Roadmap for e-business implementation in Extended Enterprises Page 1 Project funded by the European Community under the ‘Competitive and Sustainable Growth’

Roadmap for e-business implementation in Extended Enterprises

Page 1

Project funded by the European Community under the ‘Competitive and Sustainable Growth’ Programme (1998-2002)

e-volution – Road map for e-business implementation in Extended Enterprises

Training material for e-volution methodology


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Table of content

Introduction

Methodology Module 1: Definition of Business Objective System

Methodology Module 2: Organisation Analysis

Methodology Module 3: Market Analysis

Methodology Module 4: E-business Strategy and Roadmap Formulation


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Introduction


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The e-volution concept - successful implementation of e-business in Extended Enterprises

e-business road e-business road mapping methodologymapping methodologye-business road e-business road mapping methodologymapping methodology

Software toolsSoftware toolsSoftware toolsSoftware tools

The methodology is the starting point for the use of phase specific, supporting software tools.

Training packageTraining packageTraining packageTraining package

The e-volution training package is for transfer and teaching how to apply the e-business road mapping model, methods and tools.

Content ServiceContent ServiceContent ServiceContent Service

Based on approved models, e-volution offers an e-business road mapping methodology that fulfils the requirements of a systematic and goal-oriented planning of e-business implementation.

The e-volution Content Service disseminates the e-business road mapping model with its methods and tools but also know-how about e-business.

Market analysis

Definition of businessobjective system

Organisation analysis

e-business strategy androadmap formulation

e-business operation

e-business requirementanalysis

e-business implementation

OUT OF PROJECT SCOPEROADMAP IMPLEMENTATION DECISIONPROJECT SCOPE

METHODOLOGY

SUPPORT

Methodology + Tool Training

TOOl SUPPORTTOOL SUPPORT

e-business design


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Methodology Purpose Enabling methodology for implementation, adaptation and

optimisation of e-business strategies for Extended Enterprises, covering the whole supply chain

Consolidation of existing and new know-how, methods and instruments, and expertise from science and consulting praxis for e-business strategy development in an integrative approach

Framework for integration, processing and coordination of e-business related management activities

Fields of application Strategic e-business planning inside EE constellation as

enabler for the EE business concept Preparation of e-business related decision making

Concept Thematic modules Methods Instruments

Market analysis








METHODOLOGY

SUPPORT



e-business design


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Software tool-kit

Purpose Integrated software suite to support and enable

efficient methodology application (e-volution tool-kit) Interactive tools for use within workshops, individual

or remote working sessions Data and information processing, documentation and

reporting

Fields of application Data and information processing Management decision support Data warehousing

WEB


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Objectives and benefits of the training concept

• Development of overall understanding about the e-volution concept and how to use the methodology and software tool-kit in practice

• Development of skills for method and software tool application by target groups in practice


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Agenda: Training on Methodology Module 1

Step 1: Introduction– Purpose and objectives, structure, positioning– Practical application environment

Step 2: Methodological approach

Step 3: Tool-kit support


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Module 1 purpose and objectives

Module purpose • development of a common and homogeneous understanding about the enterprise, its high-level business objectives and strategies

• analysis, description and presentation of hierarchy of business objectives for the Extended Enterprise as well as the single enterprise

• Provision of:

1. decision support regarding solution alternatives

2. transparency about the position of an entity resp. its contribution to the organisation’s success

3. communication of changing framework conditions in an entity


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Field of application • strategic enterprise positioning• strategic enterprise planning• development of corporate enterprise identity• business model specification• enterprise presentation and business purpose

communication


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Module 1 structure

Definition of strategicbusiness objectives

Enterprisebusiness

vision definition

Enterprisebusiness

mission definition

Enterprisebusiness

objective definition

Market analysis








METHODOLOGY

SUPPORT



e-business design


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Relationships to other methodology modules

Market analysis





analysise-business implementation


METHODOLOGY

SUPPORT



e-business design

Module 3: Market Analysis• Detailed analysis about markets

segments, position, competitors and customers

Module 4: e-business strategyformulation• Strategy development and

assessment• Roadmap definition

Module 2: Organisation Analysis• Detailed analysis about the EE

organisation from structural, competence and ability points of view


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Module 1 practical application environment

Organisation • Intra- or inter-enterprise workshops or online session

• Definition of key personnel participants (max. 20 participants) from different entities

Demands on participants • Knowledge about enterprise, direct enterprise environment, market, and general business environment

Time need • Central workshop approach: 1-2 workshops

• Decentralised web-based online sessions: predefined period of time


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Web-based online sessions

• Platform configuration and preparation

• In-advance information (purpose, objectives, benefits, participants, organisation)

• Invitation (access information, time schedule)

• Reporting

Preparation of coordinator/moderator

Workshop

• In-advance information and invitation of participants

• Presentation material

• Moderation methods and instruments (e.g. Flipchart, Overhead, Beamer, Meta-Plan)

• Documentation and minutes


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Module 1 overview

Definition of strategicbusiness objectives

Enterprisebusiness

vision definition

Enterprisebusiness

mission definition

Enterprisebusiness

objective definition

Market analysis








METHODOLOGY

SUPPORT



e-business design


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Enterprise business vision/mission definition

Fundamentals • enduring statement that distinguishes one enterprise from other similar enterprises

• important to• insure unanimity of purpose,• arouse positive feelings about the enterprises,• provide direction,• provide a basis for objectives and strategies,• serve as a focal point,• create consensus on specific strategies and

objectives,• resolve divergent views among managers


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Enterprise business vision definition

Writing the business vision for the enterprise

Visualisation, discussion and assessmentof individual business visions

Decision about vision statement of the enterprise

Formulation and publication of business vision


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Purpose "What does the enterprise want to become?"• first step in strategic business planning• clear vision provides the foundation for development

of a comprehensive mission statement• direction of all business actions toward this vision

Content • enterprise's sense of future direction• dream for an ideal state• concise declaration of the direction that an enterprise

is planning to take into the future


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Design guidelines • short• preferably• meaningful• one sentence• Instigation and inspiration for action and achievement

among employees• Integration of motivation• Integration of changing aspects or motivation


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Enterprise business mission definition

Writing the business vision for the enterprise

Visualisation, discussion and assessmentof individual business mission

Decision about mission statement of the enterprise

Formulation and publication of business mission


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Purpose • Enterprise definition in a concise and clear manner• Provision of vivid picture of what is unique about the

enterprise to the reader• Alignment of every program and activity in the

enterprise to the mission

Design guidelines • less than 200 words• longer than a phrase or sentence, but not a two page

document• not be too specific (can alienate managers and stifle

creativity)• Inspiring• enduring though not cast in stone


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Content • Customers and target markets• Products/Services for customers• Geographic markets• Technology• Concern for Survival/Growth/Profits• Philosophy (values, ethics, beliefs)• Public Image• Employees• Distinctive competence and Unique Selling Position

(USP)


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Enterprise business objective definitionInformation of participants

Definition and collection of business problems and objectives by means of creativity methods

Clustering of business objectives

Presentation and completion of clustered business objectives

Systems Thinking of business objectives

Priority definition and presentation of business objectives


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No wind is good for someone who does not know where he wants to sail to.

