Session E-Business Strategies and Success Factors.

Session

E-Business Strategies and Success Factors

Session Outline

Strategy Drivers E-mail Marketing Web Retailing E-marketplaces Intranet Virtual Organisations

This Session

Weekly Activity: Digital Business – Getting Online The Australian Government have a website: Digital

Business – Your Guide to Getting Online (www.digitalbusiness.gov.au).

Check out the e-commerce section. Answer the following: What are the e-commerce essentials? What are the Australian guidelines for electronic

commerce? What are the key rules and regulations related to

operating online? Word Count: 200 – 300.

Topic Example Video

The following video explains e-business strategies and tactics used in the hotel industry.

Take note of the key points. http://www.youtube.com/watch?

v=8uRu1AmzXQs

Creating an e-business Strategy

How to? Make it easy for customers to do

business Focus on the final customer Ensure e-business processes reflect

customers point of view Setup e-business organisational

architecture to be adaptive and flexible Foster e-customer loyalty, ie. E-crm

(erm)

What Else ?

E-Business is seen as a ‘Strategic Driver’It can either complement or substitute for Information System / Information Technology strategiesOne of the ‘unknowns’ especially in Information Technology is that the Business environment is changing, or does change, rapidlyIt is difficult to make ‘long term predictions’ - with accuracy and with certainty

What models exist ?1. Traditional Information System planning focuses on a ‘top down’ approach it may not be ‘opportunistic’ business goals define the technologies more detail = less scope for adopting new

opportunities long term predictions are difficult to predict and

assess

2. The use of Technology as a Strategy

Strategy Models

E-Business Planning Strategies

The two alternatives in Business Planning seem to be:

1. Strategy-driven Information Technology

2. Information Technology as a strategic driver

(also known as Top Down strategies and Bottom Up strategies)

E-Business Planning Strategies

Business Goals Business Goals

IS/IT decisions Strategy

Information

Technology

Decisions

Corporate

Strategy

Strategy-driven planning IS/IT as a Strategic Driver

Some businesses have adopted ‘new, leading edge technology’ and have gained a competitive advantageThis has become, in some cases, a sustainable advantageThe Web is a classic example of the the Technology arriving first and the uses evolving afterwards This is an opportunistic, and flexible, use of technology But is a repeat of the Web likely to occur again ?

E-Business Strategy Example

E-Business Strategy ExampleThere are dangers in this approach:1. It is ‘high risk’ 2. There are likely to be high failure rates3. Possibility of the technology not being fully exploited

But :-Those businesses which ‘succeed’ enjoy considerable advantages1. High returns2. Established as a ‘leader’3. Attract high quality staff4. Attract customers from competitors (and may keep them).

E-Business Strategy Summary

Characteristics Key Feature Technology Role Risk Rationality Gains (term) Adopt

Technology

A quick summary:-

Strategy Driven Planned Support Low to medium Highly rational Medium to long Post innovative

Technology Driven Opportunistic Business driver Medium to high Uncertainty Short to

medium Innovative

E-Business Models

Business Models:e-business has been credited with the emergence of new forms of business models (so were calculators when they were introduced, and so were spreadsheets).

The ‘models’ consist of the advertising model the online brochure transaction-based systems

E-Business Models

Brokerage Model "firms act as market makers who bring

buyers and sellers together for a fee for the transactions they enable"

Advertising model a company provides some attractive

content to bring in browsers. "The website owner usually makes money by charging advertisers fees for banners, permanent buttons and other ways.."

E-Business Models

Infomediary model "a firm collects valuable information on

consumers and their buying habits and sells it to firms which in turn mine it for important patterns and other useful information to help them better serve their customers"

Merchant model "the e-tailer model in which wholesalers and

retailers sell goods and services over the Internet"

E-Business Models

Community Model through to the merchant's site and buys

something, the affiliate is paid a fee". Sometimes the affiliate earns a fee just for the "click through" even if the customers does not end up buying "rests on community loyalty rather than traffic. Users have invested in developing relationships with other members of the community and are likely to visit the website frequently"

E-Business ModelsSubscription Model

"Members pay a subscription price and in return receive high-quality content". In reality, this model has not been too successful in 2001 and 2002 due to many alternative sites providing similar content free using the Advertising model. The only way this model works is if the content is VERY VERY good and cannot be seen for free on other sites.

