Week 2 by dffhrtcv3


									Week 2:

   Electronic Commerce Business
   Strategy for Competitive
   V.F. Kleist, Ph.D.
Why have an electronic
commerce strategy?
Electronic Commerce Business Strategy for
Competitive Advantage

® Review of Last week, What is Electronic
  Commerce, business models for success
® Notes from text Chapter 2, (Amor)
® Forces that drive use of Electronic Commerce
® Changes that Electronic Commerce might
  yield for a business, + and –
® Impacts of Electronic Commerce on Firm
® Electronic Commerce Strategy and
  Implementation (Turban, et al, 2000)
Business issues of EC
                                      (Turban, et al, 2002, Chpt.

® New way of doing business
® Different if selling to customer v. corporations
® Has economic impact on competition
® New role of intermediaries
® Using EC in supply chain management
® Can improve customer service
® Can use EDI via the internet
® Can change methods of marketing
Electronic Markets           (Turban, et al. Chpt. 1)

® New vehicle for business
® Not a building, but a network location where
  business interactions occur
® Where shoppers and sellers meet
® Requires transfer of payments
® Participants are brokers, buyers, sellers
® Participants may never even meet
® Means of interconnection varies between
  parties, can change by event or transaction
® Trace flow of how an electronic market works.
Wal Mart example of IOS
Chpt. 1)
                                     (Turban, et al.

® World’s largest retailer, $100 B in sales
® Coordinates production, marketing,
  finance via computer networks
® Provides each supplier a monthly profit
  and loss statement on their products
® Uses Collaborative Forecasting and
  Replenishment Ecommerce Model
Preparing the Online
Business, Chpt. 2, Amor
® Preparing the Online Business
® Competitor Analysis on the Internet
® The Fourth Channel
® Paradigms in the New Economy
® Return on Investment
® Driving Business Process Reengineering
® Designing, Developing and Deploying the
Benefits to Electronic
Commerce               (Greenstein and Feinman 2000, p. 3, direct quote)

®   Internet and web-based electronic commerce is more
    affordable than traditional EDI
®   Internet and web-based electronic commerce allows more
    business partners to be reached than with traditional EDI
®   Internet and web-based electronic commerce can reach a
    more geographically dispersed customer base
®   Procurement processing costs can be lowered
®   reductions in inventories
®   lower cycle times
®   better customer service
®   lower sales and marketing costs
Reasons to Move to EC           (Amor, 2002)

® Expand       market reach
® Visibility
® Responsiveness
® New  Services
® Strengthen business relationships
® Cost- Reduction
® Channel Conflicts
EC Benefits to Organizations
(Turban, et al. chpt. 1)

® Expands markets
® Decreases cost of paper based info
® Reductions in inventories
® Pull supply chain management
® Customization of products
® Reduces time between outlay of capital and
  receipt of products and services
® Supports BPR
® Reduces telecommunications costs
® Improves image, improved customer service,
  newfound business partners
EC Benefits to Consumers
al, Chpt. 1)
                              (Turban, et

® Shop 24 hours a day
® More choices
® More products
® Less expensive products
® Quick delivery
® Electronic communities
® Facilitates competition
® Virtual auctions
® Work at home
® Lower prices
® Access to public services
Negatives to EC           (Turban, et al., 2002, Chpt. 1)

® Lack of security, reliability, standards,
® Insufficient bandwidth
® Software development tools still evolving
® Difficult to integrate EC software with back
  office platform
® Vendors need more hardware and software,
  and these products need to be supported
® Cost to develop is high, hard to see payback
® Lack of trust, privacy, security cause
® Legal issues unclear
Ecommerce Business
Ecommerce Business
® How   much business on web in next 12
  months, two years?
® Fully digital, web based business, or
  just fourth channel for your firm (e.g.,
  face to face, telephone or mail)?
® How fast is the company going to grow?
® What are your expectations for return
  on investment? Cost reduction?
Planning for Ecommerce               (Amor, 2002)

®   Find a champion
®   Plan for change
®   Define a pilot project
®   Estimate the costs
®   Measure productivity
®   Re-engineer business processes
®   Learn as you go
®   Prepare for resistance
®   Prepare for disaster
®   Create a dark site
Issues of Web Marketing                (Amor, 2002)

®   Brands           ®   Live Events
®   Change           ®   Niche Markets
®   Conciseness      ®   Promotion
®   Dynamic Sites    ®   Syndication
®   Finances         ®   Technology
®   Free Givaways    ®   Feedback
®   Global Village   ®   FAQ
®   Color schema     ®   Navigation Aids
®   File size
Why is the web so compelling
in a marketing sense?(Bruner 1998,
Chapter 2)

® Interactive
® Personal
® Infocentric
® Instantaneous
® Measurable
® Flexible
® Interlinked
® Economical
® Resources
Enterprise.com: Market
Leadership in the Information
Age     (Papows 1998)

®   The Network Centric Era and the Changing
®   The Web: Forger of the New IT Economics
®   The Web/Virtual Office Based Era
®   The Market Facing Enterprise
®   Knowledge Management: The Sustainable
    Competitive Advantage
®   Converging and Transforming Industries
®   The Great American Economic Surprise
®   The Race For Global Leadership
New Rules for the New
(Kelly, 1998)

® Embrace the swarm    ® Let go at the top
                       ® From places to
® Increasing returns
® Plentitude, not
                       ® No harmony. All flux
                       ® Relationship tech
® Follow the free
                       ® Opportunities before
® Feed the web first
Outlook for the Future       (based on Amor)

® Consumer   devices
® Privacy and Security
® Next Generation Internet
® Brokers
® Total automation of business
® Social impacts
® Electronic commerce vs. .coms
 ®   How can electronic commerce reduce inventory
 ®   How can electronic commerce reduce production
     cycle time?
 ®   How can electronic commerce enhance customer
 ®   How can electronic commerce help a firm reach its
     customers in a very low-cost fashion?
 ®   Does Internet access make employees more or less
 ®   Give an example of electronic commerce in the
     supplier’s value chain.
Internet Building Blocks
(PriceWaterhouseCoopers, 2001 Technology Forecast)

® Applications Programming Interfaces
® Server side programming languages and
® Web Server Products
® Improving Web server performance
® Client side technologies
® Schemas, frameworks and vocabularies
® Internet related products and services

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