(Montaigne)

Common objectives ...

... align all entities to the same business objectives

Different objectives ...

... result in different prioritiesfor actions

Need for business objectives


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Information

by Moderator overall aim, purpose and approach

by management enterprise vision, mission, guidelines

Participants

Enterprise(s) management, head of departments, works council, employees

Moderator Discussion leader and assistants

Information of participants


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Source: Kreikebaum 1989; Pfeiffer/Randolph 1981; Steinmann/Schreyögg 1990; Zäpfel 1989; -> Planungssysteme

Business strategy

Serves the purpose of definition of high-level business objectives and of general framework for long term enterprise development.

Tactics are mid term specifications of the business strategy in the sense of selection and assessment of relevant business activities

Functional activities

Are for short term realisation of business strategy in practice by means of business activities defined by tactics

Sicherung der Arbeitsplätze durchUmsatzsteigerung von 10% pro Jahr

Gewinnsteigerung neue Produkte undvon 6 auf 10% Leistungen in alten

Märkten



Märkten

- 100% Qualität

ZeitIST

SOLL

Qua

lität

Qualität Ökologie

Ökonomie

Zeit Innovations-fähigkeit

Flexi-bilität

Fundamentals


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Vision

Strategic objectives

Tactic objectives

Functional objectives

Business objective definition process



Märkten



Märkten

Qualität Ökologie

Ökonomie

Zeit Innovations-fähigkeit

Flexi-bilität

- 100% Qualität

Zeit

Qua

lität

Business structure designStrategy formulation

Mission


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Definition of business objectivesSuitable creativity methods• Open discussion• Brainstorming• Feedback method• …Instruments and tools• Flipchart• Pin wall• Empty sheet of paper• …

Shorter delivery times

Higher productivity

Staff training

Better delivery quality Less process

interfaces

Better coordination

Closer customer

relationships

Work time concepts

Tools• Web-based discussion and

communication platformWEB


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Product Information Service Marketing

Reklamations-quote

Anforde-rungsgerech-tes Produkt...

Qualität der Unterlagen

Übersichtliche Kataloge

...

Ständige Ansprechbar-keitKundenservice

...

Verbindliche Zusagen

Liefertreue

...

exte

rnal

Kundenge-rechte Verpackung...

Reklamations-bearbeitung

...

Reaktion auf Kundennach-fragen...

inte

rnal


e.g. Balanced Scorecard (BSC) concept e.g. Main business objectives

Time/Costs/Quality/Flexibility/Ecology/…

Source: Kaplan, R. S.; Norton, D. P.: Balanced Scorecard, 1997


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Cause effect analysis of business objectives

Definition of interactions and dependencies of business objectives and identification of system impact and control variables

e.g. System Thinking and System Dynamics

Influence

Impact

Elements don‘t have to be observed, represent only impacts but no cause

reactive criticalThe right appraisement of efforts for the observation of elements is fundamental here

uncritical

These elements have to be observed marginally, elements only have weak influence

active

Observation of elements in any caseEarly indicators


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Priority definition by means of one-by-one comparison

Inno

vatio

n

Tim

e

Cos

ts

Fle

xibi

lity

Eco

log

y

Qua

lity

Innovation

Time

Costs

Flexibility

Ecology

Quality

0 less important1 Same importance2 More important

… than

0

1

2

0

0

0 0 0

0 0 0

2 2

2

2 2

2 2

2 2

2 2

0

0

0

0

12 7

4

7

10

1

1

1

1

Tot

al a

sses

smen

t

Time

Costs

Quality

. . . . . .

. . . . . .

. . . . . .

Objective clusters are prioritised by means of one-by-one comparison


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Saving jobs by annual turnover increase of 10%

Profit increase from New products and von 6 auf 10% services in existing

markets

Saving jobs by annual turnover increase of 10%

Profit increase from New products and von 6 auf 10% services in existing

markets

Quality Ecology

Costs

Flexi-bility

Time Innovation

Presentation of business objectives by means of pyramid of objectives

Starting point for strategic organisation and market

analysis

Guidelines for process and organisation design


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OrganisationAnalyser General features• features the resource based strategic business situation analysis in an

EE regarding mainly qualitative aspects of an organisation• based on an interview approach• provides a set of basic, interview and questionnaire templates• open for individual configuration• runs as a web application on Windows 95/98/2000/NT/XP

systems• The OM tool features identification of EE partners goal system

(mission, vision, goals), competences and e-abilities as basis for strength and weakness analysis

The OM software tool is:• Interactive: The user is provided with appropriate questionnaires for

data and information input, inputs are recorded, information is assimilated, analyses are performed, and results are displayed for the user

• Participative: The tool provides a network environment for collaboration between different users. Users complete the process and all of their responses are combined and analysed as a group to accurately account for all individuals and to effectively represent the collective knowledge of all participants

• Configurable: The tool provides functionalities for customisation or development of user specific analyses

Analysis of EE partners system of business objectives (mission, vision, objectives)


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OrganisationAnalyser General Features Data acquisition and analysis software for inquires

Web-based for decentralize, time independent processing Online (Internet and Intranet) and offline (local) applicable Project oriented user management Inquiry management

numeral inquire methods Free configurable inquire possibilities Free scaling (number of users and inquires) Analysis- and documentation function

e-volution Features Analysis instrument for specific EE levels

Strategic level (goal system) Socio-informal level (competencies and skills) Information level (competencies and IT-infrastructure)


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Administration

User roles and rights

• Administrator: user management

• Interview manager: interview management (design, invitation, processing, analysis)

• User: registration, interview processing


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Interview processing

• Structure: Interview\questionnaire\question

• By going step by step the user will be introduced to the structure

• Fixed structure, designed by interview manager

• There can be numerous questions to different topics

• Each question has its own evaluation

• No need to do answer questions at, multi-session option


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Interview analysis

• Analysis by Interview manager

• Standard analysis and report options: diagrams, lists

• Export function to MS-Excel


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Module purpose • identification and analysis of organisational aspects which have affects on the development of an e-business strategy and how they affect the decision making process

• Methodological approach and supporting software tool for resource based EE analysis

• Identification of e-business use, practices and potentials based on organizational ‘hard’ and ‘soft’ facts

