OHT 5.1 © Marketing Insights Limited 2004 E-business Strategy
OHT 5.2 © Marketing Insights Limited 2004 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.
OHT 5.3 © Marketing Insights Limited 2004 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?
OHT 5.4 © Marketing Insights Limited 2004 How does e-business strategy differ from traditional business strategy? In the one-to-many hierarchical information flow that characterized the Industrial Age, information flowed one way, from the producer to the consumers. The Internet has changed this in three important ways. –the Internet allows consumers to talk to consumers –consumers can find and access information much easier than before –enables the information flow to be reversed so customer-centric companies can pull information from consumers to improve and customize products
OHT 5.5 © Marketing Insights Limited 2004 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.
OHT 5.6 © Marketing Insights Limited 2004 Different forms of organizational strategy Figure 5.1 Different forms of organizational strategy
OHT 5.7 © Marketing Insights Limited 2004 Corporate Strategy – What business should you be in? Looks at the whole range of business opportunitiesCorporate Strategy Business Strategy – Battle plans, tactics used to fight the competition in the industry that your company currently participates in (see Competitive Strategies and Competitive War Games)Business StrategyCompetitive StrategiesCompetitive War Games Functional Strategy – Operational methods and value adding activities that you choose for your business (venture strategies, technology strategies, diversification strategies, marketing strategies, differentiation strategies, etc.)venture strategiestechnology strategiesdiversification strategiesmarketing strategiesdifferentiation strategies
OHT 5.8 © Marketing Insights Limited 2004 Relationship between e-business strategy and other strategies Figure 5.2 Relationship between e-business strategy and other strategies
OHT 5.9 © Marketing Insights Limited 2004 A generic strategy process model Figure 5.3 A generic strategy process model
OHT 5.10 © Marketing Insights Limited 2004 Dynamic e-business strategy model Figure 5.4 Dynamic e-business strategy model Source: Adapted from description in Kalakota and Robinson (2000)
OHT 5.11 © Marketing Insights Limited 2004 Elements of strategic situation analysis for the e-business Figure 5.5 Elements of strategic situation analysis for the e-business
OHT 5.12 © Marketing Insights Limited 2004 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
OHT 5.13 © Marketing Insights Limited 2004 Adoption steps of e-business services Figure 5.6 Adoption steps of e-business services
OHT 5.14 © Marketing Insights Limited 2004 Summary applications portfolio analysis for the B2B Company Figure 5.7 Summary applications portfolio analysis for The B2B Company
OHT 5.15 © Marketing Insights Limited 2004 SWOT analysis for the B2B company Figure 5.8 SWOT analysis for The B2B Company
OHT 5.16 © Marketing Insights Limited 2004 Customer demand for e-marketing services for The B2B Company Figure 5.9 Customer demand for e-marketing services for The B2B Company
OHT 5.17 © Marketing Insights Limited 2004 Competitive threats acting on the e-business Figure 5.10 Competitive threats acting on the e-business
OHT 5.18 © Marketing Insights Limited 2004 Porter’s five forces Threat of substitutes
OHT 5.19 © Marketing Insights Limited 2004 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
OHT 5.20 © Marketing Insights Limited 2004 Elements of strategic objective setting for the e-business Figure 5.11 Elements of strategic objective setting for the e-business
OHT 5.21 © Marketing Insights Limited 2004 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)
OHT 5.22 © Marketing Insights Limited 2004 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)
OHT 5.23 © Marketing Insights Limited 2004 Elements of strategy definition for the e-business Figure 5.14 Elements of strategy definition for the e-business
OHT 5.24 © Marketing Insights Limited 2004 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
OHT 5.25 © Marketing Insights Limited 2004 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
OHT 5.26 © Marketing Insights Limited 2004 New product development – Smile online banking (
OHT 5.27 © Marketing Insights Limited 2004 Dabs.com ( Figure 5.18 Dabs.com (
OHT 5.28 © Marketing Insights Limited 2004 Elements of strategy implementation for the e-business Figure 5.19 Elements of strategy implementation for the e-business