Electronic Commerce Strategy

Management 493L

April 1, 2002

Professor Kleist

Why have an electronic commerce strategy?

Objectives for Today’s Class: Why use electronic commerce? Benefits of electronic commerce Ecommerce business strategies Planning for ecommerce Issues of Web marketing Competitive, strategic advantage from electronic

commerce Discussion of business strategies of ecommerce

from readings for today Internet Building Blocks

Why use electronic commerce?

Fundamental change in the way businesses interact with each other

Not a fad, but the use of electronic mechanisms to distribute information and provide business customer support

Benefits to consumers (horizontal) Benefits to business (vertical)

Benefits to Electronic Commerce (Greenstein and Feinman 2000, p. 3, direct quote)

Internet and web-based electronic commerce is more affordable than traditional EDI

Internet and web-based electronic commerce allows more business partners to be reached than with traditional EDI

Internet and web-based electronic commerce can reach a more geographically dispersed customer base

Procurement processing costs can be lowered reductions in inventories lower cycle times better customer service lower sales and marketing costs

Reasons to Move to EC (Amor, 2000, P. 12)

Expand market reach Visibility Responsiveness New Services Strengthen business relationships Cost- Reduction Channel Conflicts

Ecommerce Business Strategies

Ecommerce Business Strategies

How much business on web in next 12 months, two years?

Fully digital, web based business, or just fourth channel for your firm (e.g., face to face, telephone or mail)?

How fast is the company going to grow? What are your expectations for return on

investment? Cost reduction?

Planning for Ecommerce (Amor, 2000, p. 59,

131-135)

Find a champion Plan for change Define a pilot project Estimate the costs Measure productivity Re-engineer business processes Learn as you go Prepare for resistance Prepare for disaster Create a dark site

Issues of Web Marketing (Amor, 200, p. 137)

Brands Change Conciseness Dynamic Sites Finances Free Givaways Global Village Color schema File size

Live Events Niche Markets Promotion Syndication Technology Feedback FAQ Navigation Aids

Why is the web so compelling in a marketing sense? (Bruner 1998, Chapter 2)

Interactive Personal Infocentric Instantaneous Measurable Flexible Interlinked Economical Resources

Enterprise.com: Market Leadership in the Information Age (Papows 1998)

The Network Centric Era and the Changing Workplace The Web: Forger of the New IT Economics The Web/Virtual Office Based Era The Market Facing Enterprise Knowledge Management: The Sustainable

Competitive Advantage Converging and Transforming Industries The Great American Economic Surprise The Race For Global Leadership

New Rules for the New Economy(Kelly, 1998)

Embrace the swarm Increasing returns Plentitude, not

scarcity Follow the free Feed the web first

Let go at the top From places to

spaces No harmony. All flux Relationship tech Opportunities before

efficiencies

Sample Strategic EC Firms(Ware, et al.

1998)

Cybergold Inktomi Levi Strauss Ford Motor

Company Silicon Graphics McKesson, Inc. Cisco Systems, Inc.

Virtual Vineyards, Inc.

Mpath Interactive Onsale, Inc. The Gap, Inc. Marshall Industries,

Inc. MCA/Universal

Outlook for the Future (based on Amor, Chapter 16)

Consumer devices Privacy and Security Next Generation Internet Brokers Total automation of business Social impacts Electronic commerce vs. .coms

Discussion: Answer one of the following questions using

either today’s readings or the current periodicals distributed in class, and be able to defend your answer with a concrete example. Discuss what aspects of web marketing are also in evidence in your article or website. How can electronic commerce reduce inventory costs? How can electronic commerce reduce production cycle

time? How can electronic commerce enhance customer

service? How can electronic commerce help a firm reach its

customers in a very low-cost fashion? Does Internet access make employees more or less

productive? Give an example of electronic commerce in the supplier’s

value chain.

Internet Building Blocks (PriceWaterhouseCoopers, 2001 Technology Forecast)

Applications Programming Interfaces Server side programming languages and

environments Web Server Products Improving Web server performance Client side technologies Schemas, frameworks and vocabularies Internet related products and services

Applications Programming Interfaces (PriceWaterhouseCoopers, 2001 Technology Forecast)

Apache CGI API Oracle Request Broker Netscape Server API

Server Side Programming (PriceWaterhouseCoopers, 2001 Technology Forecast)

Java Perl ASP ColdFusion VB Personal Home Page Python

Web server products (PriceWaterhouseCoopers, 2001

Technology Forecast)

Apache Microsoft IIS Iplanet IBM/Lotus Domino

Improving Web Server Performance (PriceWaterhouseCoopers, 2001 Technology Forecast)

Caching Web balancing SSL Accelerators

Client Side Technologies (PriceWaterhouseCoopers, 2001 Technology Forecast)

Browser Plug-ins Markup languages SGML XML JavaScript Java ActiveX

Schemas, Frameworks and Vocabularies (PriceWaterhouseCoopers, 2001 Technology Forecast)

XML Schemas Extensible Business Reporting

Language DSML XAML eBRL

Internet Related Products and Services (PriceWaterhouseCoopers, 2001 Technology Forecast)

Streaming audio and video IP Multicasting Mbone Voice over Ip Cisco’s AVVID