in 1971 with computers on both

coasts of the US.


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In the 1980sIn the 1980s

Personal computers or terminals wereconnected to a server.

The server was a mainframe, or connectedto a mainframe computer.

The mainframe was connected to anothermainframe of the company in anotherlocation via dedicated lines.

Only large companies could afford theexpense and investment in equipment.


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TodayToday

Connections across countries andcontinents made through dedicated fastlines.

A company may have one local network(LAN) in NY, which is connected to theInternet through a Regional network.

Well established in N.A., Europe andcertain Asian countries


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Computer classificationsComputer classifications

Mainframes:- term for very large computers

- used to handle large amount of data or

complex processes

- main advantage is reliability

Midrange:

- medium sized, less expensive and smaller

- usually a serverMicro-computer:

- work stations with computing capabilities

- single-users systems linked to form a network


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What is a networkWhat is a network

Series of points or nodes interconnected bycommunication paths

Node is a connection point for transmittingdata

Network can interconnect with other

networks to form global networks


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Benefits of a networkBenefits of a network

Facilitates resource sharingProvides reliability

Cost effectiveProvide a powerful medium across

geographical divide


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Different kinds of networksDifferent kinds of networks

Type of signalNature of connection

Types of physical linksTopology

Communication model

Geographical distance


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Geographical DistanceGeographical Distance

Local area network (LAN): small area,share a single server

Metropolitan area network (MAN): awider network, can bridge several LANs

Wide area network (WAN): a broader area

covered, can include several MANsInternet: a network of networks that covers

the entire globe


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TCP/IP ProtocolTCP/IP Protocol

Allows any two computers tocommunicate and exchange data.The Internet transfers data packets among

computers.Each packet is identified by the sender

address and a receiver address.

The senders computer transfers the data

packet to another computer on the Internet,which transfers it to a chain of othercomputers until it reaches the finaldestination.


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Internet addressing systemInternet addressing system

Internet uses TCP/IP, therefore every computer on theInternet has an IP address

IP address is numerical, separated by dotsWorks with DNS:

- com: for commercial purposes

- net: for Internet Service Providers

- org: for non-profit, non-commercial groups

- gov: reserved for government- mil: reserved for military

- int: reserved for international organizations


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Assimilation of TechnologyAssimilation of Technology

Technology first adopted to increaseefficiency doing the same tasks fastere.g. word processing instead of typing

Technology next adopted to increaseeffectiveness doing tasks not only faster

but better e.g. spreadsheets transformedfinance and accounting (as well as scienceand other fields)


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Introduction to E-commerceIntroduction to E-commerce

E-Commerce, Web, Networks, InternetThe evolution of new businesses

The adoption of Brick and Mortarcompanies to the new economy

Market failures and economic explanations

for the new economy


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History of E-commerceHistory of E-commerce

EC applications firstdeveloped in the early1970s

- Electronic funds transfer

(EFT)

Limited to:

- Large corporations

- Financial institutions- A few other daring

businesses


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Enlarged pool ofparticipants to include:

- Manufacturers

- Retailers

- Service providers

Electronic datainterchange (EDI)electronic transfer ofdocuments:

- Purchase orders

- Invoices

- E-payments betweenfirms doing business


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EC Successes

- Pure online

eBay

VeriSign AOL

Checkpoint

- Click-and-mortar GE

IBM

Intel

Schwab

EC Failures

- E-tailors began to fail in

1999

- This does not mean thatECs days are numbered

- Large EC companies like

Amazon.com are

expanding but success or

failure is not certain


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E-Commerce MechanismsE-Commerce Mechanisms

Transformation of economic activity intodigital media

- Exchange information, content, agreements,

and services among parties that are connected

to through the Internet.

Enables new ways of creating, deliveringand capturing value to customers.

- Availability

- Convenience


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World Wide Web (WWW)World Wide Web (WWW)World Wide Web (Web):

- A collection of documents that reside on computers, andthat can be accessed by other computers on theInternet.

