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Copyright 2001 by Marketspace LLC
Chapter 1 Lecture Slides
A Framework for E-Commerce
Rayport, JaworskiIntro to e-Commerce
Exhibits and Tables
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A Framework for E-Commerce Todays Objective
The objective of this chapter is to provide a framework for the study andpractice of e-commerce.
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Chapter 1: A Framework for E-Commerce
l Definition and scope of e-commerce
l
l Strategy-making in a rapidly changing environment
l
l The framework for the field of e-commerce
l
l What do senior e-commerce managers do?l
l Key challenges for senior leadership in todays environment
l
l Overview of book chapters
l
l Conclusion
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Chapter 1: A Framework for E-Commerce
l Definition and scope of e-commerce
l
l Strategy-making in a rapidly changing environment
l
l The framework for the field of e-commerce
l
l What do senior e-commerce managers do?l
l Key challenges for senior leadership in todays environment
l
l Overview of book chapters
l
l Conclusion
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Networked Economy
l Create value through the collection, organization and distributionof information
l
l Strategy formulation to make management of the enterprise andmanagement of technology convergent
l
l Competition in real timel
l Low barriers to entryl
l Organize resources around the demand sidel
l Technology for managing relationships with customers andmarkets
l
l Use of technology-mediated channels
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Attributes and Definition of E-Commerce
l Exchange of digitized information between parties
l
l Technology-enabled
l
l Technology-mediated
l
l Intraorganizational and interorganizational activities to supportexchanges
E-commerce: Technology-mediated exchanges between
parties (individuals or organizations) as well as the electronically based intraorganizational or interorganizational
activities that facilitate such exchanges
l
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Table 11: Four Categories of E-Commerce
B2BB2B C2BC2B
B2CB2C C2CC2C
Business Consumers
Business originating from . . .
Bus
ines
s
Consu
mers
And
sellingto.
..
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Exhibit 11: Convergence of E-Commerce Categories
Publishers order paper
supplies from papercompanies
Amazon orders frompublishers
Publishers order paper
supplies from papercompanies
Amazon orders frompublishers
Consumers aggregate tobulk purchase from Amazon
Consumers aggregate tobulk purchase from Amazon
Consumers buy thousandsof Harry Potter books from
Amazon
Consumers buy thousandsof Harry Potter books fromAmazon
Business Consumers
Business originating from . . .
Bus
ines
s
Consu
mers
And
sellingto.
..
Consumers resellcopies on eBay
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Chapter 1: A Framework for E-Commerce
l Definition and scope of e-commerce
l
l Strategy-making in a rapidly changing environment
l
l The framework for the field of e-commerce
l
l What do senior e-commerce managers do?l
l Key challenges for senior leadership in todays environment
l
l Overview of book chapters
l
l Conclusion
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Exhibit 12: Classical Framework for Strategic Management
ImplementationImplementation
Internal
(Company)Analysis
Internal(Company)Analysis
External
Analysis
External
Analysis
Controland
Monitoring
Controland
Monitoring
StrategyFormulation
StrategyFormulation
lCorporate
lBusinessUnit
lFunctional
lOperating
ObjectivesObjectives
MissionMission
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Sense-and-Respond Strategy
l Easy, actionable and easy to respond to
experiment with solutions
l Proactively solicit feedback from customers
Drawbacksl Reactive approach
appropriate for incremental competitive moves
l More appropriate for traditional offline companies
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Table 12: Three Approaches to Strategy
Source:Kathleen M. Eisenhardt and Donald Soll, Strategy As Simple Rules, Hayward Business Review (January 2001), 109.
Position Resources Simple Rules
Strategic Logic l Establish position l Leverage resources l Pursue opportunities
Strategic Steps
l Identify an attractivemarket
l Locate a defensibleposition
l
Fortify and defend
l Establish a vision
l Build resources
l Leverage across markets
l Jump into the confusion
l Keep moving
l Seize opportunities
l Finish strong
Strategic Question lWhere should we be? lWhat should we be? lHow should we proceed?
