Chapter 5 E-business Strategy

Learning objectives Follow an appropriate strategy process model for e-business; Apply tools to generate and select e-business strategies; Outline alternative strategic approaches to achieve e-business.

Issues for managers How does e-business strategy differ from traditional business strategy? How should we integrate e-business strategy with existing business and IS strategy? How should we evaluate our investment priorities and returns from e-business?

Michael Porter on the Internet ‘The key question is not whether to deploy Internet technology – companies have no choice if they want to stay competitive – but how to deploy it.’ Porter, M. (2001) Strategy and the Internet, Harvard Business Review, March 2001, 62–78.

Different forms of organizational strategy Figure 5.1  Different forms of organizational strategy

Relationship between e-business strategy and other strategies Figure 5.2  Relationship between e-business strategy and other strategies

A generic strategy process model Figure 5.3  A generic strategy process model

Dynamic e-business strategy model Figure 5.4  Dynamic e-business strategy model Source: Adapted from description in Kalakota and Robinson (2000)

Elements of strategic situation analysis for the e-business Figure 5.5  Elements of strategic situation analysis for the e-business

What happens where there is no e-business strategy? Missed opportunities for additional sales on the sell-side and more efficient purchasing on the buy-side Fall behind competitors in delivering online services – may become difficult to catch up, e.g. Tesco, Dell Poor customer experience from poorly integrated channels

Adoption steps of e-business services Figure 5.6  Adoption steps of e-business services

Summary applications portfolio analysis for the B2B Company Figure 5.7  Summary applications portfolio analysis for The B2B Company

SWOT analysis for the B2B company Figure 5.8  SWOT analysis for The B2B Company

Customer demand for e-marketing services for The B2B Company Figure 5.9  Customer demand for e-marketing services for The B2B Company

Competitive threats acting on the e-business Figure 5.10  Competitive threats acting on the e-business

Porter’s five forces Threat of substitutes

Activity – Impact of Internet For one of the industries below, assess how the Internet has changed the competitive forces, e.g. has it increased or decreased power of suppliers and customers? Industries: Banking Supermarkets Oil industry Rail industry

Elements of strategic objective setting for the e-business Figure 5.11  Elements of strategic objective setting for the e-business

Direct and indirect Internet contributions for fast growth companies in the US Figure 5.12  Direct and indirect Internet contributions for fast-growth companies in the USA Source: PricewaterhouseCoopers (2000)

Grid of product suitability against market adoption for transactional e-commerce (online purchases) Figure 5.13  Grid of product suitability against market adoption for transactional e-commerce (online purchases)

Elements of strategy definition for the e-business Figure 5.14  Elements of strategy definition for the e-business

Strategic options for a company in relation to the importance of the Internet as a channel Figure 5.15  Strategic options for a company in relation to the importance of the Internet as a channel

Assessment of risk for market and product development for the B2B company Figure 5.16  Assessment of risk for market and product development for The B2B Company

New product development – Smile online banking (www.smile.co.uk)

Dabs.com (www.dabs.com) Figure 5.18  Dabs.com (www.dabs.com)

Elements of strategy implementation for the e-business Figure 5.19  Elements of strategy implementation for the e-business