Multimedia documents:

- Text- Images

- Sounds

- Drawings

- VideoHypertext:

- Links to other documents

- Can begin execution of a program


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Web BrowsersWeb Browsers

Computer programs that can:- Display Web documents

- Follow links

- Execute other programs- Enhance applications such as real-time audio

or video

Netscape and Internet Explorer

The Microsoft legal trouble due to theExplorer.


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Web ServersWeb ServersComputers that run server software.A server waits for request to arrive from a

user.

- The request is typically for a document.

The server sends (serves) the document tothe requesting computer.

Sometimes the server allows a user to fill

in information on a document, and the thentransfers the information to anotherprogram or a server.


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Information on Users and SitesInformation on Users and Sites

Web log file

- User information

- Requested documents

Cookies

- Information stored on a PCs hard drive by the

site.

- Enables the site to identify the user.

- Enables profiling.

- Enables targeted advertising.


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WWW and InternetWWW and Internet

The World Wide Web (WWW) is not theInternet

Access to the Internet doesnt mean you

have e-commerceWWW works in HTTP

Web pages works in HTML

Web browser provide access toinformation on the WWW


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What is E-commerceWhat is E-commerce

Distributing, buying, selling and marketingproducts and services over electronic systems

E-business for commercial transactions

Involves supply chain management, e-marketing,online marketing, EDI

Uses electronic technology such as:

- Internet

- Extranet/Intranet

- Protocols


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Forces Shaping the Digital AgeForces Shaping the Digital Age


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Digitalization &Connectivity

Intranets : connect people

within a company.

Extranets : connect a

company with its suppliers,

distributors, and outside

partners. Internet : connects users

around the world.

Internet Explosion

Explosive worldwide

growth forms the heart of

the New Economy.

Increasing numbers of

users each month.

Companies must adopt

Internet technology or riskbeing left behind.


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DefinitionsDefinitions Internet:

- A collection of computers that speak a common

language protocol

Intranet:

- Private version of the Internet

- Main purpose to share company informationand computing resources among employees

Extranet:

- Private network that users outside the companycan access

- Requires security and privacy

- Collaborate with other companies


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New Types of Intermediaries:

Direct selling via the Internet bypassed

existing intermediaries (disintermediation).Brick-and-mortar firms became click-and-

mortar companies.

As a result, some click-only companies have

failed.


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Customization and Customerization:

With customization, the company custom

designs the market offering for the customer.

With customerization, the customer designs

the market offering and the company makes it.


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E-commerce as the NetworkedE-commerce as the Networked

EconomyEconomy Create value largely through gathering, synthesizing and

distribution of information Formulate strategies that make management of the enterprise

and technology convergent

Compete in real time rather than in cycle time Operate in a world characterized by low barriers to entry,

near-zero variable costs of operation and shifting competition Organize resources around the demand side rather than supply

side Manage better relationships with customers through

technology


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E-commerce TodayE-commerce Today

The Internet is the perfect vehicle for e-commerce because of its open standards andstructure.

No other methodology or technology has provento work as well as the Internet for distributinginformation and bringing people together.

Its cheap and relatively easy to use it as a

medium for connecting customers, suppliers, andemployees of a firm.

No other mechanism has been created that alloworganizations to reach out to anyone and

everyone like the Internet.


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E-commerce TodayE-commerce Today

The Internet allows big businesses to act likesmall ones and small businesses to act big.

The challenge to businesses is to maketransactions not just cheaper and easier forthemselves but also easier and more convenientfor customers and suppliers.

Its more than just posting a nice looking Web

site with lots of cute animations and expectingcustomers and suppliers to figure it out

Web-based solutions must be easier to use andmore convenient than traditional methods if a

company hopes to attract and keep customers.


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Four Categories of E-Commerce

B2B

B2C

C2B

C2CConsumers

Business

And selling

to...

Business originating from...

Business Consumers


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Distinct Categories of E-CommerceDistinct Categories of E-Commerce

Business to Business (B2B) refers to the full spectrum of e-commerce that can occur between two organizations.