Source of Advantagel Unique, valuable position
with tightly integratedactivity system
lUnique, valuable,inimitable resources
l Key processes and uniquesimple rules
Works Best Inl Slowly changing, well-
structured markets
lModerately changing, well-structured markets
lRapidly changing,ambiguous markets
Duration of Advantage l Sustained l Sustained lUnpredictable
Riskl It will be too difficult to
alter position as conditionschange
lCompany will be too slowto build new resources asconditions change
lManagers will be tootentative in executing onpromising opportunities
Performance Goal l Profitability l Long-term dominance lGrowth
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Consumer Behavior Constants in the Networked Economy
l Customization
Personalization
l Interactivity
Ability to conduct two-way communication
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Chapter 1: Framework for E-Commerce
l Definition and scope of e-commerce
l
l Strategy-making in a rapidly changing environment
l
l The framework for the field of e-commerce
l
l What do senior e-commerce managers do?l
l Key challenges for senior leadership in todays environment
l
l Overview of book chapters
l
l Conclusion
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Exhibit 13: A Comprehensive Framework
MediaInfrastructure
MediaInfrastructure
MediaInfrastructure
MediaInfrastructure
TechnologyInfrastructure
TechnologyInfrastructure
CapitalInfrastructure
CapitalInfrastructure
E-CommerceStrategy
E-CommerceStrategy
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Exhibit 14: E-Commerce Strategy
MetricsMetrics
ImplementationImplementation
MarketCommunicationand Branding
MarketCommunicationand Branding
Customer InterfaceCustomer Interface
Business ModelBusiness Model
Framing the Market OpportunityFraming the Market Opportunity
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The Four Infrastructures
Technology Infrastructure
l Technology foundation enables e-commerce enterprises
l Hardware
computers, routers, servers
l Software
l
l
Capital Infrastructure
l Funding the business
sources of funds
l Valuing the business
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The Four Infrastructures
Media Infrastructure
l Internet as a mass communication medium
l Publish, design and edit digital content
l
Public Policy Infrastructurel Laws and regulations
l Impact of the Internet on society
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Chapter 1: Framework for E-Commerce
l Definition and scope of e-commerce
l
l Strategy-making in a rapidly changing environment
l
l The framework for the field of e-commerce
l
l What do senior e-commerce managers do?l
l Key challenges for senior leadership in todays environment
l
l Overview of book chapters
l
l Conclusion
E hibit 1 5 R l t Di i li f S i E C
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Exhibit 15: Relevant Disciplines for a Senior E-CommerceExecutive
EntrepreneurshipEntrepreneurship
Strategic ManagementStrategic Management
TechnologyTechnology New MediaNew Media
AccountingAccountingOperations
and Logistics
Operationsand Logistics
FinanceFinance MarketingMarketing
Note: Shaded boxes reflect new capabilities
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Exhibit 16: A Flow Diagram of the Strategic Responsibilities
Set VisionSet Vision
Establish GoalsEstablish Goals
FormulateStrategy
FormulateStrategy
DriveImplementation
DriveImplementation
Be Accountablefor Performance
Be Accountablefor Performance
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Table 13: Where to Find Senior E-Commerce ManagersWithin Existing Bricks-and-Mortar Companies
Note: Line executives are accountable for profit and loss of the business;Staff personnel provide support services to line personnel
Corporate Business Unit Stand-Alone
Line Executive lCorporate sitemanagement
lCross business unitintegration site
lReport to GM ofbusiness unit
lSeparate businessfrom corporate
parent
Staff Executive lSupports corporate-wide initiatives
lSupports and
advises SBU e-commerceinitiatives
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Chapter 1: A Framework for E-Commerce
l Definition and scope of e-commerce
l
l Strategy-making in a rapidly changing environment
l
l The framework for the field of e-commerce
l
l What do senior e-commerce managers do?l
l Key challenges for senior leadership in todays environment
l
l Overview of book chapters
l
l Conclusion
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The Challenges
