E-Commerce: Formulation of Strategy Jason Chen, Ph.D. Senior Consultant TASKCO.COM.TW [email protected] [email protected]

E-Commerce:Formulation of Strategy

Jason Chen, Ph.D. Senior ConsultantTASKCO.COM.TW

[email protected]@gonzaga.edu

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eBusiness Key Concepts

eBusinessthe strategy of how to automate old business models with the aid of technology to maximize customer value

eCommercethe process of buying and selling over digital media (e.g., Internet)

eCRM (eCustomer Relationship Management)the process of building,sustaining, and improving eBusiness relationships with existing and potential customers through digital media

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eBusiness Processes

WHY Customer Relationship

Redesign Business Processes (Outside-In)

Applying Technology

WHAT

HOW

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Why e-Business? The Information economy will make all

organizations reassess their positions with respect to their customers-supplier relationship.

“e-Business is bound to come and unless we are able to cope with the changes in this world, our competitiveness will decline.” this is a clear testament to the power of the new

information-based economy and a warning to all companies that inertia must be overcome and change embraced.

By Michiyo Nakamoto, Financial Times, Nov. 23, 1999

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New Terminology of Electronic Commerce

Electronic Business

Electronic Commerce

WebCommerce

ElectronicData

Interchange

Electronic Funds Transfer

Internet Commerce

Which includes:

Electronic advertising Electronic buying and selling Electronic distribution Direct client interaction for Marketing and customer service Groupware, e-mail,electronic collaboration Workflow, automated Forms distribution Secure X.400(e-mail) Business transactions

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Figure 1.1 Established, Online,and Consortium Organizations in the Marketspace

Established organizations

Total Market

Online Organizations

E-commerce Marketspace

E-consortium

N

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The Key to successful business on the Internet ...

The key to successful business on the Internet is not the formulation of a conceptual strategy but the execution of that strategy - the content owners must buy into the strategy and have

the confidence of senior executives, often the decisions the content owners make may have

serious consequences to the organization and its strategy

Buy-in and open discussions are keys to success

Robert Plant, eCommerce: Formulation of Strategy, pp.67, 1999, Prentice Hall

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Two Major Elements determines Organization’s Success

Core Competency A Value-added

Business Model Value, value, value…

N

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Core CompetenciesDetailed Customer Knowledge and FocusWe will seek to understand, anticipate, and be responsive to ourcustomer’s needs.

Large-Scale System IntegrationWe will continuously develop, advance and protect the technical excellencethat allows us to integrate effectively the systems we design and produce.

Learn, Efficient Design and Production SystemsOur design and production systems will be among the best in the world,characterized by efficient use of assets, short time-to market, short flowtimes, short cycle times, high quality and high inventory turns.

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Why e-Commerce Model is beneficial to your Business?

The e-Commerce model is a basic model of competitive strategy, based on the principles of low costs, high volumes, and comprehensive service, combined with a product range unapproachable through traditional channels.

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Why New Models?

We need some new models for how we go about exploring IT for

competitive advantage, for IT infrastructure how we create it and

manage it for how we acquire, manage and deploy the

skills that are needed to run that infrastructure

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The Seven Dimensions of an e-Commerce Strategy (bonding and leadership factors)

LeadershipLeadership

InfrastructureInfrastructure

ServiceService

MarketMarket

OrganizationalLearning


BrandBrand

TechnologyTechnology

N

Bonding factors

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Table 1.1 Leadership Factors for New Internet-Based Organizations

Leadership Factor The pillars of Success for Organization Born on the Internet----------------------------------------------------------------------------------------------Technology

The technology goal must be understood for that organization within its industry and market.

An organization must determine it is going to be an advanced technology leader or follow a technology agenda that relies upon more stable

systems (bleeding versus leading edge).

An organization must determine what is the necessary relationship between the company’s technology or product strategy and the operational

aspects of that strategy.

The technology employed by an organization must service the customers’ needs and expectations from a technology perspective.

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Table 1.1 Leadership Factors for New Internet-Based Organizations (continued)

Leadership Factor The pillars of Success for Organization Born on the Internet--------------------------------------------------------------------------------------------------Technology

Organizations must ask themselves questions such as “Are we a technology company? Can the technology be used to create barriers

to entry? Can technology be used to lock in a customer base?”

Organizations must have clearly defined the to these questions and must work them into their business plan.

Market An organization must determine its target market and whether it is

still realistically open to new entrants.

An organization must understand how the market is going to segment and grow over the near and longer term and know whether the

organization will be able to move rapidly enough to meet those changing needs.

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Table 1.1 Leadership Factors for New Internet -Based Organizations (continued)

Leadership Factor The pillars of Success for Organization Born on the Internet----------------------------------------------------------------------------------------------Market Being born on the Net requires that the organization understand the

possible moves from majors established organizations and utilize its own nimbleness to counter them.

Service An organization must know its customers’ expectations regarding

service level

The organization must understand what its value proposition is and how service facilities or augments it

An organization must understand its own Internet service value chain, the components of which are

--- Understanding the relationship between attracting customers and service levels

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Leadership Factor The pillars of Success for Organizations born on the Internet----------------------------------------------------------------------------------------------Service Understanding how an organization creates service value during a

transaction for a customer.

Understanding how service plays a role in the customer fulfillment process, where the purchase is dispatched.

Understanding the role of customer service in retaining customers and maintaining site adhesion.


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Leadership Factor The pillars of Success for Traditional Established Organizations------------------------------------------------------------------------------------------------- Brand

An organization must understand whether it has the ability to create a

strong brand An organization must understand the basis of its brand. Is it

--- Technology leadership?--- Service provision?--- Market positioning?

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Table 1.2 Leadership Factors for Established Organization

Leadership Factor The pillars of Success for Traditional Established Organizations-------------------------------------------------------------------------------------------------- Technology

An organization must understand what technology implications are for that organization --Internet,enterprise resource planning, data Warehouse, etc.

Organization must know whether their processes are aligned to an Internet technology-based approach.

An organization must understand how its customers view and use technology within the marketspace and must leverage that knowledge to build an effective infrastructure that facilities an agile and flexible

e- commerce strategy.

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Table 1.2 Leadership Factors for Established Organization (continued)

Leadership Factor The pillars of Success for Traditional Established Organizations----------------------------------------------------------------------------------------------. Technology

An organization must assess its internal value chain as well as those of its suppliers and build to minimize costs and maximize efficiencies.

Market An organization must understand what the implications of e-

commerce and technology are for the marketspace in which the organization is to compete in terms of:

--- Branding

--- Relationship management

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Leadership Factor The pillars of Success for Traditional Established Organizations----------------------------------------------------------------------------------------------Market An organization must determine whether its target market is the

same as its traditional bricks-mortar marketspace or if it has moved.

If its core marketspace have moved, is it still realistically open to traditional organizations moving onto the Net?

