Scope of e-commerce. Learning objectives What is e-commerce? What are the e-challenges? What are the...
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Transcript of Scope of e-commerce. Learning objectives What is e-commerce? What are the e-challenges? What are the...
Scope of e-commerce
Learning objectives• What is e-commerce?
• What are the e-challenges?
• What are the strategies for e-commerce?
Learning objectives• What is e-commerce?
• What are the e-challenges?
• What are the strategies for e-commerce?
E-commerce definitionTechnology-enabled transactions and technology-mediated exchanges of digitized information between parties (individuals or organizations) as well as the electronically based intra-organizational or inter-organizational activities that facilitate such exchanges
E-commerce definitionScope of e-commerce:
1. Exchange of digitized information
2. Technology-enabled transactions
3. Technology-mediated relationships
4. Intra- & inter-organizational activities
E-commerce definition
B2B B2B C2B C2B
B2C B2C P2P P2P
Business Consumers
Business originating from . . . B
usi
nes
s C
on
sum
ers
An
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elli
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to
. .
.
E-commerce categories
Publishers order paper supplies from paper
companies
Amazon orders from publishers
Publishers order paper supplies from paper
companies
Amazon orders from publishers
Consumers aggregate to bulk purchase from Amazon
Consumers aggregate to bulk purchase from Amazon
Consumers buy thousands of Harry Potter books from
Amazon
Consumers buy thousands of Harry Potter books from
Amazon
Business Consumers
Business originating from . . . B
usi
nes
s C
on
sum
ers
An
d s
elli
ng
to
. .
.
Consumers resell copies on eBay
Single chain (or converging categories) of e-commerce
E-commerce definitionE-COMMERCE vs TRADITIONAL COMMERCE Key elements E-commerce Traditional commerce Value Creation Information Product/Service Strategy Sense and respond
Simple rules Classical
Competitive edge Speed Quality/Cost Competitive force Low barriers of entry
Power of customers Power of suppliers Product substitution
Resource focus Demand side Supply side Customer interface Screen-to-face Face-to-face Communication Technology-mediated channels Personal Accessibility 24 x 7 Limited time Customer interaction
Self-service Seller influenced
Consumer behavior Personalization One-to-one marketing
Standardization Mass/one-way marketing
Promotion Word of mouth Merchandising Product Commodity Perishables, feel & touch
E-commerce definition1995-2000Innovation
2001-2006 Consolidation
2006-future Reinvention
Technology-driven Business-driven Audience, customer, community-driven
Revenue growth focus Earnings & profits focus Audience & social network growth focus
Venture capital financing Traditional financing Merger & acquisition
Entrepreneurial Traditional/old economy Large pure Web-based firms
Disintermediation Strengthening intermediaries
Proliferation of small online intermediaries
Perfect markets Imperfect markets, brands, network effects
Online market imperfections
Pure-play Bricks & clicks New market (pure play); Retail (bricks & clicks)
First-mover advantages Strategic follower New market (1st mover)
Learning objectives
• What is e-commerce?
• What are the e-challenges?
• What are the strategies for e-commerce?
Role of e-commerce managers
EntrepreneurshipEntrepreneurship
Strategic Management
Strategic Management
TechnologyTechnology New MediaNew Media
AccountingAccounting Operationsand Logistics
Operationsand Logistics
FinanceFinance MarketingMarketing
Role of e-commerce managers
Set VisionSet Vision
Establish GoalsEstablish Goals
Formulate Strategy
Formulate Strategy
Drive Implementation
Drive Implementation
Be Accountablefor Performance
Be Accountablefor Performance
Role of e-commerce managersVision: higher-order societal effects
Goals: performance targets that are measurable and in line with the company’s strategy & business life cycle (process vs outcome)
Strategy: tradeoffs
Implementation: technology & media knowledge
Accountability: performance & results
E-commerce challengesUnderstanding customer evolution
– Invest ahead of customer needs
Charting changing technology– Match technology choices to consumer tastes
Weathering the storm– Reassure stakeholders with clear vision, sensible business
model, and profitable venture
Integrating offline & online activities– Align offline & online business activities, esp. advertising,
branding, retail & online store design, service, warranties, returns (customer-facing activities)
Identifying key levers of competitive advantage– Reallocate resources as competitive advantage levers evolve
Expanding globally– Deal with complex internationalization issues
Learning objectives
• What is e-commerce?
• What are the e-challenges?
• What are the strategies for e-commerce?
E-commerce strategies
ImplementationImplementation
Internal (Company) Analysis
Internal (Company) Analysis
External Analysis
External Analysis
Control and
Monitoring
Control and
Monitoring
Strategy Formulation
Strategy Formulation
Corporate Business Unit Functional Operating
ObjectivesObjectives
MissionMission
Classical Strategic Planning
E-commerce strategiesSense and respond
• Experimenting with intuitive, actionable, easy to implement ideas
• Proactively soliciting feedback from customers
Type Purpose Example
How-to rules They spell out key features of how a process is executed - "What makes our process unique?"
Akamai's rules for the customer service process: staff must consist of technical gurus, every question must be answered on the first call or e-mail, and R&D staff must rotate through customer service.
Boundary rules They focus managers on which opportunities can be pursued and which are outside the pale.
Cisco's early acquisitions rule: companies to be acquired must have no more than 75 employees, 75% of whom are engineers.
Priority rules They help managers rank the
accepted opportunities.
Intel's rule for allocating manufacturing capacity: allocation is based on a product's gross margin.
Timing rules They synchronize managers with the pace of emerging opportunities and other parts of the company.
Nortel's rules for product development: project teams must know when a product has to be delivered to the leading customer to win, and product development time must be less than 18 months.
Exit rules They help managers decide when to pull out of yesterday’s opportunities.
Oticon's rule for pulling the plug on projects in development: if a key team member-manager chooses to leave the project for another within the company, the project is killed.
Simple rules
E-commerce strategiesPosition approach
Where should we be?
Resources approachWhat should we be?
Simple rules approachHow to get there?
E-commerce strategies Position Resources Simple Rules
Strategic Logic Establish position Leverage resources Pursue opportunities
Strategic Steps
Identify an attractive market
Locate a defensible position
Fortify and defend
Establish a vision Build resources Leverage across markets
Jump into the confusion Keep moving Seize opportunities Finish strong
Strategic Question Where should we be? What should we be? How should we proceed?
Source of Advantage Unique, valuable position
with tightly integrated activity system
Unique, valuable, inimitable resources
Key processes and unique simple rules
Works Best In Slowly changing, well-
structured markets Moderately changing, well-
structured markets Rapidly changing,
ambiguous markets
Duration of Advantage Sustained Sustained Unpredictable
Risk It will be too difficult to
alter position as conditions change
Company will be too slow to build new resources as conditions change
Managers will be too tentative in executing on promising opportunities
Performance Goal Profitability Long-term dominance Growth
E-commerce strategies
Framing the Market
Opportunity
Framing the Market
Opportunity
Business
Model
Business
Model
Customer
Interface
Customer
Interface
MarketCommunication
and Branding
MarketCommunication
and Branding Implementation
Implementation Metrics
Metrics
E-commerce strategy formulation process