• Identification of organization related strengths and weaknesses as basis for e-business strategy development within the scope of EE concept realisation

Provision of:

1. decision support regarding solution alternatives

2. transparency about the position of an entity resp. its contribution to the organisation’s success

3. communication of changing framework conditions in an entity


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Field of application • Business objective system definition• analysis of organisational, technological and human

e-competences • strategic forecasting and early warning analysis• core competence analysis, the life-blood of the EE, as

basis for realisation of extended, more competitive products and services

• collaborative and transparent EE benefit definition


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Module 2 structure

Market analysis








METHODOLOGY

SUPPORT



e-business design

e-businessability analysis

Corecompetence

analysis

EE benefitanalysis

Strength-Weakness definition

e-businessability analysed

Corecompetence

analysed

EE benefitanalysed

Market analysis

Strengths-Weaknesses defined

StartOrganisational

module

Strategic EarlyWarning System

analysis

SEWSanalysed

Need for SEWSAnalysisidentified


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Market analysis







METHODOLOGY

SUPPORT



e-business design



Module 4: e-business strategyformulation• Organizational analysis is basis

for identification of interfaces for the roadmap definition

Module 1: Business ObjectivesAnalysis• Create common understanding of

EE business objectives• Basis for targeted e-business

strategy formulation


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• Definition of key personnel participants (max. 20 participants) from different departments

• No need for different EE-partners at one point of time

Demands on participants • Knowledge about enterprise, certain departments, financial situation, strategic background and purpose, e-business situation for the whole enterprise and strategic objectives, as well as about direct enterprise environment

Time need • Central workshop approach: 2-3 workshops

• Followed by decentralised web-based online sessions: predefined period of time


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Web-based online sessions

• Platform configuration and preparation

• In-advance information (purpose, objectives, benefits, participants, organisation)

• In-advance need for information collection from the participants side – scripts handed over at workshop

• Invitation (access information, time schedule)

• Reporting


Workshop

• In-advance information and invitation of participants

• Presentation material to prepare online session

• Moderation methods and instruments (e.g. Flipchart, Overhead, Beamer, Meta-Plan)

• Documentation and minutes


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Module 2 structure

Market analysis








METHODOLOGY

SUPPORT



e-business design

e-businessability analysis

Corecompetence

analysis

EE benefitanalysis

Strength-Weakness definition

e-businessability analysed

Corecompetence

analysed

EE benefitanalysed

Market analysis


StartOrganisational

module


analysis

SEWSanalysed

Need for SEWSAnalysisidentified


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Input data from Module 1

• enduring statement that distinguishes one enterprise from other similar enterprises

• enterprise's sense of future direction

Business vision definition

• Enterprise definition in a concise and clear mannerBusiness mission definition

• Basis for strategy development

• Definition of all objectives

• Clustering of objectives

• Prioritising of goals (e.g. with BSC)

Business objectives definition


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EE benefit analysisObjectives Definition of expected performance potentials of EE

members Possible benefit potentials are complex

can be divided into four main categories: resources, risks, costs, and results

Independent assignment

Results Overview of benefits for all independent and interdependent

enterprises Results should be used for the OM analysis Results should be pointed out and used in the ongoing

analysis


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EE benefit analysis balancing of partners’ resource deficits Development of resource compound effect (synergy),

addition and/or supplementation

RESOURCE benefit

error adjustment due to the availability of increased partner’s know-how within areas such as development, production or marketing.

RISK benefit

Cost digression can be reached because of size advantages with the help of determined merging activities and a resulting better use of technical and human resources

COST benefit

broader utilization spectrum of single performances and/or products by the combination of the product and service spectrum, which are brought by the partner into co-operation, to complete performance, which makes the development of the extended and quantitatively attractive field of application possible

RESULT benefit


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E-business ability analysis

Objectives Identification used e-applications in each organization regarding the

processes Identification of processes where e-applications are used most Evaluation of product employee competencies regarding the e-

applications Additional questions regarding the awareness and the importance

of e-abilities in the screened organization

Results Overview about existing bought or self-made e-applications, there

importance to the enterprise and the importance given to e-applications and e-abilities at all

Information should be used for the following: Interface design between EE partners (compatibility analysis) Intra- und inter-enterprise strengths and weaknesses analysis

regarding e-abilities and e-business strategy development

Start

ICTInfrastructurerequirement

analysis

Machineryinfrastructurerequirement

analysis

Human capabilityrequirement

analysis

ICTInfrastructurerequirement

analysed

Machineryinfrastructurerequirement

analysed

Human capabilityrequirement

analysed


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E-business ability analysis

Identification of currently already IT-supported businessoperations

identification of used applications

specification of e-business application type

assessment average user qualification regarding e-business application type

analysis of additional issues


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harbour ICEBERG

Monitoringof targets

Monitoring

of environment

Locatingthe position

Strategic Early Warning System Analysis


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• find all trends linked to a enterprise‘s future. What are the trends in society, business, economy and technology with relevance to our enterprise? Methods used to help this process are Brainstorming and - writing or so called ‘trend-workshops‘.

• filter all strategic issues. The result of the first step are sometimes between 70 to 100 trends. There is no way to handle this amount of information, the number has to be reduced.

• format all strategic issues. This includes an analysis and search for drivers of the situation, the identification of links between the drivers, the reconfiguration of links and the definition of easy scenarios.

• focus on practical actions: When does a enterprise has to react immediately on strategic issues and how can it monitor future developments with indicators? Monitoring allows a continuous focusing on important aspects.

Sequence of methods - FInd, FIlter, FOrmat, FOcus

Trends relevant max. 20

approx.100 trends

FIND FILTER FORMAT FOCUS


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Trend Finding

Kick-off 1. Trend brainstorming

• Define aims• Know-how

required • Define

participants• Check for

external experts• Design workshop

2. Trend brainstorming

• Invitation • Search for

experts• internal/external

investigation• Market and

customer analysis

• Moderation• Initial Lecture • Global Trends

• Clustering and consolidation

• if needed further internal/ external investigation or market and customer analysis

• Presentation of results

• Discussion, moderation

• conclusion


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The trend 3 Layer-model

enterprise

enterprise specificenvironment

global environment

economy

population

technology

ecology

politics

culture

law

branch

region

customers

suppliers

competitors

core-

competencies

products/solutions

enterprise structure

new generationof managers

Europeanintegration

Tele workHome Office

household

distri-butors

region

marketing

R&Dman

ufac

t.

