Chapter 11 - Study Guide

Copyright 2012 Pearson Education, Inc., Publishing as Prentice Hall

Chapter 11 E-Commerce Strategy

As you read the textbook and go through this lesson, think about the following

questions:

What are some key questions a company should ask when formulating an e-

strategy?

What forces can endanger a company's position in a given industry?

What are the key steps of the strategic planning process?

What is a business plan and why is it important?

What is cost benefit analysis? What is return on investment (ROI)?

What are metrics?

Why might it be difficult to measure e-commerce success?

What or who are the key players in e-commerce success?

What are the benefits and barriers to global e-commerce?

How can an e-commerce enterprise ensure that it is in compliance with legal

regulations?

What is intellectual property and how has the Internet impacted this area of

the law?

What are some typical ethical issues that have arisen as a result of the

Internet?

How has the Internet impacted our rights to privacy and freedom of speech?

Upon completion of this chapter, you will be able to:

1. Describe the strategic planning process.

2. Describe the purpose and content of a business plan and a business case.

3. Understand how e-commerce impacts the strategic planning process.

4. Understand how to formulate, justify, and prioritize EC applications.

5. Describe strategy implementation and assessment, including the use of metrics.

6. Evaluate the issues involved in global EC.

7. Analyze the impact of EC on small and medium-sized business.

Answers to Pause/Break Section Review Questions

Section 11.1 Review Questions

1. What is strategy?

A strategy is a broad-based formula for how a business is going to compete, what

its goal should be, and what plans and policies will be needed to carry out those

goals. The elements of a strategy include forecasting, resource allocation, core

competency, environmental analysis, company analysis, and business planning.

2. Describe the strategic planning process.

Strategic planning is used to direct a companys long term goals. The process is a cycle of assessment, initiation, formulation, and implementation.

3. Describe the four phases of strategic planning.

The four phases include strategy initiation, strategy formulation, strategy

implementation, and strategy assessment. Strategy initiation is the decision to

implement at goal, while strategy formulation provides the high-level steps to reach

it. Strategy implementation is the operational actions that execute the plan, and

assessment evaluates how closely the end product matches the goal, and how well

it was executed.

Strategy initiation - The initial phase of strategic planning in which the organization examines itself and its environment.

Specific outcomes:

Value proposition - The benefit that a companys products or services are provided to a company and its customers.

Core competencies

Forecasts

Competitor (industry) analysis

Strategy formulation - The development of strategies to exploit opportunities and manage threats in the business environment in light of

corporate strengths and weaknesses.

Specific activities and outcomes:

Business opportunities

Cost-benefit analysis

Risk analysis, assessment, and management

Business plan

Strategy implementation -The development of detailed, short-term plans for carrying out the projects agreed on in strategy formulation.

Specific activities and outcomes:

Project planning

Resource allocation

Project management

Strategy assessment - The continuous evaluation of progress toward the organizations strategic goals, resulting in corrective action and, if necessary, strategy reformulation.

4. Why is a cyclic approach to strategic planning required?

It allows business decision makers to evaluate and react to the success of past

decisions.

5. Describe four tools that can be used for strategic planning.

SWOT analysis

Competitor analysis grid

Scenario planning

Return on investment

Balanced scorecard

6. What is a strategy map and how does it help in the strategic planning

process?

A tool that delineates the relationships among the key organizational objectives

for all four BSC perspectives.

7. What is a business case and how is it different from a business plan?

Business plan - A written document that identifies a companys goals and outlines how the company intends to achieve the goals and at what cost.

Business case A business plan for a new initiative or large, new project inside an existing organization.

A business case is different from a business plan in that it does not contain all of

the operational specifics.


1. What is an E-Commerce strategy? (EC strategy)

The formulation and execution of a vision of how a new or existing company

intends to do business electronically.

2. Describe the process of deriving an EC strategy.

The process begins with a business strategy which gives way to an IS strategy

which includes the ICT strategy. The EC strategy is formed from both the IS and

ICT Strategies.