An organization must understand how the market is going o segment and grow over the near future due to the impact of the internet and must determine whether the organization will be able to move

rapidly enough to meet those changing needs.

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Leadership Factor The pillars of Success for Traditional Established Organizations --------------------------------------------------------------------------------------------------. Market Organization must assess the impact of pure Internet-based

organizations and use their own traditional core strengths-market knowledge and product knowledge to offset Internet-based

companies’ nimibleness.

Service An organization must determine the new service level expectations

of the customer.

An organization must understand what the customers’ new value proposition requirements are in terms of cost, service level expectations, and information-based service.

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Table 1.2 Leadership Factors for established Organization (continued)

Leadership Factor The pillars of Success for Traditional Established Organizations ----------------------------------------------------------------------------------------------Service Organizations must reassess their service value chain.

-- How are we going to acquire customers?

-- How are we going to develop customer relationships through the new medium?

-- How can we best fulfill the customers’ needs -- bricks and mortar,clicks and mortar, or online?

-- How do we support our customers during purchase and through order fulfillment?

-- How do we retain customers between orders?

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Leadership Factor The pillars of Success for Traditional Established Organizations----------------------------------------------------------------------------------------------Brand• Organizations need to determine how to best leverage their existing

brand.

-- Do we have the ability to create a strong dot-com brand?-- What is the basis of that brand?-- What are the implications for our brand in terms of the technology we employ, develop, or use?-- What are the challenges for creating a new dot-com brand?-- Does the Internet demand an amendment or a completely new service provision?-- Will new brand positioning change our existing brand?

Table 1.2 Leadership Factors for established Organization (continued)

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Table 1.3 Bonding Factors Toward the Development of E-commerce Strategy

Bonding Factors Issues --------------------------------------------------------------------------------------------------Leadership

Does the CEO have a vision for e-commerce?

Does the CEO have a track record of taking technology change in stride?

Do the senior executives share a technology vision? Also, do they understand its impact upon their functional area and the organization

as a whole?

Is the leadership stable or in a continual state of flux?

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Bonding Factors Issues--------------------------------------------------------------------------------------------------Infrastructure

Can the organization’s technology infrastructure support the new model of e-business

Can the organization’s technology infrastructure support the move to mass customization?

What are the implications for the organizational changes needed to be competitive in an e-commerce environment?

Does the organization’s infrastructure interface with the infrastructures of their suppliers and customers in the electronic marketplace?

Table 1.3 Bonding Factors Toward the Development of E-commerce Strategy (continued)

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Bonding Factors Issues----------------------------------------------------------------------------------------------. Organizational Learning Does the organization support internal learning?

-- Scanning the technology horizon for change and then adopting that change where appropriate

-- Developing a self-awareness inside the boundaries of the organization to drive practice and process change

Can the learning of the organization with respect to markets, product, technology, processes, etc., be quickly refocused into a new

technology-based method of production?

Table 1.3 Bonding Factors Toward the Development of E-commerce Strategy (continued)

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Key Factors for an Organization’s Success

Several key factors are key to determining an organization’s potential for success: Does the organization possess first-mover

advantage in the marketspace? Does the organization differentitate itself in the

marketspace? Does the organization posses the ability to be

flexible and agile in the e-marketspace?

N

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The Executive should ...

The development and execution of a successful e-commerce strategy is a difficult intellectual and creative task, one that every executive will have to undertake.

Key Steps: determine the core competencies of your organization determine the limitation in the new markepspace assess the mechanisms available to move forward.

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Types of marketspace

B2C B2B B2G G2B B2B2C B2B2E The e-consortium

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Creating an Integrated e-Commerce Strategy

Four positional factors Technology Service Market Brand

Three bonding factors Leadership Infrastructure Organizational Learning.

Ch.2

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Figure 2.1: The Seven Dimensions of an e-Commerce Strategy (bonding and leadership factors)



ServiceService

MarketMarket



BrandBrand


N

Bonding factors

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Figure 2.1 The Seven Dimensions of ane-Commerce Strategy



ServiceService

MarketMarket



BrandBrand


N

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What is the Next ...

Based on the seven-dimension e-C strategy model ...

If you want your company to succeed, the solution is to move to an e-Commerce model ASAP.

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Figure 2.1 The Seven Dimensions of ane-Commerce Strategy (bonding and leadership factors)

ServiceService

MarketMarketBrandBrand


Organizational Learning

Leadership

Infrastructure

N

Bonding factors

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What is the Next ...

Based on the seven-dimension e-Commerce strategy model ...

If you want your company to succeed, the solution is to move to an e-Commerce model ASAP.

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Creating an Integratede-Commerce Strategy (continued)

Organizations will always be adjusting their strategies to meet the changing environment in which they operate, and the model aims at assisting executives in understanding the importance and weighting that need to be applied to each factor.

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Figure 2.2 The Bonds of an e-Commerce Strategy

Leadership


Infrastructure


N

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Integration of the Four e-Commerce Leadership Propositions

In creating an e-Commerce strategy, it is clearly to align and integrate the four main areas of positional strategic focus: technology, brand, service, and market.

This is a challenging task that must be deeply considered at the outset of strategy formulation since both the dollar and opportunity costs of dramatic strategic change after execution can be high.

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Integration of the Four e-Commerce Leadership Propositions (continued)

This is not to say that change is not occurring; change in this arena is inevitable and continuous, with victory coming to those who can adapt fastest and be nimble in the face of change.

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Figure 2.3 Integration of the Foure-Commerce Leadership Propositions

Technology Leadership

Brand Leadership

Market Leadership

Service LeadershipIntegrated e-commerce strategy

N

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Technology Leadership

It involves the early adoption of an emerging technology to achieve a preemptive position.

e-Commerce strategies focused on leadership through technology that are found in all industry sectors.

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Brand Leadership Louis Gerstner, Chairman & CEO: IBM

Branding - it is a very important issue and it will dominate business thinking I suspect for a decade or more.

Internet ability to influence, change, or reinforce corporate branding.