3 Layer-model


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Filter with the 3 Layer-Model

Workshop „Construction 3 Layer-Model“

• Sort Trends • if needed: Analysis of the

characteristics, core competencies or strength and weaknesses

• if needed: Presentation of global trends

• Moderation, discussion

Workshop „3 Layer-Model“

• Complete Model with global trends

• Construction of the 3 Layer-Model

• Work with the Model • Identification of strategic

options based on trends and competences

• Discussion, clustering and consolidation of the strategic options


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Format by Sytem Thinking/Dynamics approach

Format-Workshop

• Identification of trends linked to the strategic option

• Defining the strength and the correlation of impact

• Building the network

„Network-Workshop“

• Computer based modeling

• Analysis of the network

• Presentation of the network and analysis results

• if needed: online simulation


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Example: Formatting of a strategic option for action

Question on networking: Which trends affect the strategic option for action XY?


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Exertion of influence

Impact

Elements don‘t have to be observed, represent only impacts but no cause

reactive criticalThe right appraisement of efforts for the observation of elements is fundamental here

uncritical

These elements have to be observed marginally, elements only have weak influence

active

Observation of elements in any caseEarly indicators

Focussing: Analysis of the network

Aim of analysis: Which trends have a huge impact in the network?

Result: Identification of the active influencing factors


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Focussing: Analysis of the network example: producer of office furniture

6

Observation of the indicator: „How important is the trend?“


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– Presentation of the enterprise with trends and strengths or weaknesses

– Evaluation of trends

– Deduction of strategic problems and Identification of options for action

– Identification of Indicators

– Reduction of efforts for observation and improvement of ability for early detection at the same time

– Visualisation and thus clarification of the developments

– Gain of knowledge about trends

– Stimulation of creativity in order to use opportunities of external developments

Results Benefit

Results and benefits


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E-business core competency analysisObjectives Selection of basic competencies from set of competences by means of

assessment due to factors like Organization Technique Human Resource

Analysis of balanced, critical, over valuated and basic competencies from set of competencies

Results Overview of core competencies of each EE partner, the trends, the

competitive relevance and the degree of mastery Information should be used further regarding the following concerns:

Evaluation and visualization of companies situation Determining core competencies as a starting point for new products and new

target markets Determine core competencies as a starting point for resource development

in the enterprise

Start

Competenceidentification

Competencesidentified

Definition ofbasic

competences

Basiccompetences

defined

Definition of corecompetences

Corecompetences

defined

Definition of corecompetencedevelopment

strategy

Corecompetencedevelopment

strategy defined


use

SEWSused


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Core competence analysis

1. Identification of organisations abilities along the value chain

E-ability analysis is input Separation due to human, technological and

organizational aspects

2. Identification of organisation's product and service abilities

Identification and evaluation due to the uniqueness/ USP of the product/ service

3. Summary Information should be aggregated for the next step Done by an external person who is more objective Filter main aspects and double counts


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Core competence analysis4. Identification of competences from abilities

Each ability is assessed due to the question to figure the competencies out

Each ability needs to be assessed due to the three next points:

Potential door opener to a variety of markets Significant contributor to customer benefit Difficult to imitate by competitor

Done on a scale from 1-5 (1 means not correct, 5 correct)

5. Summary Abilities should get a value between 3 and 15 Threshold value of 10 → all abilities scoring 10 or

higher should be included in the further analysis


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6. Competence assessment The competencies that have been identified during the

previous steps are assessed and evaluated concerning two evaluation criteria: competitive relevance and degree of mastery by the organisation

Depending on the answers given by the users, the strengths or competences may be labelled core competences or not

5

18

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degree of masteryvery low low high very high

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ce

very

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low

high

very

high

critical competences

balanced competences

Over valued competences

basis-competences


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7. Core competence definition Depending on where (in which quadrant) the

competence is positioned, different types of competences can be identified.

balanced competences (these are positioned along a diagonal axis, where the degree of mastery equals the relevance of the competence)

overrated competences (where the degree of mastery is much higher than the relevance)

critical competences (where the degree of mastery is not as high as the relevance)

basic competences (where the degree of mastery and the relevance or both very high)

5

18

114

17

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2016

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degree of masteryvery low low high very high

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critical competences

balanced competences

Over valued competences

basis-competences


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Core competence analysis8. Strategic forecasting

need for strategic core competences derives from the comparison of current competences with future requirements

Early recognition in strategic management as systematic process for getting and processing information

used for early data collection of environmental changes, which threat or support current and future potentials

aims at the guarantee of sufficient reaction time for developing or implementing adapted strategies

Method: Find Filter Format Focus (FiFiFoFo) analysis

9. Definition of core competency development strategy Depending on the position in the evaluation graph, different actions

should be taken for different outcomes competences are ideally positioned in the diagonal sector of the

balanced competences → may be very important to increase the level of mastery for critical competences, while for overrated competences no efforts should be taken and investments should be cut


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Focus on the indicators of active trends

• Computer based network analysis

• Set up of matrix• if needed: Further

investigation

Indicator-Workshop Presentation

• Analysis of elements behind the active trends

• Building a Mind maps• Discussion, moderation

• Search for leading indicators for the observation of the active trends

• Definition of appropriate measurement units

• Development of a indicator report system or integration in BSC

• Presentation of the defined indicators

• Definition of the research sources

• Definition of responsibilities


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Strength and weakness definition

Module 2Results of enterprise internal, resource based analyses

Results of enterprise external, market based analyses (Module 3)

Strategies to improve current situation

TOWS-Analysis

WeaknessesWeaknesses

ThreatsThreats

StrengthsStrengths

OpportunitiesOpportunities

Minimise or avoid threats

Reduce weaknessesor change into strengths

Use

of

chan

ces

by

stre

ngth

s


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OrganisationAnalyser General Features Data acquisition and analysis software for inquires

Web-based for decentralize, time independent processing Online (Internet and Intranet) and offline (local) applicable Project oriented user management Inquiry management

numeral inquire methods Free configurable inquire possibilities Free scaling (number of users and inquires) Analysis- and documentation function

e-volution Features Analysis instrument for specific EE levels

Strategic level (goal system) Socio-informal level (competencies and skills) Information level (competencies and IT-infrastructure)


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Example: e-business ability analysis in the OrganisationAnalyserObjective Partner spanning analysis of the value chain from the

IT-resource point of view Organization Human Information technique

Evaluation of the current situation and projection on the reference side

Results Mapping of EE-partner abilities and Gap-Analysis Identification of interfaces Strengths- and Weakness Analysis Goal and provision formulation


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Module purpose • Identification of customer requirements regarding products and services that could have an impact on the e-business strategy

• General product, market, customer and competitor analysis as basis for realisation of competitive business model and realisation of results benefits from the EE by use of collaborative e-business model

• e-business related opportunity and threat analysis on enterprise and EE level by comparison with competitors as basis for e-business strategy development