This includes purchasing and procurement, suppliermanagement, inventory management, channel management,

sales activities, payment management &service and support.Examples: FreeMarkets, Dell and General Electric

Business to Consumer(B2C) refers to exchanges between

business and consumers, activities tracked are consumersearch, frequently asked questions and service and support.

Examples: Amazon, Yahoo and Charles Schwab & Co


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Distinct Categories of E-CommerceDistinct Categories of E-Commerce(contd)(contd)

Peer to Peer(C2C) exchanges involve transactionsbetween and among consumers. These can include thirdparty involvement, as in the case of the auction websiteEbay.

Examples: Owners.com, Craiglist, Monster

Consumer to Business (C2B) involves when consumersband together to present themselves as a buyer in group.

Example: www.planetfeedback.com

C f C C iC f C C t i


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Convergence of e-Commerce CategoriesConvergence of e-Commerce Categories

Business originating from

Business Consumers

And

Sellin

gto

Consum

er

s

Busine s

s

Publishers order

paper supplies from

paper companies

Amazon orders

from publishers

Consumers search

out sellers, offers

and initiatepurchases from

Amazon

Consumers resell

copies on eBay

Consumers buy

thousands of Harry

Potter books from

Amazon


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What is a web-based businessWhat is a web-based business

Business that uses the WWW to fulfill itsbusiness process

Four basic business processes:

- information dissemination

- data capture

- promotions and marketing

- transacting with stakeholders

Business objectives interact with web basedapplications


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Information disseminationInformation dissemination

Can publish relevant informationCan be used in crisis mode

Identifying worst case scenarios andproviding details


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Data captureData capture

Collect information about customersTwo methods:

- manual input- automated


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Promotions and MarketingPromotions and Marketing

Banner advertisingAffiliate programs

Registration with directoriesTraditional marketing


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Transacting with stakeholdersTransacting with stakeholders

Can display products and servicesCross-selling can be implemented

Can customize websiteCan react to competition

Can improve relationship


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Key Drivers of E-businessKey Drivers of E-business

Organizational culture- attitudes to R&D,willingness to innovate and use technology

Commercial benefits- impact on financialperformance of the firm

Skilled/committed workforce- willing and able toimplement and use new technology

Requirements of customers/suppliers- in terms ofproduct and service

Competition- stay ahead of or keep up withcompetitors

l f


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Appeal of E-commerceAppeal of E-commerce Lower transaction costs - if an e-commerce site is

implemented well, the web can significantlylower both order-taking costs up front andcustomer service costs

Larger purchases per transaction - Amazon offersa feature that no normal store offers

Integration into the business cycle People can shop in different ways. The ability to

build an order over several days The ability to configure products and see actual prices The ability to easily build complicated custom orders The ability to compare prices between multiple

vendors easily The ability to search large catalogs easily

Larger catalogs

Improved customer interactions - company.
http://computer.howstuffworks.com/framed.htm?parent=ecommerce.htm&url=http://www.amazon.com/exec/obidos/redirect-home/howstuffworkshttp://computer.howstuffworks.com/framed.htm?parent=ecommerce.htm&url=http://www.amazon.com/exec/obidos/redirect-home/howstuffworks


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Technical limitationsTechnical limitations

There is a lack of universally accepted standardsfor quality, security, and reliability

The telecommunications bandwidth isinsufficient

Software development tools are still evolving There are difficulties in integrating the Internet

and EC software with some existing (especiallylegacy) applications and databases.

Special Web servers in addition to the networkservers are needed (added cost).

Internet accessibility is still expensive and/orinconvenient


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Web based technologyWeb based technology

WebsitesE-mail

Search enginesInteractive communications


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Old Economy FirmsOld Economy Firms

Brick and Mortar companies need to adoptto the new economy

- Create a new Internet company.

- Create a new subsidiary.- Invest in an Internet competitor.

- Buy the technology from a consultant.