Source: IBM Executive Conference on Information Systems, Latin America, Miami, FL, September 1, 1998

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Developing a Winning E-strategy

1. Ensure the project is backed by a senior executive.

2. Develop a strategy before developing a Web presence.

3. Develop a strategy by focusing on technology, branding, marketing, and service.

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Developing a Winning E-strategy (continued)

4. Develop an IT infrastructure capable of matching the strategic objectives.

5. Identify and use knowledge in the organization.

6. The strategy must add value for customers, and it must change as the requirements of those customers change.

Porter’s Five Competitive Forces Model

THE FIRMTRADITIONAL COMPETITORS

NEW MARKET ENTRANTS

SUPPLIERS

SUBSTITUTE PRODUCTS & SERVICES

CUSTOMERS

Threats

Bargaining power

NTM -45

Elements of Industry Structure

NDr. Chen, The Trends of the Information Systems Technology TM -46

Force ImplicationPotential Uses of IT

to Combat Force

Threat of new entrants New capacitySubstantial resourcesReduced prices or inflation

of incumbent’s costs

Provide entry barriers:economies of scaleswitching costsproduct differentiationaccess to distribution channels

Buyers’ bargaining power Prices forced downHigh qualityMore servicesCompetition encouraged

Buyer selectionSwitching costsDifferentiationEntry barriers

Suppliers’ bargainingpower

Prices raisedReduced quality and services

(labor)

SelectionThreat of backward integration

Threat of substituteproducts or services

Potential returns limitedCeiling on prices

Improve price/performanceRedefine products and services

Traditional intraindustryrivals

Competition:priceproductdistribution and service

Cost-effectivenessMarket accessDifferentiation:

productservicesfirm

Impact of Competitive Forces

Dr. Chen, The Trends of the Information Systems Technology TM -47

Activities of Value Chain

Inbound Logistics

Financeand Accounting

Production

and Manufacturing

Marketingand Sales

Outbound

LogisticsService

Administrative and Other Indirect Value Added


Primary Activities

Support Activities

TM -48

Manufacturing Industry Value Chain Product and Service Flow

Research and Development

EngineeringProduction

and Manufacturing

Marketing Sales and

DistributiionService



Primary Activities

Support Activities

TM -49

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Ownership Issues

E-centric Structure + Content = Success

Content alone is not sufficient for success

Successes come from a balanced business modelthat involves each business area content provider

contributing to the overall business model.

Ch.3

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Problems and Issues that e-C Strategists face ... Problems and issues that e-C strategists

going forward may face are: business models

transform from the old to the new, or start from afresh

culture: change time

time to market sustainable competitive advantage and customer

value

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Figure 3.1 The E-centric Management Structure

CEO

ManufacturingSales &Service Logistics Finance Personnel

Sales &Service

Logistics

VPE-commerce

Manufacturing

Engineering

Purchasing

Finance

Personnel

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Figure 3.2 The Relationships Structure of an E-centric Organization

SeniorManagement

MarketingAutomation

Peer-to-Peer Planning

Content Owners

VPE-commerce

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Senior Strategic Management Group The overriding driver of a successful

Internet strategy is the leadership demonstrated by senior levels of the organization. Content and services are based around the value

and investment criteria defined by the executive steering group.

The criteria will be in the form of brand, service, and market specifications, with a directive on technological leadership issues.

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Marketing-Automation-Strategy (MAS) Group

The MAS group develops a framework for the operational e-commerce strategy, which is then implemented at the level of the content owners.

This is performed through the creation of peer to peer planning groups.

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Planning Groups

The planning group provides the central structure through which the core operational issues of e-commerce strategy are derived, policies such as:

security content parameters format issues partner-relationship mgt. request for comments,

proposal standards access parameters from

a technical perspective (speeds, bandwidth, requirements, etc.)

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Content

Content may be king, but it is value chain that is the power behind the throne. what content is necessary for success, what customers want in their content, how the content adds value to customers.

Content is strong only when derived from a strong and flexible business model such as that of AOL Time Warner, which can service the customer globally on the customer’s terms.

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Conclusion

The key to successful business on the Internet is not the formulation of a conceptual strategy but the execution of that strategy.

To execute effectively, content ownership has to be exploited.

The content owner must buy into the strategy and have the confidence of senior executives. Buy-in and open discussions are keys to success.

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E-Strategy Leadership through a Technology Focus

The technology component has to be in balance and harmony with the other positional factors - brand, market positioning, and service - to be truly effective.

Strategy will be based on technology strength, technology leadership, or enabling role.Ch.4

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E-Strategy Leadership through a Technology Focus (continued)

The area of technology leadership involves much more than purely the hardware and software that compose an organization’s physical infrastructure.

The 7S model can be employed in a new way to provide a corporate framework through which executives can formulate an internal strategy for e-Commerce.

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Figure 4.1 The Mckinsey 7S Framework

Structure

Strategy

Skills

Shared Values

Staff

Systems

Style

(Source: R.H.Waterman, T.J.Peters, and J.R.Philips, “Structure Is Not Organization,” The Mckinsey Quarterly, Summer 1980, p.7)

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Table 4.1 A Glossary of the 7Ss

Strategy (overall corporate) Strategy can be defined as the determination of a course of action to

be followed in order to achieve a desired goal, position, or vision. Structure

An organization’s structure is the interrelationship of processes and human capital in order to fulfill the enterprise’s strategic objectives.

Systems The organization’s information systems and infrastructure.

Staff Human recourses management

Style Corporate style is a synthesis of the leadership philosophy of

executive management, the internal corporate culture generated, and the orientation an organization adopts to its markets, customers, and competitors.

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Table 4.1 A Glossary of the 7Ss (continued)

Skills The unique or distinctive characteristics associated with an

organization’s human capital. Shared Values

The concepts that an organization utilizes to drive toward a common goal through common objectives and a common value set.

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Strategy: The Alignment of Technology and Corporate Planning

The whole basis of technology strategy formulation is the ability of the organization’s executive to achieve alignment, that is alignment between the technology strategy and the strategy of the enterprise as a whole.

CEO ConceptualStrategic Horizon

Figure 4.2: Strategy and Technology Horizons

CIO

EmergingTechnology Horizon

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Strategy: The Alignment of Technology and Corporate Planning (continued)

The best-case senior is for the CEO and CIO to have synergy and an aligned planning horizon.

Executives should be efficient and adding value by planning ahead and contemplating the bigger picture rather than being reactive, putting out fires.

DecliningCore

Core

CIO & CEO

EmergingCore Aligned

Planning Horizon

Figure 4.3: Technology Planning Horizons

Lead Time

Technology Window N

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Strategy: The Alignment of Technology and Corporate Planning (continued)

The alignment of IT strategy and organizational strategy is the key that unlocks a firm’s ability to complete effectively and adapt to changing market forces.

