E-Business Systems Strategy PDF

Electronic Business Systems Dr. Noha Ibrahem Chapter 4  What is strategy? ❖ ‘Defines how we will meet our objectives’ ❖ ‘Sets allocation of resources to meet goals’ ❖ ‘Selects preferred strategic option to compete within a market’ ❖ ‘Provides a long-term plan for the develo...

Electronic Business Systems Dr. Noha Ibrahem Chapter 4  What is strategy? ❖ ‘Defines how we will meet our objectives’ ❖ ‘Sets allocation of resources to meet goals’ ❖ ‘Selects preferred strategic option to compete within a market’ ❖ ‘Provides a long-term plan for the development of the organization’.  What is E-business strategy? ❖ The set of plans and objectives by which applications of internal and external electronically mediated communication contribute to the corporate strategy. ❖ An e-business strategy defines a long-term plan for putting in place the right digital technology for a company to manage its electronic communications with all partners  What are 3 levels of e-business strategy? The three levels are: Corporate level strategy, Business level strategy, and Functional strategy. These different levels of strategy enable business leaders to set business goals from the highest corporate level to the bottom functional level. Relationship between e-business and other organization strategies  Steps for Strategy Development Strategy development is the process of researching and identifying strategic options, selecting the most promising and deciding how resources will be allocated across the organization to achieve objectives. 1. Understand the current position 2. Reflect on how you got there 3. Be clear about your corporate identity (mission, vision and values) 4. Analyze your strengths and weaknesses 5. Analyze the business environment 6. Identify and evaluate strategic options 7. Set objectives 8. Communicate the strategy 9. Implement the strategy 10. Review progress  Sell-side strategy or e-marketing / CRM strategy Sell-side is a channel strategy. Objectives for online contribution percentage should drive our strategy. Our e-commerce strategy defines how we should: Discover our channel thinking leaders and sales targets. Acquisition, Conversion, Service, Profitability Communicate benefits of using this channel. Prioritise products available through channel. Prioritise audiences targeted through channel. Select partners for this channel.  Buy-side strategy or e-supply chain management strategy Buy-side strategy is about maximizing operational efficiencies while improving customer service quality. Operational efficiency KPIs should drive our strategy. ▪ Key performance indicators (KPIs) are targets that help you measure progress against your most strategic objectives. ✓ Customer Satisfaction, ✓ Internal Process Quality, ✓ Employee Satisfaction, and. ✓ Financial Performance Index.  Our buy-side e-commerce strategy defines how we should: ▪ Automate internal processes. ▪ Link internal resource management systems with external purchasing systems. ▪ Prioritise suppliers/partners collaborating using this channel ▪ Prioritise applications for SCM (Supply Chain Management) ▪ Create a roadmap. Involves selection of appropriate strategic partners.  Value Chains ❑ Electronic Business includes so many activities and transactions that it can be difficult for managers to decide where and how to use it in their businesses. ❑ One way to focus on specific business processes as candidates for Electronic Business is to break the business down into a series of value- adding activities that combine to generate profits and meet other goals. ❑ A strategic business unit is one particular combination of product, distribution channel, and customer type.  Value Chains ❑ A value chain is a way of organizing the activities that each strategic business unit undertakes to design, produce, promote, market, deliver, and support the products or services it sells. ❑ The support activities of a value chain for a strategic business unit include: ✓ Finance and administration ✓ Human resources ✓ Technology development Value Chain for Strategic Business Units  Examples of an E-Business Strategy Social Media Strategy Social media is quickly becoming an important focus for a solid e-business strategy. An example of a good social media e-business strategy model would include setting up a Twitter account and a company blog. The blog is used to bring readers useful information related to the products or services the company offers. Twitter is used to notify followers of this new information and interact with relevant entities and individuals.  Social media is best used as a positive source for generating sales – the primary focus should be on relationship building and providing useful information, not on hard selling. For example, a company that sells athletic shoes may be launching a new product in the near future. This company could use social media sites to share informative articles on the benefits of wearing the proper shoe for specific sports activities, or entertaining articles on which celebrities wear which shoes. The key is to make the content useful to your target customers; the product will then sell itself.  Permission Marketing Strategies ❑ Many businesses may send e-mail messages to their customers and potential customers. ❑ The practice of sending e-mail messages to people who have requested them is a part of marketing strategy called permission marketing.  Technology-Enabled Customer Relationship Management ❑ The nature of the Web allows firms to gather more information about customers’ behavior and preferences than they can gather using micromarketing approaches. ❑ Technology-enabled relationship management occurs when a firm obtains detailed information about a customer’s behavior, preferences, needs, and buying patterns, and uses that information to set prices, negotiate terms, tailor promotions, add product features, and otherwise customize its entire relationship with that customer. ❑ Although companies can use technology-enabled relationship management concepts to help manage relationships with vendors, employees, and other stakeholders, most currently use these concepts to manage customer relationships ❑ Technology-enabled relationship management is often called Customer relationship management (CRM) ❑ Technology-enabled customer relationship management Electronic customer-relationship management (ECRM)  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, for example, Tesco, Dell. Poor customer experience from poorly integrated channels.