- Work with other firms to create an exchange.- Integrate with suppliers and or customers.


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Old Economy FirmsOld Economy Firms

Failure of old economy companies to adoptmay result in:

- Loss of market share.

- Inability to meet new economy competitors

prices.

- Reduced profits and cash flows.

- Inability to raise new financing.

- Loss of control in an acquisition by a neweconomy firm.


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Business OpportunityBusiness Opportunity

The Internet revolutionized ways of doingbusiness

Entrepreneurs found ways to exploitmarket failures and earn economic rents

New businesses were created that were notfeasible earlier

The new economy poses threats to old

economy firms that do not wish to adaptThe transformation is still in process. The

evolution continues


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Benefits and Challenges of E-commerceBenefits and Challenges of E-commerce

BenefitsBenefits

Persistent connection with customers

New value for customers

Access to new customers

Scalability

Persistent connection with customers

New value for customers

Access to new customers

Scalability

ChallengesChallenges

Cannibalization

Channel conflict

Customer confusion

Investor confusion

Cannibalization

Channel conflict

Customer confusion

Investor confusion

F t d tF t d t


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Front end systemsFront end systems

Direct user interface with business processesAccessible via WWW

Front-end systems:

- e-CRM- e-marketing

- e-services

- e-marketplace

- e-auction

k i i h i i l


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Marketing Strategy in the Digital AgeMarketing Strategy in the Digital Age

Requires a new model for marketing strategyand practice

Some suggest that all buying and selling willeventually be done electronically

Companies need to retain old skills andpractices but add new competencies


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E-Business in the Digital AgeE-Business in the Digital Age

Involves the use of electronic platforms toconduct company business.

Web sites for selling and customer relationsIntranets for within-company communication

Extranets connecting with major suppliers and

distributors


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E-Commerce in the Digital AgeE-Commerce in the Digital Age

More specific than e-business.Involves buying and selling processes

supported by electronic means, primarilythe Internet.

Includes:

e-marketing

e-purchasing (e-procurement)


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E-commerce vs. E-businessE-commerce vs. E-business

E-commerce is about doing businesselectronically

E-commerce conducting financial

transactions electronically

E-business is conducting business on the

InternetE-business is the transformation of

business processes through the Internet


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E-Marketing in the Digital AgeE-Marketing in the Digital Age

The marketing side of e-commerce.Includes efforts to communicate about,

promote, and sell products and services over

the Internet.E-purchasing is the buying side of e-

commerce.It consists of companies purchasing goods,

services, and information from online suppliers.

T f M k tTypes of e Marketers


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Types of e-MarketersTypes of e-Marketers


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Reasons for dot.com FailuresReasons for dot.com Failures

Poor research or planning.Relied on spin and hype instead of

marketing strategies.Spent too heavily on brand identities.

Devoted too much effort to acquiring new

customers instead of building loyalty.

Click and Mortar CompaniesClick and Mortar Companies


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Click-and-Mortar CompaniesClick-and-Mortar Companies

Most established companies resisted adding Websites because of the potential for channel conflictand cannibalization.

Many are now doing better than click-only

companies. Reasons:

Trusted brand names and more resources

Large customer bases

More knowledge and experience

Good relationships with suppliers

Can offer customers more options

Setting Up for E-MarketingSetting Up for E-Marketing


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Setting Up for E MarketingSetting Up for E Marketing

Online MarketingOnline Marketing


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Setting up for E-MarketingSetting up for E-Marketing

Corporate websites

Build goodwill and

relationships; generate

excitement

Marketing websites

Engage consumers

and attempt to influence

purchaseWebsite design

7 Cs of effective website

design

OptionsOptions

Creating websites

Placing online ads andpromotions

Creating or using Webcommunities

Using E-mail


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Seven Cs of Website DesignSeven Cs of Website Design

Conducting E-CommerceConducting E-Commerce

ContextContent

Community

CommunicationConnectionCommerce

Customization

The 7Cs of Website designThe 7Cs of Website design


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The 7C s of Website designThe 7C s of Website design