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Structure: Characteristics of a Flexible Agile e-Organization

Flexibility

Low Cost

Market Knowledge

Knowledge management

e-Org

ServiceG

oodsYouthful Mature

Age of Organization

Product Type

N

Figure 4.4 Technology Strengths (nature of the product and the maturity of the organization)

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Systems: Figure 4.5 An Integrated E-commerce Systems Architecture

CustomerCustomer

Customer

Front Office--Internet Portal

KnowledgeManagement

ERP

Back OfficeTransaction Processing

ERP

Back OfficeTransaction Processing

Supplier ERP Interface

Back Office -- Internet Portal

DataWarehouse

Management

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Staffing:Figure 4.10 The Organizational Level HR Requirements

Information Systems Organizational Structure

Strategic development and business planning including

IS planning

Functional level informationtechnology planning

Project scoping and planning

Application development and implementation

Executive Team

TechnicalSystems

RelationshipManagement

ERP

Call Center

Customer

Supplier

KM

DW

3Cs

3Cs

3Cs: Capture, Cultivate, and Create employees and their skills - are managed and coordinated through the executive teams

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Six Vital Drivers for e-Commerce

1. The obsessive and continuous focus on the business imperative,

2. Interpretation of external IT success stories, 3. Establishment and maintenance of IT

executive relationship, 4. Concentration of the IT development effort, 5. Achievement of a shared and challenging

vision of the role of IT

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Style and Shared Values - Definitions

Style: “characterization of how key managers behave in achieving the organization’s goals; also the cultural style of the organization,”

Shared values: “ the significant meanings or concepts that an organization utilizes to drive towards a common goal through common objectives and a common value set.”

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Style and Shared Values:Figure 4.11 - The Dimensions of an Agile E-organization

Low TransactionCosts

E-org

Scale&Scope

Scale&Scope

Scale&Scope

MassCustomization

Flexibility

Key characteristics to achieving an agile e-organization are three initiatives:

1. The drive for flexibility in process.

2. The drive to lower transaction costs.

3. The drive to achieve mass customization for the customer.

N

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1. StrategyIssue: Focus upon alignment and planning

Action Items:

The CIO must have a clear vision of the technology horizon and be able to communicate the implications of these new technologies to the CEO and the business.

Build a lead-time buffer for organizational learning between the technology horizon and the deployment of that technology.

Create a roll-in, roll-out technology window; new technology becomes an emerging core technology, transitioning to core before finally declining and being discarded.

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2. StructureIssue: Focus upon becoming an e-organization

Action Items:

Strive to balance organizational and technical strategies.

Youthful companies must exploit the flexibility and low-cost structure to complete. Aiming to capture self-knowledge and market knowledge to fend off existing organizations.

Mature organizations must leverage their extensive self-knowledge and market knowledge in order to reduce their costs and recreate their processes in a more flexible manner.

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3. SystemsIssue: Technology integration

Action Items:

ERP deployment: Automation without change is detrimental; the EPR must be deployed with the aim of generating greater organizational self-knowledge, flexibility of process, and lowered operational costs.

Data warehouse: Focus upon the two dimensions of data warehousing: cost efficiency, using the ERP data through the data warehouse to reduce operational costs, and information effectiveness to generate competitive intelligence in the form of added-value information services.

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3. SystemsIssue: Technology integration (Continued)

Action Items:

Knowledge management: The focus of the knowledge management system is to inform and add value, not to be a “look-up table”. The creation of a metrics-based scored approach to the utility of the knowledge management system is vital.

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4. StaffingIssue: The role of the CIO

Action Items: Create a strategy for retaining and maintaining a strong

pool of skills both at the executive level and at the technical level.

Think outside the box for staffing solutions, and identify partners and consultants that could assist the process should internal skill sets be unavailable.

Many issues surrounding staff development have traditional solutions that involve building trust, communications, and growth opportunities for the employee, as well as the organization understanding the value of the employee and the employee adopting the values of the corporation.

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5. SkillsIssue: The role of the CIO

Action Items:

The CIO must continue to add value through traditional routes, but adding to this list the ability to Capture, Cultivate, and Create an employee base with vision, technical skill, and creativity.

Relationship management: This is a driver that requires heightened attention and focus by the entire organization’s early warning system of change in the marketplace and in customer needs.

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5. SkillsIssue: The role of the CIO (continued)

Action Items:

The heightened necessity to nurture employees and develop the organization’s internal flexibility, creating a dot-com atmosphere of excitement , drive, openness, and creativity within the corporation.

Technical skills: More than ever the CIO must develop crossover skills and the entrepreneurial atmosphere of the new dot-com organization to leverage an integrated ERP, KM, and DW technology position.

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6&7 Style and shared valuesIssue: Leadership

Action Items: Leadership has to come from the very highest reaches

of the organization. Technology allows organizations to add value to

customers through provision of information services. A technology strategy does not come solely from

technology but is based upon leverage the technology through marketing, service, and branding to deliver added value to the customer in the form of information.

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6&7 Style and shared valuesIssue: Leadership (continued)

Action Items: A technology leadership strategy must build value to

the organization, delivering the information the organization requires in order to get closer to the customer and/or wider market coverage as determined in the overall strategy plan of the organization.

The strategy technology plan must be aligned with the overall plan of the organization.

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Developing a Market Focus:Sector Strategies in Segmenting Markets

The importance of market leadership through the Internet channel has rapidly become an important strategy item for established organization.

E-C companies realize that they have to rise to the challenges posed by their virtual competitors in both cyberspace and in traditional marketspaces.

Ch. 5

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Figure 5.1 The Marketspace Spectrum of E-commerce

Internet-basedOrganization

BanksMortgage brokers

InsuranceNewspapers

ManufacturingA Mixed Service

and Goods Organization

An InformationService

Organization

AutomobilesClothing

Machine tools Computers

Hotels, Air lines Consumer Electronics

Medical Systems

Service Production

InternetMarkepspace

InternetMarkepspace

N

84

Figure 5.2 Internal and External Views of CA-Chemical’s Internet Relationship

Community

Greater AccessTo information

And Data

Corporate

Partners

Recruiting

ClinicalDevelopment

HumanResources

Better InternalDatabase Access

Study CenterRelationships

Cycle TimeReduction

ScientificCommunityAccess and

NetworkResearch

Manufacturing

401K

Benefits

NewsGroup

InformationBanks

InformationSites

MDs, Physicians,and Study Centers

Procurement

Partners

Internal ViewFunctional Area External View

HumanResources

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Figure 5.3 Sony Market Leadership

Create bonds and strongrelationships betweenpartners. Develop a

leading market,technology leadership

position

Flexibility,change,andlong-term desirability

Partnering

Market leadership

Internally drive theorganization to

accommodate changethrough internet and digital

technologies. Create long-termcustomer ”buy-in”as technologyBrand leadership creates loyalty

Create the ability of alltechnologies to connect

together

ConvergentBranding

Create aunifiedglobalbrand

TechnologyIntegration

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Figure 5.4 US Medical Systems Market Leadership

Increased Customer

RelationshipQuality

Brand

Service

Market Leadership

reinforce viatechnology

ComplementThe

Organization’sproducts

Marketing

WiderMarket

Coverage

Technology

FacilitateInteruser

Communication

Focus uponKey issues:

Responsiveness,Delivery,etc.

ExpandGlobal brand

Create aUnifiedGlobalbrand

87

Rules of Internet Strategy:Market Leadership 1. Determine the degree to which you will remove or offer

alternatives to the layers of intermediaries that exist between the organization and the customer through the internet channel.