• enabling a collaborative philosophy (if EE partners withhold critical market data those farther away from the end user customer cannot make intelligent decisions)


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Field of application • Market and product assessment• Market attractiveness• Product attractiveness

• Consumer analysis• Competitor analysis• Target market search• Opportunity and Threat analysis


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Module 3 structure

Market analysis








METHODOLOGY

SUPPORT



e-business design


Page 81



Market analysis







METHODOLOGY

SUPPORT



e-business design

Module 4: e-business strategy formulation

• The market analysis is the basis for the SWOT/TOWS analysis

Module 2: Organizational analysis

• As the counterpart to the market analysis here the internal environment is reviewed

Module 1: Business Objectives Analysis

• Create common understanding of enterprise and its objectives

• Basis for organizational analysis


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• Definition of key personnel participants (max. 10 participants) from sales and marketing departments

• No need for different EE-partners at one point of time

Demands on participants • Knowledge about enterprise, certain departments, financial situation, strategic background and purpose, e-business situation for the whole company and future goals, as well as about enterprise markets

Time need • Central workshop approach

• Followed by decentralised web-based online sessions: predefined period of time


Page 84



Web-based online sessions• Platform configuration and preparation• In-advance information (purpose, objectives, benefits, participants,

organisation)• In-advance need for information collection from the participants

side – scripts handed over at workshop• Invitation (access information, time schedule)• Reporting


Workshop• In-advance information and invitation of participants• Presentation material to prepare online session • Moderation methods and instruments (e.g. Flipchart, Overhead,

Beamer, Meta-Plan)• Documentation and minutes


Page 85






Page 86


Module 3 structure

Market analysis








METHODOLOGY

SUPPORT



e-business design


Page 87


Market segmentation

Objectives detailed specification and verification of the existing market

segment definitions realisation of a common working basis for the application of

the e-volution concept inside a company or EE

Results Definition of:

product/market combinations customer groups and / or product groups

The market segments are the basis for market segment assessment


Page 88


1. Customer description

2. Identification and definition of homogeneity criteria

3. Development of homogeneous customer groups and grouping of similar homogeneity

profiles

4. Combination of similar groups into economic market segment

Market segmentation approach


Page 89


Leading questions concerning market segmentation1. Initial situation: What is the initial situation?

• Customer groups, product groups, distribution channels, • distribution regions worksheet: initial situation

2. Product/client criteria: What is the difference concerning the customer groups?

• Customer groups criteria, product groups criteria, characteristics

• worksheets: Customer groups criteria, product groups criteria, characteristics

3. Segmentation: Which homogenous customer groups does the company have?

• Testing of product and customer group combination by criteria and determination of homogenous combinations

4. Segmentation: Is it possible to process product-market combinations economically?

• Testing and delimitation of product and group combinations to turn over power and strategic importance.


Page 90


Detailed description of components

Description of initial situation • main products / product groups and customer groups and their importance/priority for turnover are defined

• Afterwards sales channels are distinguished between direct and indirect sales (resellers, sales partners) and the relevant sales markets/regions are identified

• Then, the connections between products / product groups and the market are defined

• products / product groups are ranked and prioritised by its turnover importance (e.g. A, B and C)

Differentiation of customer groups and identification of homogeneous customer groups

• Several criteria are used to differentiate customers and therefore identify groups of customers with the same characteristics

• E.g. Purchased volume and trends, sales channel, e-solution description

• By using such criteria, customers with similar characteristics are identified and therefore merged to form homogeneous customer groups

• Assignment to product/ market groups


Page 91


Market segmentation1. Customer description - description of initial situation

Sequence1. Products2. Customers3. Trade channel4. Geographic regions

Products

Criteria

Kühlwächter

Druckschreiber

Hackenzähleinrichtung

BdAT

...

Küh

lage

r

Pfla

nzen

prod

uktio

n

Hei

zung

/San

itär

Roh

rleitu

ngsb

au

Bau

gew

erbe

Anl

agen

über

wac

hung

,

-ste

ueru

ng

Was

ser-

, Bod

en

verb

ände

...

x xx

x x

x x

xx

Hän

dler

Ing.

-Bür

os

Dire

kt

Koo

pera

tione

n

Sys

tem

inte

grat

ion

Nor

ddeu

tsch

land

Deu

tsch

land

ges

amt

EU

x

x

x

x

x

x

x

x

x x x

x x x

x x x

x

Tur

nove

r pr

iorit

yA

B

C

A

x

Customers Trade channel Region


Page 92


Market segmentation 2. Identification of homogeneity criteria

Distinctive features of the customer groups

Turnover relevance

Strategic relevance

Image

Decision maker

Consulting needs

After Sales Service

Customer specifics

Quality needs (TQM)

Ordering

Delivery time / Flexibility

Logistic features

Key question:Different customer demands on marketing and sales activities regarding …

Region

Ecologic issues

Demographic characteristics

cultural characteristics

advertisement

Competition

Costs

Faith

Acquisition

…

...

Product performance

Product use

Innovation

Design

Costs

...

...?

Key question:Different customer demands on products regarding ...

xx

x

x

Criteria selection, resp. completion

x

x

x

Relevant criteria and its characteristics for classification of customers into homogeneous customer groups


Page 93


Market segmentation 2. Identification of homogeneity criteria

Criteria Characteristics

Product performance

Decision maker

After Sales Service

Ordering

Customer specifics

Acquisition

Competition

+ high o medium - low

+ Technician o Buyer - Buying Centre

+ yes - no

+ long-time o medium-time - short-time

+ high o medium - low

+ low o medium - high

Criteria description and characteristics

+ periodically o irregular - one time

Criteria selection according to its relevance according to segmentation objectives:

- Market development (advertisement, distribution, costs, products)

- Enterprise strategy (development of enterprise functions)


Page 94


Market segmentation 3. Development of homogeneous customer groups and grouping of similar homogeneity profiles - Differentiation by customer groups

Homogeneous customer groups

Küh

lage

r

Med

izin

. Ein

richt

.

Küh

llogi

stik

Pfla

nzen

prod

uktio

n

Hei

zung

/San

itär

Roh

rleitu

ngsb

au

Bau

gew

erbe

Anl

agen

über

wac

hung

,

-ste

ueru

ng

Was

ser-

, Bod

en

verb

ände

...