3. Describe the role of the Internet in setting EC strategy.

The internet can be used in multiple ways as strategy is created. Most notably, it

can be used for competitive/market research as well as for analysis of potential

solutions and plans.

4. How should the Internet and EC be considered by business strategic planners?

By IS strategists? By ICT planners?

Strategic planners need to understand the evolving and disruptive nature of the

Internet and EC in ways that can help or hinder a company. Information systems strategists need to consider the Internet as a tool for collecting and distributing

information to where it is required. ICT planners will need to plan the integration of

the Internet-based technologies into the existing ICT infrastructure. Thinking about

and planning for the Internet should be subsumed into each of the three strategy

levels (McKay and Marshall 2004).


1. Describe the advantages, risks, and success factors that first movers face.

First movers have the advantage of being the first to a market and being able to

define it. At the same time, first movers may spend a great deal of time and money

advertising and defining the market, to be beaten by a later entrant. Successful first

movers must understand their segment and its possibilities in advance, and then

have the ability to defend their position.

2. What are the advantages and disadvantages of creating a separate online

company?

Companies may benefit from separate online firms if they need to create separation

or discipline within the online group. Additionally, this may allow them to

establish a separate, more appealing brand. Conversely, creating a separate

company isolates the new firm from the benefits of the existing firm.

3. Why would an existing company want to create a new brand for its e-

commerce initiative?

It will depend on the relative strength and positioning of the existing brand versus

the possibilities and costs of a new brand. A new brand may not have the

connotations of the old brand, or can protect the old brand by not associating it with

the new entrant.

4. What strategic benefits are associated with using social networks?

They allow a business to better access customers for sales, feedback and research.


1. Describe how a company should not select EC applications.

EC applications should not be decided without the benefit of analysis and planning.

Selecting applications based on whims or individual options is not suggested.

2. Explain Tjans Internet portfolio map.

Tjan (2001) adapted the Boston Consulting Groups approach to create what he calls an Internet portfolio map. Instead of trading off market potential and market share, different EC projects are rated on both their applicability for the company

(fit) and their potential for success (viability), both of which can be either low or

high.

3. List four sources of business risk in EC. What questions exemplify each source

of risk?

Risk is inherent in all business activities, and especially when organizations are

moving into new territory, as an e-commerce strategy inevitably implies. Managing

that risk is a process of analyzing the risk factors and then taking the steps

necessary to reduce the threat to the business from that risk. Examples of risks

include:

Partner risk Can I succeed without my partner? HR risk How dependant am I on personnel? Security Can I protect my intellectual property? Exchange rate Will changes in exchange rates hurt my margins?

4. Discuss three strategies for smarter pricing online.

Traditional methods for determining price are the cost-plus and competitor models.

Cost plus means adding up all the costs involvedmaterial, labor, rent, overheads, and so forthand adding a percentage mark-up as profit. The competitor model determines price based on what competitors are charging for similar products in the

marketplace. Another strategy is to create multiple versions of a product, and vary

the pricing by channel (as opposed to product attributes).

INTELLECTUAL PROPERTY AND OTHER REGULATORY ISSUES

LAWS ARE SUBJECT TO INTERPRETATION

PERSONAL AND PROPERTY RIGHTS

Civil litigation - An adversarial proceeding in which a party (the plaintiff) sues another party (the defendant) to get compensation for a wrong

committed by the defendant.

Regulatory compliance - Systems or departments in an organization whose job is to ensure that personnel are aware of and take steps to comply

with relevant laws, standards, policies, and regulations.

Compliance data - All data belonging or pertaining to an enterprise included in the law, which can be used for the purpose of implementing or

validating compliance.

INTELLECTUAL PROPERTY - Creations of the mind, such as inventions, literary and artistic works, and symbols, names, images, and

designs, used in commerce.