2. Disintermediation is not always positive. Play to your advantages – if you have a strong retail presence utilize it; it is a strength online rivals don’t have immediate access to on their own.

3. Regardless of product, you need a basic internet presence and you need to offer value to the visitor. Even if that is merely traditional contract information, present it in such a way that the brand is reinforced.

88

Rules of Internet Strategy:Market Leadership (Continued)

4. Carefully align your internet strategy with your overall business strategy.

5. Avoid frequent and abrupt changes of internet strategy direction.

6. Develop a cohesive strategy across all brands. 7. Make your market leadership strategy consistent with

the branding strategy in the eyes of the customer, not just in the eyes the executives of the advertising agency and marketing groups.

8. Develop a strategy before developing a Web presence.

89

Rules of Internet Strategy:Market Leadership (continued)

9. Develop an IT infrastructure to cope with and integrate the changes brought on by a Web presence before they occur. This may be a viable partnering growth opportunity with a technology vendor.

10. Don’t bring an e-commerce solution to the marketplace before it is ready or before the marketplace is ready for it.

11. To get closer to the customer, you must add value for that customer and continue to add value as the requirements of that customer change over time.

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Rules of Internet Strategy:Market Leadership (continued)

12. Derive flexibility and transaction capability from the technology infrastructure upon which the Web presence is based.

13. The Web allows product-based companies to offer new information-based products through the low-cost, omnipotent distribution mechanism of the Internet.

14. If the goal is mass customization, then incorporate the ingredients of speed, innovation, agility, and technology and leverage them through the internet relationship with the customer.

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Rules of Internet Strategy :Market Leadership (continued)

15. Low-cost commodity producers are not immune from the threat of information-added-value competition from within their industry as generated by large, traditional market competitors through the internet.

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Service Leadership:Adding Value to the Customer at Every Point of Contact

For pure Internet-based service organizations, it has come to mean fast, reliable service that is efficient to use and seamless in delivery.

Customers expect the low cost of transactional services via the Internet to be matched by easy-to-use, ergonomic interfaces, backed up by an information-rich premium, global, 24x7 level of service.

Ch. 6

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Figure 6.1 Internet Service Value Chain(From Bricks-and-Mortar to Clicks-and-Mortar Transition)

CustomerSupport

(DuringPurchase)

CustomerFulfillment

(PurchaseDispatch)

Customer Service Channel

CustomerAcquisition

(PrepurchaseSupport)

CustomerContinuance

Support(Postpurchase)

BrandReinforcement

N

The Value Chain is “Where the Rubber of e-Commerce Meets the Road”

The development and execution of a successful strategy in each of the Internet service value chain segments is vital for any organization wishing to operate all or part of its business online

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Rules of Internet Strategy:Service Leadership

1. Established strategies of customer service still apply. 2. Internet service strength is derived from providing added

information to the customer on the customer’s terms. 3. Internet customer service aims to build an affinity

relationship. 4. The Internet provides a low-cost, high-quality service channel

opportunity with a global reach. 5. A call center strategy must be defined. 6. The e-mail interface channel must be defined and planned for. 7. A strategy for the virtual call center must be defined well in

advance of its potential implementation.

95

E-branding: The Emergence of New Global Brands

The development of an online branding strategy is a complex operation and one that clearly needs to be tied into the organization’s strategy as a whole, based on the other three factors: Technology. How are we attempting to leverage the

technology, with what consequence on our brand? Market. What is our market segmentation strategy? How

can we define brands across these? Service. What level of service will we deliver through

this channel - full service, low-cost service? How will this impact our brand?Ch. 7

96

Figure 7.1 Internet Branding Strategies

3. BrandReinforcement

4. BrandReposition

2. BrandFollower

1. BrandCreation

97

Internet Branding Strategies 1. Brand Creation: First to Market Wins and

Wins Big for new start-ups and for corporations moving to the

Internet as a business channel, the formulation of an online brand is vital. Those companies (e.g., Amazon, eBay) not only created a new brand, but successfully executed their business model.

2. Brand Follower: A Last-Mover Disadvantage or Recoverable Position? This is evident in copycat sites that mimic the first,

second, or even third mover in an industry but have little intrinsic value of their own.

98

Internet Branding Strategies (continued)

3. Brand Reinforcement - The Development of a Continuous Brand Model across ALL channels, media, and languages, including the Internet A key to a successful business positioning is to achieve the

position of brand leader - universal recognition of name and product. “Sales may not be the goal of every organization, but ultimately every organization wants to ensure that its brand is reinforced online.”

In order to achieve this, organizations have to provide their customers or viewers with current, relevant information, building the quality of their relationships with customers on a continuing bases --- customers service value chain.

99

Internet Branding Strategies (continued)

4. Brand Repositions: Core Brand Values Combined with a Modern Customer Experience Organizations that move through brand repositioning to

create new channels to complement their existing ones, attempting to add value to the customer through reduced cost and convenience, but also offering a source of information for the discerning consumer.

Repositioning may be radical or gradual, depending on the organization and its branding needs.

100

Rules of Internet Strategy:Brand Leadership 1. In new organization, creation of a brand has to be a

primary strategic objective. 2. Branding strength comes from being first mover in

combination with high visibility and the added value derived from the information surrounding the product.

3. Brand reinforcement is a continuous task. The aim is to use the brand reinforcement process to maintain an organization’s relationship with the customer. This is achieved by continuously adding value to the customer through the site.

101

Rules of Internet Strategy:Brand Leadership (Continued)

4. Brand reinforcement adds significant value to organizations that can inform consumers, but not sell directly, such as drug manufacturers.

5. Brand positioning can be considered using the internet service value chain model, adding brand definition and value at each point on that chain.

6. Added value for the customer comes from continuous and innovative change of the information surrounding the product and the organization.

102


7. Utilize a mass customization approach in order to move closer to the customer and add value to the customer but not at the expense of the brand.

8. The Internet allows low-cost global branding to occur, hence wider market coverage; however, the cultural sensitivities of the global brand must not be lost through the technology.9.

Brand followers need to reposition as quickly and effectively as possible.

103


10. Established organizations that have not established a branding strategy based upon the Internet need to develop one rapidly and align their overall strategy accordingly.

11. Brand repositioning can be an expensive and difficult process. The establishment of strong and vibrant brand at the commencement of online activity is vital.

104

Formulating an Internet Rollout Strategy

E-Commerce as in all aspects of IT and strategy, strategic positioning meant little if it could not be implemented.

The development and hosting of an organization’s Internet presence forms a critical component in the level of success experienced.

Ch. 8

105

Strategies for Developing an Organization’s Website The maturity of the organization The access to skills among its internal technology

group The necessity to create and develop proprietary

technologies The flexibility of the content owners to drive,

control, and harness change The time pressure to be online in the

organization’s virtual marketspace or to lead its market in terms of service and brand

106

The Rollout of an e-Commerce Implementation

The rollout of an e-C implementation is composed of two dimensions: Site development

where strategic goals, ownership issues, and technology all converge to produce a working system

Website hosting selection of, and deployment to, a location or

organization where the system hardware and software will be physically located, maintained, and managed.