-

+

-

-

- +

o + o - + +--

+-

- o

o- -

+ + + + - -

o o o o - -

-

- - - -

- - -

Reason for divisionReason for combination

+ +

+ +

Product performance

Decision maker

Ordering

Customer specifics

Acquisition


Page 95


Guidelines for segment definition

Definition of market segments

• Check-up and validation of identified product/market combinations is done with reference to the criteria adopted and the requirements of the market segments:

• identification and analysis of strategic issues for product-market-combinations

• check-up if product/market combinations are homogeneous internally and among each other

• analysis of timely stability of market segments

• analysis of turnover potentials of product/market combinations for economic market development

• If these criteria are not fulfilled, customer groups with similar or only slightly different characteristics of segmentation criteria are integrated into the market segments until check-up criteria are fulfilled


Page 96


Market segmentation4. Combination of similar groups into economic market segments

Analysis of strategic business units (SBU) in case of need for more in depth information for product-market combinations

Products

Criteria

Kühlwächter I

Kühlwächter II

Kühlwächter III

Druckschreiber

Hackenzähleinrichtung

BdAT

...

Med

izin

Küh

lage

r

Küh

llogi

stik

Pfla

nzen

prod

uktio

n

Hei

zung

/San

itär

Roh

rleitu

ngsb

au

Bau

gew

erbe

Anl

agen

über

wac

hung

,

-ste

ueru

ng

Was

ser-

, Bod

en

verb

ände

...

x x x x

x x

x

x x

x x x

xx

Hän

dler

Ing.

-Bür

os

Dire

kt

Koo

pera

tione

n

Sys

tem

inte

grat

ion

Nor

ddeu

tsch

land

Deu

tsch

land

ges

amt

EU

x

x

x

x

x

x

x

x

x

x

x

x

x

x x x

x x x

x x x

x x x

x x x

x

Tur

nove

r pr

iorit

y

A

B

C

A

A

A

Market segments with different background colours.

Definition of homogeneous customer groups in respect to marketing and enterprise specifics.

Definition of single markets for transparent performance and activity monitoring and controlling.

Customers Trade channel Region


Page 97


Are there any questions concerning the identified customer groups?

Are the customer groups homogenous themselves and inhomogeneous to each other?

Are the differences time-stable? Are the sales potentials into the customer groups sufficient

for an economical market processing?

Testing identified customer groups concerning market segments demands

If need be unit customer groups with similar or insignificant different characteristics in the homogeneity criteria to market segments, which fulfil the test criteria.

Market segmentation4. Check


Page 98


Customer purchase criteria analysis

Objectives A consumer's purchasing criteria are the criteria

(conscious or unconscious) on which the consumer bases his decision to purchase a product or service and supplier:

Satisfying the consumer's purchasing criteria are therefore crucial to the company's/EE’s revenues.

Understand how the EE and its competitors satisfy the consumers' purchasing criteria

Results The most important purchase criteria of the EE’s

customers The features of purchase criteria


Page 99


Customer purchase criteria analysis

Gather information about customers' purchasing criteria, and about why the company/EE satisfies these

purchasing criteria

Document the results from the research

Assess how the three main competitors satisfy customers purchasing criteria

Assess the company's/EE’s opportunities and threats according to the investigation of

consumers' purchasing criteria


Page 100


Competitor analysis

Objectives describe the most important competitors and gain an

understanding of their strengths and weaknesses, compared to your company (Often, this can be realised by using information that already exists in the company/EE)

Supplement is obtained by gathering information externally e.g. by using the Internet, networks etc.

gain a good understanding of the aspects of the competitors that constitute an opportunity or a threat for the company/EE (both in relation to "e" and relating to the business in general)

Results Description of most important competitors Information for OT-analysis


Page 101


Competitor analysis

Description and assessment of the most important competitors

Conclusion drawing based on the description and the assessment of the

competitors - opportunities and threats


Page 102


Competitor analysis

Competitor's position in the market and competitive advantages

Assessment of competitor's value creating activities – S.W.

–P/M areas served by the competitor – Competitor's market position and market share

Description of competitors’ current e-solution

Intermediate OT Analysis

– Information (one way) – Communication (two way)– Trade/e-Commerce– Business Integration

– Based on the description and the assessment of main competitors – describe intermediate OT elements

Procurement ProductionMarketing/ sales

DistributionService and support

+ + 0 +

Excellent at branding

None in particular

Are known as quick and friendly

Uncertain

The production is somewhat unstable.

Some distributors say

that the salesmen are to

pushing. None in particular

Assessment of cost efficiency

Strengths

Weaknesses

Effective on purchase, large quantities and hence low prices.

Very new the equipment

used.

Primary activities


Page 103


Competitor analysis

Description of competitors’ current e-solution for each value creating activities

Procurement ProductionMarketing/ sales

DistributionService and support

Information (one way)

Present the products on the Web site

Communication(two ways)

Distributors can order the products through the internet.

Trade/eCommerceBusiness integration

Types o

f eB

usin

ess

-Inte

rnet-

solu

tions

Primary activities

The value-creating activities


Page 104


Market attractiveness assessmentObjectives definition of both the competitive position and attractiveness

of each of the company’s or EE’s product/market combinations for identification of strategic options for actions as well as opportunities and threats of market segments

Results visualisation of the previous, on basis of which a list of

priorities for development activities can be created, and which can be also used as a tool for disseminating common understanding of the qualities of different product/market combinations within the company or EE

A by-product is the identification of information gaps about single market segments

starting point for market research activities


Page 105


1. Specify drivers of each dimension/ Identify the critical internal and external drivers

2. Weight drivers (assign relative importance weights to drivers)

3. Score SBU‘s each driver

4. Position SBU in Attractiveness-Strength Matrix and interpretation

5. Specify opportunities and threats, strengths and weaknesses (SWOT-analysis)

Market attractiveness assessment


Page 106


Step 1a: Specify drivers of each dimension/ Identify the critical internal and external drivers

Market size and growth, e.g.:

• market volume, consumer concentration, number of (potential) customers, structure of (potential) customers

• Purchasing patterns, investment rate

Market quality, e.g.:

• Industry sector factors (efficiency of branch, profit margin, price level, clearance for price politic, investment intensity, requirement for service and distribution, position in the market life-cycle, threat of substitutes,customer behaviour)

• Economic factors (economies of scale, capital demand, high investments, currency costs and risks, starting loss, long-term capital commitment, brand loyalty, quality of existing channels, access to existing channels, environmental impact, promotion alternative, transport, dependence on the public attitude, infrastructure market entry barriers, communication network, power supply, existence of alternative resources, interference in the supply of power and resources)

Market attractiveness


Page 107


Step 1a: Specify drivers of each dimension/ Identify the critical internal and external drivers

Market quality, e.g.:

• Technological factors (technological level and innovation potential, possibility to protect knowledge, differences in fabric size, differences in performances, different ports, difference in standard, special needed know-how, know-how competitive edge of the benchmark, general technological standard, production technology)

• Political factors (political and legal market entry barriers, political instability, legal system, legal security, labour law, dependence of legislation, dependence of the public meaning, risk of state intervention, tax-, trade- and competitor legal systems, particular environmental determinations, import quota, import taxes and custom duty)