Utility Model "activities are metered and users pay for the

services that they consume"

E-Business Models

Manufacturing model "manufacturers try to reach end users directly

through the Internet instead of going through a wholesaler or retailer" (in a B2B context)

Affiliate model "each time a visitor to an affiliate's site clicks

through to the merchant's site and buys something, the affiliate is paid a fee". Sometimes the affiliate earns a fee just for the "click through" even if the customers does not end up buying

E-Business – Electronic Brochure

Let’s look at 1 such model - the electronic brochure1. The simplest form of the ‘brochure’ is for a display only of products and services. Purchases and payments are by conventional methods - phone, fax, personal2. The brochure + ordering system. In addition to 1 above, the customer may order over the Internet, but payment is by phone, fax, personal3. The electronic brochure + ordering + payment systems. The customer is able to perform the full ‘transaction’ over the Internet

E-Business Structure

Organisational StructureThis is a component of the Business model.The structure should facilitate the implementation of the business objectivesFlat networks (as in an earlier lecture) should be able to respond more quickly to change than hierarchical structuresCommunication technologies are essential in the emergence of organisational structures

E-Business Management

Organisational Management

These range from cautious bureaucratic (accountability and

procedures) innovative (risk tolerant) entrepreneurial (unchartered waters, risk)

E-Business – Other Aspects

Some other aspects of business models to be aware of are : Distribution channel - how a product is delivered to

the consumer (CD, downloads) Partnerships and Alliances - An organisation could be

totally independent or engage in partnerships or alliances with other organisations

Marketing approach - May be seen as a separate component of the business model

Revenue stream - there may be one, or many, revenue streams

Business Model - Key Components

Strategy

Distribution

Marketing

Personnel

Partners &

Alliances

IS/ITInfrastructu

re

Customer

Service

ManagementStyle

Organisation

Structure

Product or

Service

Model Framework (5-S)

Structure (for relationships, ie. team based).

Staff (people dimension - training critical for managing the social structure).

Style (beliefs and actions determine overall philosophy and direction).

Systems (setting up relationship performance measures).

Schemes (relationship implementation support programs).

E-business Modes

Level of e-business

There are 5 broad modes of e-business:

1. Participating mode2. Supporting mode3. Expanding mode4. Assimilating mode5. Transformed mode

Note: many businesses will move on from one mode to the next but not all businesses will follow this path.

The ultimate goal is not whether a business has been transformed, but whether the business is enjoying the optimum benefits of e-business.

E-Business – Web Marketing

Marketing and Advertising on the Web:Uses :

Brand name marketingSales Information provisionProduct cataloguesProduct announcementsService announcements

Marketing systems require much planning, support and skills

Topic Example Video

The following video explains what is e-merchandising in the hotel industry.


v=txdBi37HcMw

Activity: E-merchandising

In groups of 3-4, go through each section of the report on e-merchandising, discuss and comment.

Thinking about the websites you are familiar with, explain how they could or not use e-merchandising to better enhance their credibility as well as increase sales revenue.

Could the organisation’s website you are investigating better benefit from an e-merchandising presence.

Words: 200 – 300.

Using the Web for E-Business

The web offers some ‘unique’ attributes:All customers can be accessed at onceAll customers can be informed at the

same level at the same timeLarge amounts of information can be

communicated cheaply and quicklyUsers can interact with the system‘Personalisation’ of information can be

done - i.e. altering a individual user web page

Web MarketingStrategic Web use is used to capture and increase the share of a particular market segment - a case is the advertising of credit cards at specific sites to attract different age groupsE-mail marketing - supported by databases of email addresses - BUT, the email header and content are designed to attract people’s attention (have you seen, or do you ‘subscribe’ to Amazon.Com mail ?‘Advanced’ examples of Web marketing allow for users to exchange information with other users - and there is another technique known as ‘online communities’.