Copyright - An exclusive right of the author or creator of a book, movie, musical composition, or other artistic property to print, copy, sell, license,

distribute, transform to another medium, translate, record, perform, or otherwise

use.

Infringement - Use of the work without permission or contracting for payment of a royalty.

Digital rights management (DRM)- An umbrella term for any of several arrangements that allow a vendor of content in electronic form to control the

material and restrict its usage.

Fair use - The use of copyrighted material for noncommercial purposes.

Patent - A document that grants the holder exclusive rights to an invention for a

fixed number of years.

Trademark - A symbol used by businesses to identify their goods and services;

government registration of the trademark confers exclusive legal right to its use.

Ethics - The branch of philosophy that deals with what is considered to be right

and wrong.

Business ethics - A form of applied ethics that examines ethical principles and

moral or ethical problems that arise in a business environment.

EC ETHICAL ISSUES

Nonwork-Related Use of the Internet

Codes of Ethics

Privacy - The right to be left alone and free of unreasonable personal intrusions

PRIVACY RIGHTS AND PROTECTION

opt-out - Business practice that gives consumers the copportunity to refuse

sharing information about themselves.

opt-in - Agreement that requires computer users to take specific steps to allow

the collection of personal information.

FREE SPEECH ONLINE VERSUS PRIVACY PROTECTION

Free Speech Online Versus Child Protection Debate

Childrens Internet Protection Act (CIPA) - U.S. law that mandates the use of filtering technologies in schools and libraries that receive certain types of federal

funding.


1. Describe a Web (project) team and its purpose.

A web team is a formal or informal interdisciplinary group that is charged with the

execution of an EC project or role-out. The team is usually lead by a defined team

lead, but also requires a project champion who can ensure that the team receives the

organizational support necessary to succeed. In creating a Web (project) team, the

organization should carefully define the roles and responsibilities of the team

leader, team members, Web master, and technical staff. The purpose of the Web

team is to align business goals and technology goals to implement a sound EC plan

with available resources.

2. What is the role of a project champion?

The project champion is the person who ensures that the project gets the time,

attention, and resources required and defends the project from detractors at all

times. The project champion may be the Web team leader or a senior executive.

3. What is the purpose of a pilot project?

Pilot projects help uncover problems early, when the plan can easily be modified

before significant investments are made.

4. Discuss the major strategy implementation issues of application development,

partners strategy, business alliances, and BPR.

Implementation of an EC application requires access to the Web, construction of

the Web site, and integration of the site with the existing corporate information

systems (e.g., front end for order taking, back end for order processing).

Another important issue is that many EC applications involve business partnersASPs, ERP vendors and consultants, and ISPswith different organizational cultures and their own EC strategies and profit motives.

At a higher level of cooperation and trust than a partnership is a business alliance.

Specifically, the EC strategic planning process may identify a strategic opportunity

that is larger than the organization itself.

Business process reengineering (BPR) is a methodology for conducting a

comprehensive redesign of an enterprises processes. Generally, BPR can help to create efficiencies to increase productivity and/or save costs, but this is generally

coupled with changes and reorganizations that may be met with hostility.

5. Describe BPM and the need for it in EC development.

Business Process Management refers to management activities that help improve

business processes. It is important to EC because more effective processes help

make EC more efficient.


1. Describe the need for assessment.

Strategy assessment includes both the continual assessment of EC metrics and the

periodic formal evaluation of progress toward the organizations strategic goals. Assessment is critical to understand the effectiveness of operations so that future

planning can be more accurate.

2. Define metrics and their contribution to strategic planning.

Each company measures success or failure by a different set of standards. A metric

is a specific, measurable standard against which actual performance is compared.

By identifying and using metrics in planning, the firm can clearly identify and track

goals to be achieved.

3. Describe the corporate performance dashboard approach to strategy

assessment.

This method seeks to identify and categorize several significant metrics across a

variety of operational areas. By monitoring these metrics consistently (in a

dashboard) upper management is able to evaluate the overall health and progress within an organization quickly and frequently.