• Sociological factors (religious special features, language, cultural characteristics, social organizations)

• Competition factors (competitor structure, competitor intensity)

Market attractiveness


Page 108


Step 1b: Specify drivers of each dimension/ Identify the critical internal and external drivers

Relative market position, e.g.:

• Marketing potential (price advantage, quality advantage, service, delivery time, technique, range of products, functionality, reliability, design, customer service, environmental compatibility)

• Financial output (company growth, revenue, turnover development, profit margin, operating margin, capital turnover)

• Position of the company (financial risk ,USP, cost-performance ratio, customer loyalty, degree of establishment of the company, size of financial power of the company, image advantage/ disadvantage, innovation standard, customer relationship)

• Market share and market share development (market share, market share growth)

Competitive strength


Page 109


Step 1b: Specify drivers of each dimension/ Identify the critical internal and external drivers

Relative enterprise potentials, e.g.:

• Marketing potential (distribution network, customer information, customer loyalty, consultant know-how, distribution efficiency)

• R&D potential ( innovation potential, fundamental research, innovation continuity, technical know-how, R&D capacities, patents)

• Production ( action flexibility of machinery, production conditions, productivity, level of automation, capacities)

• Information (Controlling, reporting, customer data base)

• Logistics & Organisation (cost advantages, terms of a license, supplier relations, customer service, advantage of location)

• Employee skills (professionalism, power of judgement, cadre, quality of the management system, know-how, personal capacities, motivation, culture)

• Finance (financial capacities, participations, investments, return on investment, own capital, cash flow, savings)

Competitive strength


Page 110


Step 2 and 3: weight and score drivers by means of value-benefit analysis (option)

INDICATORS OF MARKET ATTRACTIVENESS

EVALUATION OF MARKET ATTRACTIVENESS(B)

Low Middle High

WEIGHT (G)

B*G

0 1 2 3 4 5 6 7 8 9 10 SBU1 SBU2 SBU3

Market size 30% (0,30) (1,30) (2,75)

- ... # ? Δ 5% 0,15 0,20 0,45

- ... # ? Δ 15% 0,15 0,60 1,50

- ... # ? Δ 10% 0,00 0,50 0,80

Market growth 50% (1,10) (3,10) (3,60)

- ... # ? Δ 10% 0,10 0,60 0,80

- ... # Δ ? 20% 0,40 1,40 1,20

- ... # Δ ? 5% 0,15 0,35 0,30

- ... # ? Δ 5% 0,15 0,25 0,40

- ... # ? Δ 10% 0,30 0,50 0,90

Market quality 20% (0,30) (0,90) (1,95)

- ... # ? Δ 2% 0,04 0,10 0,20

- ... # ? Δ 5% 0,10 0,25 0,45

- ... # ? Δ 10% 0,10 0,40 1,00

- ... # ? Δ 3% 0,00 0,15 0,30

Total 100% 1,70 5,30 8,30

# - SBU 1 ? – SBU 2 Δ – SBU 3


Page 111


Step 2 and 3: weight and score drivers by means of value-benefit analysis (option) EVALUATION OF

COMPETITIVE STRENGTH ?

RELATIVE COMPETITION POSITION

Weak middle powerful Weak Middle Powerful

RELATIVE COMPETITIVE STRENGTH

COMPETITION FACTOR (SBU 1)

0 1 2 3 4 5 -5 -4 -3 -2 -1 0 1 2 3 4 5

WEIGTH (G)

Marketing potential Δ О • 5% -0,15

R&D potential Δ О • 5% -0.10

Production Δ О • 10% -0.20

Information Δ О • 5% -0,05

Logistics and organization О Δ • 10% 0,10

Employee skills О Δ • 10% 0,30

Finance О Δ • 20% 0,40

Market share О Δ • 25% 1,00

Position of company О Δ • 10% 0,30

Total 100% 1,50

О – best competitor Δ – SBU 1


Page 112


Step 4: Position Strategic Business Units (SBU) in Attractiveness-Strength matrix Option A

Threat

Threat

Ideal

Unattractive

Neutral

Unattractive

Ideal

Neutral

Relative SBU potential

Market quality

Market size and growth

Relative market position

SBU1

SBU2

SB

U3


Page 113


Step 4: Guidelines for Strategic Business Units (SBU) in Attractiveness-Strength matrixOption A SBU Market Call for action/ Option

Threat Threat Control if development of SBU potentials are justifiable through market attractiveness.

Unattractive Further actions in this segment are not profitable.

Neutral Verifying of SBU potentials. Operating expenses checking. Detail analysis.

Ideal Develop the SBU potentials. Checking of operating expense. Prioritisation.

Unalluring Threat Prepare for strategic decisions. (Analysis, costs – earnings, opportunities and threats)

Unattractive Further actions in this segment are not profitable.

Neutral Analysis of further development of market – Opportunity or flop.

Ideal Take actions for potential build-up and market penetration.


Page 114


Step 4: Guidelines for Strategic Business Units (SBU) in Attractiveness-Strength matrixOption A SBU Market Call for action/ Option

Develop Threat Analysis of market development. Evaluation of cost and earnings of market attractiveness.

Unattractive Analysis of market development (prognosis). If market development is constant than pull-out.

Neutral Analysis. Verification of cost/ earnings to market penetration.

Ideal Take action for market penetration and market development.

Ideal Threat Take action to secure the market position.

Unattractive No further investments. Pull-out.

Neutral Take action for sales increase.

Ideal No call for action.


Page 115


Step 4: Position Strategic Business Units (SBU) in Attractiveness-Strength matrix Option B

Investment- and growth strategy

Selective strategy

Absorption- orDivestment strategy

Relative competition strengths

Zone oftying resources

Zone ofresource disposal

low middle high

low

middle

high

Mark

et

att

racti

ven

ess

Creation of value

Consumption of resources

Method: McKinsey Portfolio Analysis

Market size is represented by the size of the circle. Market share is shown by using the circle as a pie chart.


