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