4. What is a balanced scorecard?

The balanced scorecard is both a performance measurement and a management

methodology that helps an organization translate its financial, customer, internal

process, learning, and growth objectives and targets into a set of actionable

initiatives.

5. Define Web analytics.

The analysis of click-stream data to understand visitor behavior on a Web site.


1. Describe globalization in EC and the advantages it presents.

Globalization provides the opportunity for EC businesses to serve not only their

traditional geographic markets, but potentially the entire world.

2. Describe the major barriers to global EC in each dimension of the CAGE

framework.

Cultural language and cultural differences, preferences

Administrative legal issues, trade barriers, privacy protection

Geographical logistics, bandwidth

Economic taxation, regulation, payment systems

3. What can companies practicing global EC do to overcome the barriers to

global EC?

There are several possible ways to remove barriers to global EC some of them

include: valuing human touch, being strategic, knowing your audience, using Web

advantages, proper integration, flexible site design, and synchronized content.

4. Discuss the pros and cons of a company offering its Web site in more than

one language.

The company will be able to address a larger market, but will have to maintain

several Web site versions and may confuse the primary market.

GLOBAL EC

BENEFITS AND EXTENT OF OPERATIONS The major advantage of EC is the ability to do business at any time, from anywhere, and at a reasonable cost.

BARRIERS TO GLOBAL EC Cultural Issues and Language Translation Machine Translation of Web Pages Administrative and Legal Issues Geographic Issues and Localization Economic and Financial Issues

BREAKING DOWN THE BARRIERS TO GLOBAL EC Be strategic Know your audience Localize Think globally, act consistently Value the human touch Clarify, document, explain Offer services that reduce barriers


1. What are the advantages/benefits of EC for small businesses?

There are several potential advantages, the largest being flexibility and mobility.

2. What are the disadvantages or risks of EC for small businesses?

There are several potential disadvantages, the largest being the inability to compete

at a large scale and potential high entry costs.

3. What are the advantages and disadvantages for small businesses online?

Some of the critical success factors include appropriate capital investment, low

inventory levels, secure electronic payments, flexible payment methods,

appropriate logistical services, search engine placement, membership in online

mall, and proper Web site design.

4. How can social networks help SMEs become more competitive?

Social networking sites are a particularly good fit for smaller businesses because

SMEs often do not have a peer group nearby with which to discuss relevant

topics. On the Internet, SMEs would turn to a community site catering to small

businesses that provides them with access to peers, information on starting up,

and advice.

Small-Medium Sized Business Enterprises

Some of the first companies to take advantage of Web-based electronic commerce were SMEs

SMEs consider the Internet to be a valuable business tool

STRATEGY AND THE WEB ENVIRONMENT

Porters Competitive Forces Model and Strategies 1. Threat of entry of new competitors

2. Bargaining power of suppliers

3. Bargaining power of customers or buyers

4. Threat of substitute products or services

5. Rivalry among existing firms in the industry

JUSTIFICATION AND COST-BENEFIT ANALYSIS

Companies need to justify their EC investments as part of strategy formulation

in order to achieve the optimal level of investment

OTHER REASONS WHY EC JUSTIFICATION IS NEEDED EC is not necessarily the solution to all problems

Formal evaluation of requests for funding mandated Need to assess the success of EC projects after completion Success of EC projects assessed in order to pay bonuses Pressure from top management Large amount of money Weak business conditions exist

EC INVESTMENT CATEGORIES AND BENEFITS

HOW IS AN EC INVESTMENT JUSTIFIED? cost-benefit analysis - A comparison of the costs of a project against the benefits.

WHAT NEEDS TO BE JUSTIFIED? WHEN SHOULD JUSTIFICATION TAKE PLACE?

USING METRICS IN EC JUSTIFICATION Metric - A specific, measurable standard against which actual performance is compared.

