Chapter 2 Preparing the Online Business

Agenda Competition analysis The new channel New paradigms New system creation Discussion

Agenda Competition analysis The new channel New paradigms New system creation Discussion

Competition Analysis Identify and investigate your competitors on the web –Conducting business –Contacting customers Collect information –Survey –Purchase (Dun & Bradstreet) –Research & development (patents) Develop strategies - exploit competitors’ weakness and undermine their strength

Agenda Competition analysis The new channel New paradigms New system creation Discussion

The New Channel Old channels: linear –Face-to-face –Mail –Phone New channel: direct contact between customers and every partner in value chain –Internet Channel conflict

Channel Conflicts Clear market segmentation for all channel partners: decide who sells what to whom Solutions –Market check –Channel strategy: reconstructing the value chain (selling products and providing service supports) –Conflict documentation –Time limit

Agenda Competition analysis The new channel New paradigms New system creation Discussion

New Paradigms One-to-one enterprise (mass customization) Dynamic trade: Waverly Deutsch of Forrester Research “ leveraging technology to satisfy current demand with customized response” –Buyer-selected not seller-selected –Market decides the price –Added value: services –More fast and exact production –Customers’ preferences database

Business Process Re-engineering BPR Proposed by James Champy and Michael Hammer BPR –Question existing processes, rules and structures –Replaces the old ones with completely new processes, rules and structures –Increase the revenues or effectiveness by factors

Business Process Re-engineering BPR Customer – centric way Hyperarchical organization structure Reorganization –Employee –Structure –Combination Example –Just in time –Manufacturing resources planning systems –Material requirement planning systems

Agenda Competition analysis The new channel New paradigms New system creation Discussion

New System Creation Analysis Plan Design Development Implementation strategies

Analysis Product identification –Soft goods Software or information Sales and distribution channel –Hard goods Digitizing the value chain and orders –Service providers Translation or advertising IT evaluation –In house or outsource or combination

Analysis Goals –Lowest product price –Highest service –Cost reduction –Sales Location –Own internet connection –ISP

Analysis Shopping –Ease to use –Attractive Customer profile –Tracking visits & navigation –Customer database Public relation –Advertise and promote

Analysis Payment –Methods –Security Laws –National –International Culture

Plan E-business strategy in enterprise strategy –Which portion of the business Business partners considerations –Channel conflict Management & employee preparation Effective marketing Campaign

Plan Performance review method –Services & products fit into customer’s need and expectation Information Technology – , Intranet, Extranet, hardware, software –Heterogeneous systems architectures –System integration (new and old ones) –Back up plan (web server, connection) –Security plan Project team

Design Process requirements Web design: strategy & creativity Security Customer database Marketing techniques

Development IT selection: hardware, software Methods –In- house –Outsource –Combination

Implementation Strategies Management involvement Plan for constant change Pilot –Test (bugs, errors) –Feedback (performance) –Scalability –Integration

Implementation Strategies Training, maintenance and support Measure productivity Prepare for resistance –Company culture and personal culture –Start from

Agenda Competition analysis The new channel New paradigms New system creation Discussion

Discussion - I What kind of impact will be on the old traditional business due to dynamic trading? Is it necessary to conduct a business re- engineering before implementing an e- business or any new way of doing business?

Discussion - II What are the differences between the training of employees in the old systems and e-business systems? What are the differences between the security consideration in the old systems and e-business systems? Can you improve the development steps in creation of new e-business?

Points to Remember Competition analysis The new channel New paradigms New system creation Discussion