oht 5.1 © marketing insights limited 2004 chapter 5 e-business strategy

OHT 5.1

© Marketing Insights Limited 2004

Chapter 5E-business Strategy

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Learning objectives

• Follow an appropriate strategy process model for e-business;

• Apply tools to generate and select e-business strategies;

• Outline alternative strategic approaches to achieve e-business.

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Issues for managers

• How does e-business strategy differ from traditional business strategy?

• How should we integrate e-business strategy with existing business and IS strategy?

• How should we evaluate our investment priorities and returns from e-business?

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Michael Porter on the Internet

• ‘The key question is not whether to deploy Internet technology – companies have no choice if they want to stay competitive – but how to deploy it.’

Porter, M. (2001) Strategy and the Internet, Harvard Business Review, March 2001, 62–78.

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Different forms of organizational strategy

Figure 5.1 Different forms of organizational strategy

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Relationship between e-business strategy and other strategies

Figure 5.2 Relationship between e-business strategy and other strategies

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A generic strategy process model

Figure 5.3 A generic strategy process model

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Dynamic e-business strategy model

Figure 5.4 Dynamic e-business strategy model

Source: Adapted from description in Kalakota and Robinson (2000)

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Elements of strategic situation analysis for the e-business

Figure 5.5 Elements of strategic situation analysis for the e-business

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What happens where there is no e-business strategy?

• Missed opportunities for additional sales on the sell-side and more efficient purchasing on the buy-side

• Fall behind competitors in delivering online services – may become difficult to catch up, e.g. Tesco, Dell

• Poor customer experience from poorly integrated channels

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Adoption steps of e-business services

Figure 5.6 Adoption steps of e-business services

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Summary applications portfolio analysis for the B2B Company

Figure 5.7 Summary applications portfolio analysis for The B2B Company

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SWOT analysis for the B2B company

Figure 5.8 SWOT analysis for The B2B Company

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Customer demand for e-marketing services for The B2B Company

Figure 5.9 Customer demand for e-marketing services for The B2B Company

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Competitive threats acting on the e-business

Figure 5.10 Competitive threats acting on the e-business

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Porter’s five forces

Power ofsuppliers

Bargainingpowers ofcustomers

Extent of rivalrybetween

competitors

Threat ofsubsitutes

Threat of newentrants

The businessThreat of

substitutes

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Activity – Impact of Internet

• For one of the industries below, assess how the Internet has changed the competitive forces, e.g. has it increased or decreased power of suppliers and customers?

• Industries:– Banking– Supermarkets– Oil industry– Rail industry

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Elements of strategic objective setting for the e-business

Figure 5.11 Elements of strategic objective setting for the e-business

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Direct and indirect Internet contributions for fast growth companies in the US

Figure 5.12 Direct and indirect Internet contributions for fast-growth companies in the USA

Source: PricewaterhouseCoopers (2000)

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Grid of product suitability against market adoption for transactional e-commerce (online purchases)

Figure 5.13 Grid of product suitability against market adoption for transactional e-commerce (online purchases)

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Elements of strategy definition for the e-business

Figure 5.14 Elements of strategy definition for the e-business

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Strategic options for a company in relation to the importance of the

Internet as a channel

Figure 5.15 Strategic options for a company in relation to the importance of the Internet as a channel

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Assessment of risk for market and product development for the B2B company

Figure 5.16 Assessment of risk for market and product development for The B2B Company

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New product development – Smile online banking (www.smile.co.uk)

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Dabs.com (www.dabs.com)

Figure 5.18 Dabs.com (www.dabs.com)

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Elements of strategy implementation for the e-business

Figure 5.19 Elements of strategy implementation for the e-business

oht 5.1 © marketing insights limited 2004 chapter 5 e-business strategy

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