Information System Department

Internal R&D Team

(Skunks

Works)

Partnering Mode

E-C systemsinfrastructure

Corporate Ownership & Leadership

InternetSystems

DevelopmentCompany

Internal Customer

Added Value

ExternalCustomer

AddedValue

INTERNAL

EXTERNAL

Internal development route External development routePartnering route Request for proposal System deployment

ProcessIntegratio

n

Figure 8.1: Dimensions of Corporate Internet Development

108

Development Options:Where to Develop an e-Commerce System

Three Basic Development Practices: 1. Internal development

Corporations create their eC systems within the boundaries of their organizations. (for early movers)

2. External development The system’s development is largely outsourced to third

parties to obtain the desired results. 3. Selective sourcing or partnering

External vendors are brought on-site to assist in the development process.

N

109

Table 8.1: E-commerce Development Options --Their Strengths and Weaknesses

Internal . Allows proprietary systems . Cost-can be very expense to Development and technologies to be first mover

developed . Resource intensiveness-continuous . Maximizes internal learning need for new skills and

technologies . Maximizes system integration . Commitment from all parties

External . Taps into existing expertise . Cost-not a one-time cost; little Development . Offers a variety of external payback in the form of

internalization services of learning

. Gets up to speed quickly . Cookie-cutter solutions--vendors using same ideas and formats over

and over again . Difficulty monitoring and

controlling . Service limitations--advantages

gained through flexible partnering may be offset by the necessary to monitor and control those relationships

Major Strengths Majors Weaknesses

110

E-commerce Development Options --Their Strengths and Weaknesses (continued)

Partnering . Offers variety . Lack of experience-partners may be

. Gets up to speed quickly overextended; too little time for each . Allows flexibility clients

. Lack of experience-experience of partners in new technologies

possibly limited, raising risk concerns . Cost- integration costs, monitoring

costs, and cost control issues

Major Strengths Majors Weaknesses

Information System Department

Internal R&D Team

(Skunks

Works)

Partnering Mode

E-C systemsinfrastructure

Corporate Ownership & Leadership

InternetSystems

DevelopmentCompany

Internal Customer

Added Value

ExternalCustomer

AddedValue

INTERNAL

EXTERNAL

Internal development route External development routePartnering route Request for proposal System deployment

ProcessIntegratio

n

Figure 8.1: Dimensions of Corporate Internet Development

Figure 8.2 Determinants of Internet Development Souring Options

PositiveLeadership

Proprietary LeadershipRequirement

FunctionalIntent is Clear

Development speedRequirement

Infrastructure in Place

In-house ExpertiseAvailable

E-commerceStrategy Development

Create ExecutiveLevel Awareness

Internal Development

Clarity FunctionalIntent

Partner

Create Infrastructure toAccommodate functional

intent

yes

yes

yes

yes

yes

no

no

no

no

no HighlyTime

sensitive

No time Sensitivity

- Internal developmentIssues:training&interimSolutions- External developmentIssues:outsource&monitor

OPTIONAL

113

Four Hosting Options

1. Dedicated hosting the company outsources its requirements to a

Web hosting except that the system is located on a dedicated server.

2. Shared hosting an organization outsources the storage,

maintenance, and monitoring of its system to a Web hosting company. Its system is located on a shared server.

114

Four Hosting Options (continued)

3. Internal hosting a company stores, maintains, and monitors its

own systems at its own internal data center. 4. Colocation

a company stores, maintains, and monitors its own information and systems, but utilizes the services of a Web hosting company to store the server.

115

Factors for Making a Hosting Decision

Metrics relating to site performance (from IBM):

Performance Scalability Availability Reliability Simplicity Integration Security

116

Figure 8.3 Building an End-to-End Response Time

Application Design

End-to-EndResponse Time

Web TrafficProfiles

Web PageDesign

Performance& Capacity

ServerConfiguration

NetworkTopology

N

117

Internet Strategy Effectiveness –A Scorecard Approach

The Internet and e-Commerce presents executives with a new variant on an old problem - “What am I getting out of this technology

investment?”

Ch. 9

118

Internet Strategy Effectiveness –A Scorecard Approach (continued)

Successful CEO-CIO teams should understand the value of an activity-based approach to IT ROI analysis 1. The creation of an ROI value criteria 2. Creation of a metrics program to monitor the ROI

value criteria 3. Data capture 4. Actual ROI analysis from the metrics data

119

Approach of selling online or just advertising the site to reinforce the brand

1. Determine forces of internal and external to the organization that influence the organization’s e-Commerce strategy formulation.

2.Create a metrics program based on the use of value criteria in the form of an Internet effectiveness scorecard (use of activity-based ROI analysis).

3. Determine the effectiveness of the value criteria at the ownership levels, the process levels, and the transactional levels.

Figure 9.1: Forces in Strategy Formulation

Forces Externalto the

Organization

MarketspaceRivals

Internet SiteIntegration withExisting Serviceor Manufacturing

Process

Metrics

Ownership

Development

Customer

CustomerE-commerce

Site Interaction

CustomerMarketspaceInteraction E-commerce

Environment

E-commerceSite Feedback

StakeholderInputs

SystemConstraints

Forces Internalto the

Organization

StrategicGoals

CustomerDynamics

MarketspaceForces Stakeholder

Inputs

N

Develop Metrics program

-What does the customer expect?-How does this relate to our

overall strategy?-Channel considerations

-Transaction - versusinformation-based products

Manufacturing/Service Product Ownership Focus Group

Create or updateInternet presence

Create or updateInternet presence

Creation of internet strategyEffectiveness Scorecard

Create metrics for internetEffectiveness Scorecard

Monitor Metrics

E-value map analysis Analysis ofInternet Effectiveness scorecard

Against E-strategy

Financial ROI Analysis Process ROI Analysis

Value Criteria

Financial Ownership FocusGroup

Start Point

Initial vanity page

Figure 9.2Creation of an E-commerce Metrics Program

Updatemetrics

Updatemetrics

UpdateValue Criteria

UpdateValue Criteria

122

Internet Effectiveness Scorecard The scorecard is divided into the following

seven sections: Financial impact Competitive Leadership Brand Service Market Technology Internet Site Metrics

Table 9.1 Effectiveness Rating Scale

Scale Effectiveness Description

1 Ineffectiveness Had a strongly negative impact on reaching the

goals(s) the organization was trying to achieve

2

3 Negative Had a negative impact on reaching the goal(s) the

organization was trying to achieve

4

5 Neutral Had no impact on reaching the goal(s) the


6

7 Positive Had a positive impact on reaching the goal(s) the


8

9

10 Highly effective Had a very positive impact on reaching the goal(s)

the organization was trying to achieve

TM -123

ΣER/5=

1. FinancialImpact

Metric ForecastInitial Goal

ActualResults

IndustryBestPractice

EffectivenessRating

Was your strategyeffective as a mechanismfor reducing costs?