Key performance indicators (KPIs) - The quantitative expression of critically important metrics.

DIFFICULTIES IN MEASURING PRODUCTIVITY AND

PERFORMANCE GAINS

Data and Analysis Issues EC Productivity Gains May Be Offset by Losses in Other Areas Incorrectly Defining What Is Measured Other Difficulties

DETERMINING E-COMMERCE SUCCESS

Product Characteristics Industry Characteristics Seller Characteristics Consumer Characteristics

EC Application Case 11.1: FOCUSING ON QUALITY

OVER QUANTITY AT WARNER MUSIC GROUP Questions

1. Why did WMGs strategy shift to quality?

It allows for greater control over partners and the types of arrangements

implemented.

2. Why did it develop a deal with YouTube? Is this a strategic alliance?

It is a strategic alliance. WMG benefits from YouTubes userbase, and YouTube gains access to additional content.

3. Why did WMG start its digital-oriented strategy?

The company needed to adapt to changes in technology.

4. Explore the ad arrangement with Outrigger. Does it make sense? Why?

Student research will vary. Currently internal ads at http://www.outrigger.com/

are arranged vertically on the right of the homepage. It seems to make sense and

is part of the overall site design.

EC Application Case 11.2: Measuring Profit on the Web Questions

1. List four areas in which Axon is demonstrating increased profitability through

the use of the Web.

Selling costs were reduced by 40 percent for each dollar of margin generated

Call volume to sales support increased at less than 50 percent of the traditional rate

Warehouse space was reduced by 40 percent, while volume increased by 40 percent

Obsolete stock write-offs as percentage of revenue were reduced by 93 percent

2. Describe the characteristics of the metrics listed here (e.g., financial, customer

service, quantitative, time based).

Of the metrics listed, all seem to show progress in each tangible area. For example:

Cost Avoidance selling costs were reduced by 40 percent for each dollar of margin generated

Customer Service Average days to delivery were reduced by 20 percent over 2 years

New Markets Product revenue increased over 40 percent in first 12 months of full operation

New Media Cost per item for e-mail is less than 1 percent of the cost per item for postal mail

3. What other metrics might apply (Hint: Consult Chapter 14)?

Student responses will vary.

Answers to Discussion Questions

1. How would you identify competitors for a small business that wants to launch

an EC project?

The business would have to define the industry it is currently in and then begin to

evaluate other firms that are part of that industry.

2. How would you apply Porters five forces and Internet impacts in Exhibit 12.3 to the Internet search industry, as described in the opening case?

Student answers will vary. Students will have different opinions on the relative

strengths in the industry.

3. Why must e-businesses consider strategic planning to be a cyclical process?

Because the plan must be continually revisited during the business cycle.

4. How would you apply the SWOT approach to a small, local bank evaluating its

e-banking services?

The bank would have to examine the four points of the model including its

strengths, weaknesses, opportunities, and threats in the e-banking area.

5. Offer some practical suggestions as to how a company can include the impact

of the Internet in all levels of planning.

Student responses will vary. Students will have different opinions based on their

experiences.

6. Amazon.com decided not to open physical stores, whereas First Network

Security Bank (FNSB), which was the first online bank, opened its first physical

bank in 1999. Compare and discuss the two strategies.

Student answers will vary. Answers may center on the benefits of pure electronic

commerce and the benefits of click-and-mortar operations. Additionally, the

expectations of these two different industries may be considered.

7. Discuss the pros and cons of going global with a physical product.

The major advantage of global sales is the expanded potential market. The

disadvantages include global logistics and potential localization of the product.

8. For each part of the CAGE framework, briefly discuss one barrier that may

negatively impact e-commerce companies doing business globally.

Student responses will vary based on their opinions of the barriers.

9. Find some SME EC success stories and identify the common elements in them.

Students answers will vary based on the story selected.

10. Submit three questions regarding EC strategy for small business to the

Small Business Expert (free) at

smallbusinessanswers.yahoo.com/?fr=bps737888. Summarize your experience.