Understanding Customer Evolution
l Tablestakes or cost of doing business
l Market research to understand how customer needs are evolving
Charting Changing Technologyl Choosing the right technologies matching consumer tastes to
technology choices
l
l
Balancing Irrational Exuberance and Irrational Dooml Estimating the impact of technology
l Weathering the storm reassuring stakeholders
l
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The Challenges
Integration of Offline and Online Activities
l Integration of customer-facing activities
advertising, branding, retail and store design, service,warranties
l Integration of systems, structure and processes
Identifying Key Levers of Competitive Advantage
l Reallocating resources as competitive advantage levers evolve
l
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Chapter 1: A Framework for E-Commerce
l Definition and scope of e-commerce
l
l Strategy-making in a rapidly changing environment
l
l The framework for the field of e-commerce
l
l What do senior e-commerce managers do?l
l Key challenges for senior leadership in todays environment
l
l Overview of book chapters
l
l Conclusion
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Book Overview
The Basic Technology of the Internet and Web
l Chapter 2 Introduction to the Web and Internet
basic technology concepts: webpages, hyperlinks, protocols
l Chapter 3 The basic of doing business on the Internet
security, payment processing, customer service, etc.
Strategy Formulation for Online Firmsl Chapter 4 Framing the market opportunity
How to do a market analysis for networked-economy businesses
l Chapter 5 Business models
The four components of a Marketspace business model
l
Chapter 6 The customer interface The 7Cs of customer interface
l Chapter 7 Communication and branding
Using new media communication approaches for competitiveadvantage
l
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Book Overview
Strategy Formulation for Online Firms
l Chapter 8 Implementation
How to do it
l Chapter 9 Metrics
The performance dashboard
Technology Infrastructure
l Chapter 10 The emergence and growth of B2B marketplaces
Net marketplaces and associated technologies
l Chapter 11 Collaborative commerce
Software and applications for a collaborative enterprise
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Book Overview
Capital Infrastructurel
Chapter 12 Early-stage business development: Human and financialcapital
Writing a business planl Chapter 13 Working with funders from seed stage to liquidity
Sources and stages of funding
Media Infrastructurel Chapter 14 Media transformation
From analog to digital platformsl Chapter 15 The Future of media usage
Dealing with media fragmentation
Public Policy Infrastructurel Chapter 16 Regulation
Self regulation vs. government regulationl Chapter 17 Internet and society
Changes and implications for society
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Chapter 1: A Framework for E-Commerce
l Definition and scope of e-commerce
l
l Strategy-making in a rapidly changing environment
l
l The framework for the field of e-commerce
l
l What do senior e-commerce managers do?l
l Key challenges for senior leadership in todays environment
l
l Overview of book chapters
l
l Conclusion
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Conclusion
l Attributes of e-Commerce:
Digitized exchanges Technology-enabled and technology-mediated
Intra- and inter-organizational activities that support the exchange
l The four categories of e-commerce are:
Business-to-business Business-to-consumer
Consumer-to-consumer or peer-to-peer
Consumer-to-business
l Strategy lies at the heart of e-commerce activities. Wrapped around thestrategy are technology, capital, public policy and media infrastructures.
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Conclusion
l Classic strategic planning is inadequate for managing an e-commerce
enterprise. Sense-and-respond and strategy-as-rules approachescomplement classic strategic planning.
l Senior e-commerce managers are responsible for:
Articulating a vision
Setting process and outcome goals
Formulating strategic direction and choice Driving implementation
Being accountable for performance
l The challenges of a senior e-commerce manager include:
Understanding how customers are evolving
Anticipating technology changes
Setting realistic expectations regarding e-commerce benefits
Integrating online and offline activities
Identifying how e-commerce activities can be a source ofcompetitive advantage