Was your strategyeffective as a mechanismfor generating revenue?

Was your strategyeffective as a mechanismfor transferring revenuesto a low-cost channel?

Was your strategyeffective as a mechanismfor increasing marketshare?

Was your strategyeffective as a mechanismfor increasing transactionvolume?

TM -124

2.CompetitiveLeadership


ActualResults


EffectivenessRating

Was the effectiveness of yourdevelopment increased bythe involvement and supportof the CEO, CIO, or othersenior executive from theoutset?

Did the technologyeffectively add value to yourcustomers through provisionof information services?

Were the organizational andtechnology strategy planseffectively aligned?

Was our approach to thesourcing of the developmenteffective in achieving thegoal of rapid systemdeployment?

Did the Web technologyeffectively reduce the costsassociated with updating ourcustomers’ informationrequirements?

TM -125

ΣER/7=

Continued

2.CompetitiveLeadership


ActualResults


EffectivenessRating

Did the technologyeffectively allow theorganization to leverage itsexisting brand, products,and strategy?

Is the technology effective inallowing the organization toget closer to the customer(and/or attain wider marketcoverage)?

TM -126

3.Brand Metric ForecastInitial Goal

ActualResults


EffectivenessRating

Was being an early mover incombination with highpresence visibility aneffective strategy?

By adding information theproduct to the site, did weeffectively add value to thebranding strategy?

Has brand reinforcementbeen an effectiveintermediate strategy priorto offering online sales andservices?

Is brand reinforcement aneffective strategy where weare prevented from sellingonline?

Is continuous and innovativechange of the informationsurrounding the productsand the organizationeffective in adding value tothe brand?

TM -127

3.Brand Metric ForecastInitial Goal

ActualResults


EffectivenessRating

Is mass customization as anapproach to internetbranding an effectivestrategy for theorganization?

Is the internet an effectivemechanism for facilitatinglow-cost global branding?

As an organization that hasnot created a brand positionon the internet, is itnecessary to create aneffectively as possible, andare we achieving this?

ΣER/8=

Continued

TM -128

4. Service Metric ForecastInitial Goal

ActualResults


EffectivenessRating

Are established strategies ofcustomer service stillapplicable and in effect?

Is the effectiveness ofinternet service strengthderived from the addedinformation provision to thecustomer on the customer’sterms?

Is the organization’s internetcustomer service effective inbuilding a significantaffinity relationship?

Does the internet servicestrategy provide an effectivelow-cost quality servicechannel opportunity with aglobal reach?

Must an effective e-mailchannel strategy be definedand planned for in advance,and did we achieve this?

TM -129

4. Service Metric ForecastInitial Goal

ActualResults


EffectivenessRating

Must an effective virtual callcenter (at the internet site)be defined well in advanceof its potential implications,and did we achieve this?

ΣER/6=

Continued

TM -130

5.Market Metric ForecastInitial Goal

ActualResults


EffectivenessRating

Did we develop an effectiveinternet strategy prior todeveloping a web presence?

Did we develop an effectiveIT architecture to cope withand integrate the changes tothe organization caused bythe Web presence?

In order to compete in theinternet space effectively,was it necessary to align theinternet strategy with theoverall business strategy,and did we achieve this?

Did our organization(regardless of product) needan effective internetpresence that offered valueto the customer (visitor),and did we achieve this?

TM -131


ActualResults


EffectivenessRating

Do changes in internetmarketing strategy need tobe avoided to allow thecustomer to have effectiveand consistent vision of theorganization, and do weachieve this?

Did we effectively achieve acoherent internet marketingstrategy that is necessaryacross all brands?

To be effective do theproduct marketing andbranding strategies needconsistency in the eyes ofthe customer, and so do weachieve this?

To be effective in gettingcloser to the customer, doesthe internet strategy have tochange over time to meetthe changing demands of thecustomer and the market,and do we achieve this?

Continued

TM -132


ActualResults


EffectivenessRating

Do changes in internetmarketing strategy need tobe avoided to allow thecustomer to have effectiveand consistent vision of theorganization, and do weachieve this?

Did we effectively achieve acoherent internet marketingstrategy that is necessaryacross all brands?

To be effective do theproduct marketing andbranding strategies needconsistency in the eyes ofthe customer, and so do weachieve this?

To be effective in gettingcloser to the customer, doesthe internet strategy have tochange over time to meetthe changing demands of thecustomer and the market,and do we achieve this?

Continued

TM -133


ActualResults


EffectivenessRating

As a products-basedcompany, was the strategyeffective in allowing newinformation based productsto be offered through thelow-cost channel?

ΣER/13=

Continued

TM -134

6.Technology Metric ForecastInitial Goal

ActualResults


EffectivenessRating

Did the technologyinfrastructure provide aflexible base toaccommodate marketchange?

Were the technology partnerschosen responsive?

Do the front office and backoffice systems interfaceeffectively?

What is the mean timebetween failures?

What is the averagebandwidth requirement?

What is the mean time toupgrade a serve installation?

ΣER/6=

TM -135

7.Internet SiteMetrics


ActualResults


EffectivenessRating

The number of hits permonth (as a measure ofcustomers’ interest and sitepotential value)?

The number of purchase perregistered customer permonth?

The average purchase sizeper transaction?

The length of time aregistered customer spends(as a measure of siteinformation value)?

The repeat visit rate byregistered users (as ameasure of site value)

TM -136

7.Internet SiteMetrics


ActualResults


EffectivenessRating

The purchase/hit rate (as anindicator of interestconverted to revenue)?