Topic Example Video

The following video explains some web retailing tips.


v=5QYPTlO9TF0

Web RetailingWeb Retailing:Transaction based online shoppingA convenient service for consumers who can order products at a time a place of their choiceThese systems require a strategic plan, and a transaction support system (infrastructure - ? $$$’s)The systems need to deal with payments, link to corporate database systems (?) and provide customer support

A Question :What would be your strategy for the return of goods ?

Internet Auctions

Another Model - Internet Auctions(ebay.com.au is an example). Retail auction sites generate a level of competition to sell products in a cost-effective manner

How many bidders ?What is ‘cost effective’ ?Who controls the bidding ?

Internet Auctions

Some Real Estate Agencies list their products on or at Web sitesCould House (Property) Auctions be conducted ?What safeguards would be necessary ?Who would control bids ?How would deposit and payment be assured ?Would you be a bidder ? Would you have some doubts ?

Topic Example Video

The following video is a promotional video for a reverse auction website - Dubli.


v=O_OPpz7j0dI

E-Customer Service

Customer Service and Support on the Web:

A consumer would normally work through a number of stages of decision making prior to buying a productThere would probably be several related enquiriesSome of the enquiries would be about price and features of the product - could also be availability, delivery, insurance …..

E-Customer Service

Web based Customer service enquiry and support systems costs could be reduced (compared to telephone enquiries)Service and support, via the Web, could be of the 24/7/52 standard.After sales support - have you tried Microsoft ?Software patches, Help, downloads - the Web is a distribution channel for customer support - but know exactly what you are seeking, and be patient.Online chat systems are also a possibility WebCT ?

E-Customer Service

Personalised replies can be made to customers or potential customers .Airlines - a very competitive business, and one which cannot make mistakes, have ‘frequent flier points’ which can be queried by each intending passengerAnother organisation is the Tax Office - how to complete a tax returnPublic relations campaigns - but take care to be different, and innovative, and personalised and interesting (if not entertaining)

E-Customer Service Strategies

To produce results it is important to understand customer support needs to be good not expensive.

So think about out: What are they looking for? What do they need?

Organising Information On the web, most people hunt for the

customer service button to click onto when visiting a site.

So what should a site provide? Frequently answered question page Knowledge base Trouble shooting guide Search tool provision Expectation level explanation Information desk.

B2B E-Commerce

The recent increases in Business-to-Business E-Commerce has witnessed much interest and emphasis in Supply and Purchasing Chains. Productivity gains in this area will cause changes in:

organisational structures management approaches (strategies) business models staffing levels personnel responsibilities relationships with customers relationships with suppliers

Perceived ProblemsWhich is likely to be the more difficult suppliers ? The technical problems associated with integrating

back end transaction systems data warehouses, marts manufacturing tracking systems inventory tracking systems

or The Organisational issues such as

changing management culture changing organisational culture developing and ensuring trust between Companies

E-Marketplaces

A few thoughts about E-Marketplaces:Many of the Supply Chains are ‘fixed’ - companies are integrated with their Suppliers (remember the Car Industry dispute where the Supplier of Exhaust systems would not supply because of Industrial Action ?)The Web offers the opportunities for ‘as - required’ relationships or ‘virtual’ relationshipsThis means that there need be NO pre-established relationship (which is the way you shop, probably).