Student research and results will vary.

11. After viewing the video FiftyOne Global Ecommerce Demo (youtube.com/watch?v=2YazivwAm2o&feature=related) consider the following:

Fifty-One claims to address all the issues associated with currency conversion, fraud screening, payment processing, customer brokering,

international freight forwarding, destination country delivery, and in-country

returns management.

a. Discuss how a company embarking on global e-commerce would

approach each of these challenges without the assistance of a company

like Fifty-One.

b. Would these challenges be insurmountable? For each challenge,

explain why or why not.

c. Would the type or size of a business affect whether it could successfully

navigate these challenges to global e-commerce? Explain your

conclusions.

Student research and results will vary. This is an interesting video with details that

students will respond to differently.

Topics for Class Discussion and Debates

1. Has the availability of EC affected the way we assess industry attractiveness?

Consider whether Porters five forces still apply in an EC setting and develop new criteria for assessing the attractiveness of online industries.

Student research and opinions will vary. Students opinions on the strength of

companies will be addressed.

2. Consider the challenges of a brick-and-mortar company manager who wants

to create an integrated (online/offline) business. Discuss the challenges that he

or she will face.

Student research and opinions will vary. The discussion will focus on the

advantages of a larger operation versus the operations needed to sustain it.

3. As the principles in a small business that already has an effective Web

presence, you are considering taking your company global. Discuss the main

issues that you will have to consider in making this strategic decision.

Student research and opinions will vary. The discussion will focus on issues such

as localization and logistics.

4. Examine the seven strategies of Facebook and Twitter at

socialmediatoday.com/christinegallagher/165536/top-7-facebook-and-twitter-

strategies and comment on them.

Student research and opinions will vary. The seven listed strategies are:

1. Find your peeps.

2. Concentrate on conversing and building relationships, instead of broadcasting

and selling.

3. Use a Facebook personal profile AND a Facebook business page TOGETHER.

4. Cross-post and cross promote.

5. Use a social media dashboard like Hootsuite and other productivity tools to

accomplish more in less time.

6. Get them on the list..

7. Measure and track your social media results.

5. Debate: Is Google Translate good for the translation of Web sites?

Student research and opinions will vary based on their experiences with the

software. Perceived effectiveness will depend on the language (Spanish is good,

Japanese is poor) and the accurately desired by the user.

6. Is Amazon eBays biggest challenge? (See Ackerman 2008.) What about Walmart.com?

Student research and opinions will vary based on personal perceptions.

7. Debate whether you think that the Internet has changed (or will change) the

strategy of organizations that deliver distance education. Discuss the new value

that is created for them by EC. How can organizations offering e-learning

opportunities capture this value? Develop a list of examples.

Student research and opinions will vary based on personal perceptions.

8. Debate whether group members think that the customer gains more value

from EC than the company. Discuss both sides of the issue of whether

companies profit by the use of EC to the same extent that customers do. Support

your side of the debate by providing some examples.

Student research and opinions will vary. The debate will focus on the relative

benefits to consumers and businesses. Consumers benefit from selection and

possibly deals, companies access larger markets and are not tied to geographic

locations.

9. Debate: Will Facebook Places crush Foursquare in the location-based

competition? Why or why not?

Student research and opinions will vary. The debate will focus on current and

possible future features, and how the market will respond to them.

Internet Exercises (Note: URLs may change over time; please check the Internet Exercises on

the Turban Web site for possible updates:

www.pearsonhighered.com/turban.)

1. Survey several online travel agencies (e.g., travelocity. com, orbitz.com,

cheaptickets.com, priceline.com, expedia.com, bestfares.com, and so on) and

compare their business strategies. How do they compete against physical travel

agencies? (See Chapter 18.)

Student reports will vary based on the sites selected. Generally these sites can

provide self-service at a lower cost, but cannot match the service and possibly

knowledge of agents.