Context

Sites layout and design

Commerce

Sites capabilities to enablecommercial transactions

Connection

Degree site is linked to othersites

Communication

The ways sites enable site-to-

user communication or two-way

communication

Customization

Sites ability to self-tailor todifferent users or to allow users

to personalize the site

Community

The ways sites enable user-to-user communication

Content

Text, pictures, sound and videothat web pages contain

Fit and Reinforcement of CsFit and Reinforcement of Cs


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Fit and Reinforcement of CsFit and Reinforcement of Cs

ContextContext ContentContent CommunityCommunity CustomizationCustomization CommunicationCommunication ConnectionConnection CommerceCommerce

Business ModelBusiness Model

Consistent Reinforcement

Individually Supporting Fit


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Web AdvertisingWeb Advertising


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Web AdvertisingWeb Advertising Banner ads: allows for more targeted advertising

Pop-up ads: pop-under ads are displayed in a separatebrowser window beneath your main browser window

and remain there until you close them

Skyscrapers: An advertisement on a Web site that isvertically oriented on the page and larger than the

typical banner ad

This is a pop-up ad

Click here to close me


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Interstitials: are usually full-page ads displayed while a user isin transit from one page to another, triggered by code included in the

link


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Content Sponsorship: are sites that pay for placement in searchresults on keywords that are relevant to their business

The upper: This is the part of the shoe that wraps around and over the top of the foot. It may be made of leather or a synthetic material that is lighter and breathable (to reduce heat from

inside the running shoe). The tongue of the upper should be padded to cushion the top of the foot against the pressure from the laces. Often, at the back of the running shoe, the upper is

padded to prevent rubbing and irritation against the achilles tendon.

The heel counter: This is a firm and inflexible cup which is built into the upper of running shoes and surrounds the heel. It is usually very firm so that it can control motion of the rearfoot.

Post or footbridge: This is the firm material in the midsole which increases stability along the inner side (arch side; medial side) of the running shoe.

http://www.qksrv.net/click-1452744-10296776


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Microsites: limited areas on the Web managed andpaid for by external companies

http://www.autotrader.com/

Vi l M k tiViral Marketing
http://www.autotrader.com/http://www.autotrader.com/


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Viral MarketingViral Marketing

Gillette used viral marketing tointroduce the 3-bladed Venusrazor for women, greatlyexpanding the audience reachedby its Reveal the Goddess inYou truck tour and beach-site

promotions.



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Web communities allow

members with specialinterests to exchange views

Social communities

Work-related

communitiesMarketers find well-defined demographics andshared interests useful whenmarketing

Creating websitesPlacing online adsand promotions

Creating or using

Web communitiesUsing E-mail


OptionsOptions



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E-mail marketing

Key tool for B2B andB2C marketing

Clutter is a problem

Enriched forms of

e-mail attempt to breakthrough clutter

Spam is a problem

Creating websites

Placing online ads andpromotions

Creating or using Webcommunities

Using E-mail


OptionsOptions


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Benefits of E-commerceBenefits of E-commerce

To consumers: 24/7 access, more choices, pricecomparisons, improved delivery, competition

To organizations: International marketplace

(global reach), cost savings, customization,reduced inventories, digitization ofproducts/services

To society: flexible working practices, connectspeople, delivery of public services

fiB fi C


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Benefits to ConsumersBenefits to Consumers

Convenience

Buying is easy and private

Provides greater product access and selection

Provides access to comparative information

Buying is interactive and immediate

fi O i iB fit t O i ti


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Benefits to OrganizationsBenefits to Organizations

Powerful tool for building customer relationships

Can reduce costs

Can increase speed and efficiency

Offers greater flexibility in offers and programs

Is a truly global medium

B fi S iB fit t S i t


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Benefits to SocietyBenefits to Society

More individuals can work from home

Benefits less affluent people

Third world countries gain access

Facilitates delivery of public services

i i i


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Discussion Questions

What features do you look for on aWeb site that you feel make the siteappealing?