Other (any other metrics youuse for measuring theeffectiveness of your site)

Description:

ΣER/7=

Continued

TM -137

Level I : Senior Strategic Management Group

Owner ValueCriteria

Metric Target Results ProjectedChang

Effectiveness Rating

CEO Branding Brandequity

Analysis

Top 100brand

ranking

Firstyear of

operation – Rank

164

7% 7

CIO Security MTBF 100%coverage

99.65% -0.05% 9

CFO Revenues

$ perregisteredcustomer

$15 $7 4% 6

Level II: Regional Planning Group

Owner Report Valuecriteria

Metric Target Results Projectedchange

EffectivenessRating

DirectorEuropeanDivision

CEO Brand Priceconsistencywithcompetitors

3%variance

5% 0.8% 8

DirectorNorthAmericanDivision

CEO Brand Customerserviceindex

96% 94% 1.0% 7

DirectorLatinAmerica

CEO Brand Marketpenetration

34% 36% 2% 7

TM -138

Level III: Country Managers Planning Group


Baseline Target Results Projectedchange

EffectivenessRating

ManagingDirectorUK

DirectorEurope

Brand Priceconsistency

3%variance

6% 1% 7

ManagingDirectorGermany

DirectorEurope


3%variance

4% 0.4% 8

ManagingDirector

DirectorEurope


3%variance

3% 0.7% 10

Level IV: Marketing-Automation Strategy Group



EffectivenessRating

Director ofMarketing

MD UK Brand Priceconsistency

85% ofcustomersacknowledgepriceconsistency

78% 13% 7

CIO MD UK Brand Priceconsistency

100%competitorsscanned andthe pricingupdated athome site

97% 3% 8

VPInternet-Partnerrelations


100% dataandinformationexchange withpartners

100% 0% 10

TM -139

Level IV: Marketing-Automation Strategy Group



EffectivenessRating

Director ofMarketing


85% ofcustomersacknowledgepriceconsistency

78% 13% 7

CIO MD UK Brand Priceconsistency

100%competitorsscanned andthe pricingupdated athome site

97% 3% 8

VPInternet-Partnerrelations


100% dataandinformationexchange withpartners

100% 0% 10

TM -140

PreviousCycle

PresentCycle

PreviousCycle

PresentCycle

PreviousCycle

PresentCycle

1.1. Logisticson-timedelivery in-bound

97% 97.2% 96% 97% 89 91

1.2.Logisticson-timedelivery tocustomer

67% 67% 64% 63% 65 67

1.3.Returnstomanufacturer1.4.Out-of-stockrequesteditems

4%

5%

8%

7%

7%

8%

9%

12%

NA

NA

NA

NA

Table 9.2 E-value Map - Example

Baseline Results CSI’

Process Value Criteria Metrics

1. Perishable Products

Product

E-value Map:Strategic Perspective

CSI=customer satisfaction index

TM -141

142

The E-value Map Ownership Value Map Ownership Levels Process Value Map

Results are assessed against the forecasts, and the strategy and systems are modified based on effectiveness and performance.

However, the correlation between the business objectives and the metrics by which they are measured must be carefully assessed.

N

143

Waves of the Future – Issues that will Shape the Formulation of Strategy: Waves of Change

To create a business model, it is necessary to learn from the past but to enable future issues to be debated within their context in a way that they do not become dated and redundant.

However, executives and managers developing their corporate strategy from these business models must tune them to meet the needs of their own corporate environments.

Ch. 10

144

Figure 10.1 The Seven Key Drivers of Change

Government& PoliticalChanges

The AgileE-commerceOrganization

ServiceChanges

MarketChanges

ExternalRelationship

Changes

TechnologyChanges

BrandingChanges

Technology

Most important factors

Leadership factors

Most dynamic change agent

145

Future Waves

1. Develop R&D programs that link pure and applied research with key elements of the organization’s structure and strategy.

2. Harness the power of others’ technologies. Even if it is necessary to pay a license fee or purchase a package, immediate access to the technology outweighs the “build and play” model.

146

Future Waves (continued)

3. Power comes through consortium relationships and the collective knowledge that brings. To extend the technology vision of the corporation, two forms of consortium can be exploited: open-industry-based and closed-proprietary consortia; utilized intelligently this assists in the prevention of technology isolation.

147


4. Develop a wireless dimension to your e-Commerce online strategy. Imagine a customer anywhere on the planet looking for your product by wireless device and wishing to complete the purchase cycle. Could you fulfil the order?

5. Develop a strategy to interact with the intelligent agent of users in the future. Identifying sales leads, negotiating for the sale, and fulfilling the obligation with less human interaction on the part of the customer.

148

Questions executives are facing …(global, wireless, and mobile)

the positioning of their advertising on a cell phone display

their advertising-based revenue models for wireless devices

their collection and payment mechanisms for a global customer whose only contact point is an IP address

how digital product layering will be rolled out

149


6. Develop a multicomponent strategy for the creation and protection. Focus on brand leadership, brand stability, and global market positioning through proactive corporate policies.

7. Successful nimble and agile organizations will rely on speed to market and continuous innovation rather than protection under the law.

N

150

Brand Changes Key to managing brand in the future will be the

determination of and management of brand equity - a financially related value on the customer-based equity of brand images and associations.

Four major drivers of brand equity Brand name awareness Brand loyalty Perceived quality Brand differentiation

151

Brand Changes (continued)

While developing branding strategy, the organization should consider: Will the technology divert the organization from our

brand position? Will the customer change her perception of our

products if we change our customer relationship management

What are the implications of the technology on the existing traditional brand drivers?

152


8. Change is the only constant but, to keep the customer-organization constant, the organization and its use of technology must change constantly.

9. An e-consortium will develop to supply the customer-centric environment with all its needs, focusing multiple organizations and their products through one information hub.

153

Figure 10.2 Internet Service Value Chain(Service Changes - Evolving to Meet the Changing

Expectations of the Customer)

CustomerSupport

(DuringPurchase)

CustomerFulfillment

(PurchaseDispatch)

Customer Service Channel

CustomerAcquisition

(PrepurchaseSupport)

CustomerContinuance

Support(Postpurchase)

N

The development and execution of a successful strategy in each of the Internet service value chain segments is vital for any organization wishing to operate all or part of its business online The value chain models the development of an organization’s

relationship with a customer over time

BrandReinforcement

154


10. The status of agile enterprise is not necessarily on the evolutionary road for all of today’s organizations.

11. Information hubs of a specialist nature will cut down on the search requirements and effort needed to locate data as the Web continues to expand.

155

Figure 10.3 Three Factors Impacting Market Change

MarketSegmentation

GlobalMarket

Development

MarketHubs

MarketDynamics

N

156


12 Intergovernmental issues on privacy, access to information, and free trade will become more important as e-C becomes increasingly global and lucrative.

13. The battle for ownership and control over the virtual intercorporate value chain will become a new venue for competitiveness.

157


14. International treaties and trade groups will become less potent as the customer takes control of markets through the Internet.

N

158

Future Directions:Agile and e-Organization Confluence

The virtual economy will reshape the very nature of organizations, forcing them to transform themselves from rigid structure to agile structures.

The organizations will move from competitive strategies based on scale of economy to competition based on low-volume, mass-customized production and from vertical and horizontal structures to polymorphic structures composed of communities of collaborative e-Commerce.

159

Commentary on the Road Ahead

No organization is immune to the contact and presence of the Internet and the technology that surrounds it.

Those organizations that are successful going forward will be those who manage to balance their strategy in all of its areas; those organizations that are very successful will be those that manage not only to live within the waves of change but to influence them.

160

THANKS and GO for your e-Era !!

Documents

E-Commerce: Formulation of Strategy Jason Chen, Ph.D. Senior Consultant TASKCO.COM.TW [email protected] [email protected]