2. Enter digitalenterprise.org and find Web metrics. Read the material on metrics

and prepare a report on the use of metrics for measuring advertising success.

Student reports will vary based on the types of metrics selected. In general,

different metrics can be used to track the success of marketing. Some metrics may

include views, click-throughs and sales.

3. Check the music CD companies on the Internet (e.g., cduniverse.com,

musica.co.uk). Do any companies focus on specialized niche markets as a

strategy?

Student reports will vary based on the time of report and sites selected.

4. Enter ibm.com/procurement and go to the e-procurement section. Prepare a

report on how IBMs Supplier Integration Strategy can assist companies in implementing an EC strategy.

Student reports will vary based on the time of report.

5. Compare the following search engines: google.com, search.yahoo.com,

search.ask.com, and mooter.com. Conduct a comparative search (i.e., search for

the same term at each site), learn more about how each search engine works

(e.g., click on about us or similar link), and look for comparative articles at Web sites such as searchenginewatch.com. Consider the strengths and

weaknesses of each site, when would one be more useful than another, and what

special features distinguish it in the search engine marketspace. Prepare a report

based on your findings.

Student reports will vary based on the services evaluated.

6. One of the most global companies is Amazon (amazon.com). Find stories

about its global strategies and activities (try google.com and forbes.com). What

are the most important lessons you learned?

Student reports will vary based on the content researched.

7. Visit business.com/guides/startup and find some of the EC opportunities

available to small businesses. Also, visit the Web site of the Small Business

Administration (SBA) office in your area. Summarize recent EC-related topics

for SMEs.

Student reports will vary based on the time of report.

8. Enter alloy.com and bolt.com. Compare the sites on functionality, ease of use,

message boards, homepage layout, and so on. Prepare a report based on your

findings.

Student reports will vary based on the services evaluated. Alloy.com is teen

fashion and gossip site with a variety of content, as well as social interaction. As of

November 2011, bolt.com was inactive.

9. Find out how Web sites such as tradecard.com facilitate the conduct of

international trade over the Internet. Prepare a report on your findings.

Student reports will vary based on the time of report. In general this service can be

used to rate the integrity of a business, and facilitate a transfer (and conversion) of

funds.

10. Conduct research on small businesses and their use of the Internet for EC.

Visit sites such as microsoft.com/smallbusiness/hub.mspx and uschamber.org.

Also, enter google.com or yahoo.com and type small businesses + electronic commerce. Use your findings to write a report on current small business EC issues.

Student reports will vary based on the time of the report and companies used.

11. Enter businesscase.com and review their products. What are the benefits of

CaseBuilder to people conducting e-commerce strategy development?

Student reports will vary based on their perception of the product.

12. Enter languageweaver.com and find the product they have for language

translation.

Student reports will vary based on the services evaluated.

13. Enter compete.com and identify all the services it provides, all lists, ranking,

marketing performance, and competitive intelligence reports it provides. Prepare

a list of the services and comment on their value to the merchants.

Student reports will vary based on the time of the report.

Team Assignments and Role Playing

1. Assignment for the Opening Case

Read the opening case and answer the following questions.

a. List and discuss the factors that are driving Travelocity to change its e-

strategy.

Commissions as airlines reduce commissions it affects revenues

Competition other entrants competing for customers

b. Considering the 14 dashboards that Travelocity has already created, come up

with two or three other dashboards that would be useful.

Student opinions will vary based on individual preference.

c. Share your experiences of using Travelocity with the group and discuss the

extent to which its e-strategy meets your personal needs.

Student opinions will vary based on the students experience.

2. Have three teams represent the following units of one click-and-mortar

company: (1) an off-line division, (2) an online division, and (3) top

management. Each team member represents a different functional area within

the division. The teams will develop a strategy in a specific industry (a group of

three teams will represent a company in one industry). Teams will present their

strategies to the class.

Student reports will vary based on the companies used.