What are your major concerns aboutmaking online purchases?

What types of things can an onlineretailer do to create a more securebuying environment?

li d d i


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Online Ads and PromotionOnline Ads and Promotion

Forms of online advertising & promotion:

Banner ads & tickers (move across the screen)

Skyscrapers (tall, skinny ads at the side of a page)

Rectangles (boxes that are larger than a banner)

Interstitials (pop up between changes on Web site)

Content sponsorships (sponsoring special content)

Microsites (limited areas paid for by an external company)

Viral marketing (Internet version of word-of-mouth)

B i PB i P


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Business PressuresBusiness Pressures

The term business environmentrefers tothe social, economic, legal,technological, and political actions thataffect business activities

Business pressures are divided into thefollowing categories:- Market (economic)

- Societal- Technological

Major Business Pressures & the RoleMajor Business Pressures & the Rolef


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of ECof EC

Organizational ResponsesOrganizational Responses


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Organizational ResponsesOrganizational Responses Strategic systems

- Provide organizations with strategic advantages, enablingthem to: Increase their market share Better negotiate with their suppliers Prevent competitors from entering into their territory

Continuous improvement efforts- Many companies continuously conduct programs toimprove: Productivity Quality

Customer service Business process reengineering (BPR)

- Strong business pressures may require a radical change

- Such an effort is referred to as business processreengineering (BPR)


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Or ani ational Re pon eOrganizational Responses


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Organizational ResponsesOrganizational Responses

Reduction in cycle time and time to market- Cycle time reductionshortening the time it

takes for a business to complete a productive

activity from its beginning to end

- Extremely important for increasing

productivity and competitiveness

- Extranet-based applications expedite steps in

the process of product or service development,testing, and implementation

Strategy FormulationStrategy Formulation


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Strategy FormulationStrategy Formulation

Porters three generic strategies forbusiness:

- focus

- low cost leadership- differentiation

Differentiation in the new e-commerce

sector is the key to success

Classic Framework for Strategy ManagementClassic Framework for Strategy Management


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Mission

Goals

Implementation

Control and

Monitoring

Strategy

FormulationCorporate

Business-unit

Functional

Operating

External

Analysis

Internal

(Company)

Analysis

E commerce and OrganizationsE commerce and Organizations


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E-commerce and OrganizationsE-commerce and Organizations

Organizations that undertake e-commerce do sofrom two possible starting points:

- new online organizations

- traditional established organizationsFactors for success:

- first-mover advantage

- differentiation in the marketplace- flexibility and agility in the electronic

marketspace

Seven dimensions of E-commerce StrategySeven dimensions of E-commerce Strategy


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Seven dimensions of E-commerce StrategySeven dimensions of E-commerce Strategy

Four positional factorsFour positional factors

Technology: goal must be

understood within its market and

industry

Market: must determine itstarget market and whether it is

still open to new entrantsService: must know its

customers expectationsBrand: must understand if it has

the ability to create a strong

brand

Technology: goal must be

understood within its market and

industryMarket: must determine itstarget market and whether it is

still open to new entrantsService: must know its

customers expectationsBrand: must understand if it has

the ability to create a strong

brand

Three bonding factorsThree bonding factors

Leadership: vision of CEO for e-

commerceInfrastructure: technology

support for new model ofbusiness

Organizational Learning: does

the organization support internal

learning

Leadership: vision of CEO for e-

commerceInfrastructure: technology

support for new model ofbusinessOrganizational Learning: does

the organization support internal

learning

Technology LeadershipTechnology Leadership


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Technology LeadershipTechnology Leadership

Involves more than hardware and software Seven major areas:

- strategy: focus upon alignment and planning

- structure: focus upon becoming an e-organization- systems: technology integration

- staffing: developing a strong pool of skills

- skills: developing the necessary knowledge

- style: add value to customers

- shared values: must build value to the organization

Service LeadershipService Leadership


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Service LeadershipService Leadership