E-Marketplace Success Factors

Some ‘success factors’ in the e-marketplace include: Technology infrastructure Transaction administration system system Income stream Participants Participant needs satisfied Competitive advantage Relationship management Security Level of Independence

E-Marketplace ProblemsSome possible problems:

Too many e-marketplaces - lack of participants for some

Lack of revenue due to lack of participants Income streams not viable Payment relationship security Information confidentiality Technical performance of the e-marketplace Administrative performance of the e-marketplace Legal aspects related to contracts Lack of strategy

E-Marketplace BenefitsPerceived Benefits: Cost savings in selling Savings in purchasing Speed selling / purchasing Contact with new customers User convenience Transparency to users - marketplace an open environment Better quality of products and services Reduction of Office space required (or none) Expanded choice of products and services for buyers Better quality information on products and services

Topic Example Video

The following video outlines a B2B e-marketplace website.


v=BDdWtp10pLk

Intra-Organisational Systems :Intranets offer a cost-effective method of document management - presenting documents which present policies, procedures and initiatives

Transaction and query processing systems can be developed for :

internal purchasing order processes payroll leave

Intranets can also host bulletin boardsIntranets offer an opportunity as management toolsMany are used for capturing data and presenting data

Intranets

Virtual Organisations

Key characteristics of ‘Virtual Organisations’ are that they form structures made up of different companies (or people) which come together to complete certain tasks.They appear as one organisation to a customerCommunication, cooperation and coordination is via Information Technology

Critical Success Factors

Target the right customers Let customers help themselves Help customers do their jobs Own the customers total experience Streamline business processes that impact

on customer Deliver a personalised service Provide a 360 degree view of the customer

relationship Foster community.

Target the Right Customers

Points to keep in mind: Know who your customers and prospects are Find out which customers are profitable Decide which customers you want to attract

(or keep from losing) Know which customers influence purchases Find out which customers generate referrals Don’t confuse customers, partners and

stakeholders.

Let Customers Help Themselves

Customer self-help solutions to consider: Let customers help themselves to

information and perform transactions online

Let customers check on the status of orders, pay or adjust bills and access service

Let customers interact using whatever media they chose

Give customers the ability to design their own products.

Help Customers Do Their Jobs

Key ingredients for business customers: Develop a deep understanding about how your

customers do their jobs Continuously refine your business processes to

make it easier for your customers to do their jobs Give customers direct access to your inventory Give customers the ammunition and tools they

need to make their purchasing decisions Prepare bills the way your customers need them Make it easy for your customers to satisfy their

customers

Own all the Customers Experience

Build loyalty through taking responsibility by: Delivering a consistent “branded’ experience Focusing on saving customers time and

irritation Offering peace of mind Working with others to deliver consistent

service and quality Respecting the customers individuality Giving customers control over their experience

Streamline Business Processes

Guidelines to follow: Identify the final customer Streamline from the final customer’s

perspective Streamline considering key stakeholders Use feedback to continuously improve Provide everyone with a clear view

Deliver Personalised Service Specific points to consider: Create a warm, friendly relationship with each

customer Let customers specify and modify their profiles Customise offers and information to suit customer

profiles Provide appropriate service and information based

on customer needs Give customers access to their transaction histories Encourage customers to “leave something of

themselves behind”

Customer Surround Strategy

For a 360 degree view: Provide one-stop shopping for the customer “Remember” everything that the

organistaion knows about the customer Ensure that everyone within the organistaion

has access to the complete customer picture Embed an underlying technical infrastructure

in place to capture and provide a 360 degree view.

Foster Community Steps to foster membership: Seduce customers into the fold Introduce customers to others with

common interests Introduce and reinforce common

terminology and values Let customers “strut their stuff” Encourage customers to become part of

the “in crowd”.

Recap Video

The following video explains what are the 6 “must have” pages on your e-commerce website.


v=9xrzIwkYxPU

Next Session

Weekly Activity: e-Marketing Click on the following link: http://www.e-marketingclass.com/intro/e-

marketing-introduction-presentaion.htm This is a presentation by Mykola

Sarazhynskyy on what is e-marketing. Answer the following:

How do people shop online? How are customers acquired? What are the pro’s and cons? Word Count: 200 – 300.

Session E-Business Strategies and Success Factors.

Documents

Transcript of Session E-Business Strategies and Success Factors.