3. The relationship between manufacturers and their distributors regarding sales

on the Web can be very strained. Direct sales may cut into the distributors business. Review some of the strategies available to handle such channel

conflicts. Each team member should be assigned to a company in a different

industry. Study the strategies, compare and contrast them, and derive a proposed

generic strategy.

Student reports will vary based on research and opinions.

4. Each team must find the latest information on one global EC issue (e.g.,

cultural, administrative, geographical, economical). Each team will offer a report

based on their findings.

Student reports will vary by the issue selected.

5. Enter stassmann.com and find 10 entries related to e-strategy (including

videos). Prepare summaries of them relating to this chapter.

Student reports will vary based on the issues used.

6. Compare the services provided by Yahoo!, Microsoft, and Web site Pros Inc. to

SMEs in the e-commerce area. Each team should take one company and make a

presentation.

Student reports will vary based on the time of the report.

7. Enter buzzle.com/editorials/9-21-2004-59556.asp and execute the three

exercises related to strategic e-commerce.

Student opinions and answers will vary based on the exercises used.

End-of-Chapter Real-World Case Questions: Pierre Lang Expands

Into Eastern Europe

1. What were the drivers for Jorgendens e-strategy?

Reduced business and a smaller supply of goods

2. What makes the e-commerce strategy at Portland Fish Exchange effective?

It increases efficiency through automation, and allows more customers to

participate.

3. Which strategic tools might have been used when formulating his e-business

solution?

He may have used a strategy map, business case and business plan.

4. In implementing the e-strategy, what issues needed to be considered?

Some examples include the needs of the stakeholders, the abilities of technology,

the preferences of buyers and relationships with sellers.

5. What risks might have been involved in setting up the online auctions at

Portland Fish Exchange?

Some examples include technical risks and market adoption risks.

Glossary

Balanced scorecard: A management tool that assesses organizational progress

toward strategic goals by measuring performance in a number of different areas

Business case: A business plan for a new initiative or large, new project inside an

existing organization

Business plan: A written document that identifies a company's goals and outlines

how the company intends to achieve the goals and at what cost

Business process management (BPM): Method for business restructuring that

combines workflow systems and redesign methods; covers three process

categoriespeople-to-people, systems-to-systems, and systems-to-people interactions

Business process reengineering (BPR): methodology for conducting a

comprehensive redesign of an enterprise's processes

Competitor analysis grid: A strategic planning tool that highlights points of

differentiation between competitors and the target firm

Corporate performance management: advanced performance measuring and

analysis approach that embraces planning and strategy, balanced Scorecards

Cost-plus: Adding up all the costs involved, such as material, labor, rent, overhead,

etc., and adding a percentage mark-up as profit

Disintermediation: The process by which the consumer bypasses the services of

an intermediary or intermediaries in the chain of distribution to purchase products

directly from those who supply or produce them

Key performance indicator (KPI): quantifiable measurement, agreed to

beforehand, that reflects the critical success factors of a company, department or

project

Metric: A specific, measurable standard against which actual performance is

compared

Project champion: person who ensures the EC project gets the time, attention, and

resources required and defends the project from detractors at all times

Scenario planning: A strategic planning methodology that generates plausible

alternative futures to help decision makers identify actions that can be taken today

to ensure success in the future

Strategy assessment: #4 monitor performance, compare, assess, improve, or adjust

Strategy formulation: #2 planning, cost-benefit, budget, risk analysis, business

plan

Strategy implementation: #3 project plan, resource allocation, scheduling teams

(what, who, when, where)

Strategy initiation: #1 company analysis, value proposition, competition, mission,

objectives, opportunities

Strategy map: A tool that delineates the relationships among the key

organizational objectives for all four BSC perspectives

Versioning: Selling the same good, but with different selection and delivery

characteristics

Web analytics: analysis of clickstream data to understand visitor behavior on a

website

Chapter 11 - Study Guide

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Transcript of Chapter 11 - Study Guide