Established strategies of customer still applyInternet service strength derived from providing

additional information to the customer

Internet provides a low-cost, high-qualityservice channel with a global reach

Call centre strategy must be defined

E-mail interface channel must be defined

Brand LeadershipBrand Leadership


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Brand LeadershipBrand Leadership

Branding strength comes from being a firstmover

Brand reinforcement is a continuous task

Brand positioning can be defined using theInternet service value chain

Brand followers need to reposition as

quickly and effectively as possibleFour brand

Developing a Winning E strategyDeveloping a Winning E strategy


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Developing a Winning E-strategyDeveloping a Winning E-strategy

Ensure that the project is backed by senior management

Develop a strategy before a Web presence

Develop a strategy by focusing on technology,

branding, marketing and service Identify and use knowledge in the organization

Strategy must add value for customers and must changeas the requirements of the customers change

The Three Approaches to StrategyThe Three Approaches to Strategy


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The Three Approaches to StrategyThe Three Approaches to Strategy

Position approach: Where should we be vs. ourcompetition?

Resources approach: what resources should wepossess?

Simple rules approach: What processes should we

follow?

Three Approaches to StrategyThree Approaches to Strategy


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pp gypp gyPosition Resources SimpleRules

Strategic Logic

Strategic Steps

Strategic Question

Source of

Advantage

Works Best In

Duration ofAdvantage

Risk

Performance Goal

Establish position Leverage resources Pursue opportunities

Identify an attractivemarket

Locate a defensibleposition

Fortify and defend

Establish a vision

Build resources

Leverage across markets

Jump into the confusion

Keep moving

Seize opportunities

Finish strong

Where should we be? What should we be? How should we proceed?

Unique, valuable position

with tightly integrated

activity system

Unique, valuable,

inimitable resources

Key processes and

unique simple rules

Slowly changing, well-

structured markets

Moderately changing, well

structured markets

Sustained

It will be too difficult to

alter position as conditions

change

Sustained Unpredictable

Company will be too slow

to build new resources as

conditions change

Managers will be too

tentative in executing on

promising opportunities

Profitability Long-term dominance Growth

Rapidly changing,

ambiguous markets


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Business ModelBusiness Model


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Business ModelsBusiness Models

A method of doing business by which acompany can generate revenue to sustainitself

Spells out where the company is positionedin the value chain

Business models are a component of a

business plan or a business case


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Business Plans & Business CasesBusiness Plans & Business Cases

Business plan:

- A written documentthat identifies the

business goals andoutlines the plan ofhow to achieve them

Business case:

- A written documentthat is used by

managers to garnerfunding for specificapplications orprojects; its major

emphasis is thejustification for aspecific investment

Th C t t f B i PlTh C t t f B i Pl


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The Content of a Business PlanThe Content of a Business Plan

Mission statement andcompany description

The management team

The market and thecustomers

The industry andcompetition

The specifics of theproducts and/or services

Marketing and salesplan

Operations plan

Financial projectionsand plans

Risk analysis

Technology analysis


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Business Models in E-commerceBusiness Models in E-commerce


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105

Business Models in E-commerceBusiness Models in E-commerce

Method of doing businessWell-planned model gives a competitive

advantage

Impacts on sustainability and growthThree areas:

- value stream

- revenue streamlogistical stream

Transaction costsTransaction costs


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Transaction costsTransaction costs

Cost of providing some good or service throughthe market

Effects of e-commerce and the internet thatimpacts the business model

Searching for an obtaining information Participating in a market

Policing and enforcing transactions

Bargaining and decision costsActual cost of buying or selling the product

Value StreamValue Stream


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Value StreamValue Stream

Create long-term sustainabilityBenefit for business stakeholders

Can be achieved in four ways:

- creation/participation in an e-marketplacecreation/participation of virtual communities

- additional value offers

- exploitation of offers

Creation/participation in an e-marketplaceCreation/participation in an e-marketplace


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Creation/participation in an e marketplaceCreation/participation in an e marketplace

Reduce transaction costs directly/indirectly Economics of e-market similar to traditional market

Can be setup by supplier/buyer or run independently

Buyer value:

- reduced costs- improved service

- convenience

Supplier value:

- reduced costs- differentiation

- reduced lead time

Creation/participation of virtualCreation/participation of virtual


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109

Creation/participation of virtualCreation/participation of virtual

communitiescommunities

Bringing together members of a community

Larger communities mean larger sources

Improves customer service


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111

Exploitation of offersExploitation of offers

E-commerce/Internet economy founded oninformation

Value can be added by using this informationTarget customers demographically

Can bridge the uncertainty gap

Can post RFPs

Revenue StreamRevenue Stream


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Revenue StreamRevenue Stream

Short-term realization of value propositionDirect:

- cost reduction

- free offerings of service/products- pricing strategies

Indirect:

- internet advertising

- selling customer information

- joining affiliate programs

Logistical streamLogistical stream


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Logistical streamLogistical stream

Examines organization restructure todeliver value added and revenue streams

Issues such as:

- organizational culture- pre/post restructuring

- implementing information

- communication and training- reward systems for motivation

Restructure value systemsRestructure value systems


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Restructure value systemsRestructure value systems In order to realize value and revenue streams

Disintermediation: the removal of one or more layers in thevalue chain to increase efficiency, improve responsiveness,reduce costs

Re-intermediation: reassembly of buyers, sellers and other

partners in the value chain in new ways Infomediation: overabundance of knowledge on the WWW

marketspaces Digitization: Digital goods are much cheaper to produce in the

long run with little or no distribution costs compared totraditional channels. Digital goods also provide relatively cheapand efficient channels for merchants who otherwise could notafford to reach customers on a global scale


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Kinds of business modelsKinds of business models

Brokerage: market makers bring togetherbuyer and sellers

Advertising: web advertising providingadvertising messages

Infomediary: collecting and disseminatinginformation

Assessing a business modelAssessing a business model


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Assessing a business modelAssessing a business model

Can be assessed by looking at themarketing strategy

Can also be assessed by technology

- imitation- complementary assets

Financial measures

Competitor benchmarkingMarket analysis

Traditional vs. New BusinessTraditional vs. New Business

ModelsModels


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ModelsModelsTraditional New Business

Production Mass Personalized

Manufactures push Customer Pull

Distribution Middleman Direct

Communications Closed Open

Finance Slow Fast

Difficult EasierMarkets Local Global

Mass Niche

Assets Physical Virtual

Consumer Decision ProcessConsumer Decision Process


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DisposalDisposal

LoyaltyLoyalty

SatisfactionSatisfaction

Purchase DecisionPurchase Decision

Evaluation of AlternativesEvaluation of Alternatives

Information SearchInformation Search

Problem - RecognitionProblem - Recognition

PRE-PURCHASE

PURCHASE

POST-PURCHASE

Consumer Decision Process Flower ExampleConsumer Decision Process Flower ExampleFlowers


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Flowers

DisposalDisposal

LoyaltyLoyalty

SatisfactionSatisfaction

Purchase DecisionPurchase Decision

Evaluation of AlternativesEvaluation of Alternatives

Information SearchInformation Search

Problem - RecognitionProblem - Recognition

Pre-Purchase

Purchase

Post-

Purchase

Need recognition, potentially triggered by a

holiday, anniversary or everyday events

Search for ideas and offerings, including: Available on-line and off-line stores Gift ideas and recommendations Advice on selection style and match

Evaluation of alternatives along a number of

dimensions, such as price, appeal, availability, etc.

Purchase decision Message selection (medium and content)

Post-sales support Order tracking Customer service

Education on flowers and decoration Post sales perks

MetricsMetrics


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MetricsMetrics

Response times

Site availability

Download times Timeliness

Security and privacyOn-time order

fulfillment

Return policy

Navigability

Measures of performance; may be quantitative

or qualitative

Metrics: If it moves, measure it!

dole commerce

Documents