Page 116


Step 5: Specify opportunities and threats, strengths and weaknesses (SWOT-analysis)

Threat

Threat

Ideal

Unattractive

Neutral

Unattractive

Ideal

Neutral

Relative SBU potential

Market size and growth

Relative market position

Relative competition strengths

Zone oftying resources

Zone ofresource disposal

low middle high

low

middle

high

Mark

et

att

racti

ven

ess

Creation of value

Consumption of resources

Method: McKinsey Portfolio Analysis

StrengthsStrengths

List of strengths(1 .. n)



List of weaknesses(1 .. n)



List of opportunities(1 .. n)

List of opportunities(1 .. n)

ThreatsThreats

List of threats(1 .. n)


S/O strategiesS/O strategies

Consolidation of strengths to realise

opportunities

Consolidation of strengths to realise

opportunities

W/O strategiesW/O strategies

Overcoming of weaknesses by

realisation of opportunities

Overcoming of weaknesses by

realisation of opportunities

S/T strategiesS/T strategies

Consolidation of strengths to avoid

threats

Consolidation of strengths to avoid

threats

W/T strategiesW/T strategies

Overcoming of weaknesses and

avoidance of threats

Overcoming of weaknesses and


Harvesting•Absolute weakness •Get ride of it

Selective growth • Potential for market leadership • identify weaknesses• Build up strengths

Selective growth• high investments• strengths

Selective Procedure•Specialization•selective investments

Investment and growth• Absolute strength• Aim for market leadership • invest

Selective Procedure•Search for niche •Specialization• more of a weakness

Selective Procedure•Keep it the way it is

Harvesting•Search for niche •Specialisation• more of a weakness

Harvesting•Minimize investments• weakness

low middle high

low

mid

dle

hig

h

Mark

et

att

ract

iveness

of

SB

U

relative competition strength of SBU


Page 117


Target market search Identification and evaluation of new products and services for the

single organisation or EE Identification of additional demands of present customers for

enlargement of product program Identification of new market opportunities by new products Evaluation of product ideas by means of market and company

relevant criteria Selection of promising product/market combinations for a

detailed analysis as preparatory work for new product developments.

Objectives

Results Definition of promising product/market combinations, customer groups and / or product groups for which a more detailed market analysis can be realised under the following questions:

Get objective statements concerning market chances and risks Determine detailed customer requirements and preferences Determine detailed product requirements


Page 118


Benefits of target market search- Zielmarktsuche

• Take over the roll of an “innovator" or of the “early follower" within a branch.

• Expansion in new markets with new or modified products.

• Improvement of the utilisation of the existing production capacities through new products.

• Rejuvenation of the product range by settlement of many products in the last phases (saturation and regeneration) des product life cycle.

• Search for market niches to avoid direct confrontation with important competitors on existing markets.

• Systematic and traceable development of product ideas.


Page 119


Organisation of target market search

Organisation form • Enterprise intern workshops • max. 10 participants• Sales management, sales staff (intern + extern,

application engineering, R&D, production

Time demand*(benchmark)

* For the workshop (without preparation time)

• Idea generation: 1 day• Idea assessment filter 1: 0,5 days (in addition maybe

research) • Idea assessment filter 2: 0,5 days


Page 120


Organisation of target market search

Requirement for participants

The participants must have knowledge about the following:

• Information about product and customer groups of the enterprise

• Knowledge about the buying behaviour of the purchaser(buying decision criteria, decision maker,...)

• Revenue distribution of the product and customer groups(rough calculation)


Page 121


Target market search

Generation of ideas

Identification of core competencies

Evaluation of ideas

Evaluation of ideas regarding market place opportunities and risks


Page 122


Ideenspeicher(Ideenbeschreibung)

Idea data source(Idea description)

Product ideas Product ideas

2nd pass 3rd pass or

Starting point

1

2

3

1st pass

Products and services

Customer groups

Core competences

Trends in industrial

sector

Identification of search

fields

Idea generation

Search field specification

(characte-ristics)

Products and services of the enterprise

Benefits, effects and functions of products and services for the

enterprise

Identification of potential target groups, expected benefits and

application fields

Customer groups of the enterprise

Successful products and services

Problems in the product environment

Product environment at the customer

Possible customer solution based on

products and services

Customer needs

Core competences of the enterprise

Strengths of the enterprise

Special abilities and competences of the

enterprise

Competences needed in the future

Definition of possible service offers,

application fields, and user benefits

Definition of enterprise strengths

Identification of global and branch trends in

general

Identification of relevant trends for the

enterprise

Definition of product and service strategies

based on trends

Identification of needs for additional competences

Generation of ideas


Page 123


Modified products for new customers

Fix searching fields- starting point -

Explain searching fields

Generate ideas

Memory ideas(description)

Who requires which benefits combination? Where could you use them?

Which products and services offers the enterprise?

Which benefits, effects and functions offer the products and services of the enterprise?Which characteristics has the benefit?


Page 124


Starting point /fix searching

fields

explain searching fields

Generate ideas


New products for existing customers

Which problems result form the associated product field? Which near system field surrounds the product at the customer?

Which solutions can you efficiently combine in connection with the product? Which product demands of the customer are also possible in this connection?

Which customer groups does the enterprise have? Which products where successful?


Page 125


Starting point /fix searching

fields

explain searching fields

Generate ideas


Which key abilities does the enterprise have? Which enterprise powers can you realize? With what was the enterprise successful in the past?

Which specific abilities does the enterprise master? Which further abilities seam to be interesting for the future?

Which product and enterprise efforts can you generate out of this? In which usage fields are advantages (with this abilities) for the customers possible?

New products for new customers - enterprise abilities


Page 126


New products for new customers - trends

Which products could be successful because of the trends and could be produced by the enterprise?Which abilities do you need in addition?

fixsearching fields - starting point -

Explainsearching fields

Generate ideas


Which key abilities does the enterprise have? Which enterprise powers can you realize?Which global and branch near trends are there?

Which trends are relevant for the enterprise?


Page 127


Leading questions:

features

requirements

demands

abilities

New customer/new products

X

X

X

X

X

X

X

X

Who could require this combination? Where are they used?Which characteristics can be combine efficiently?

Synergies between criteriacharacteristics prove newproducts and/or new customers

Synergies between criteriacharacteristics prove newproducts and/or new customers

Idea summary


Page 128


Approach of Idea assessment and selection

Pre filter

Filter level 1

Filter level 2

Audit of ideas:• Reality closeness• manifestness• Goal conformity

Assessment of the enterprise

potentials

Assessment of Market potential

Qualitative assessment of abilities and input for the

realisation of the product ideas in major departments of

the enterprise.

Qualitative assessment of opportunities and risks

of the goal market

Positive assessment of ideasis precondition for

a success promising product (K.O. - criteria)

Weighted criteria to makea differentiated assessment

of the enterprise Potentials possible

( utility value analyse)

Positioning of correlating Ideas as selection

support

max. 2-3

about 7-10

> 20

After assessment remaining ideasAssessment content Assessment technique


Page 129


enterprise abilitiesmanufacturing-Know-howmanufacturing effortsdevelopment-Know-howdevelopment effortsResources (staff, finances)

Market situationsales potentialcompetition situation

F I L T E R 1

F I L T E R 2

Detail analyse

Workshop 2: evaluation of ideas (enterprise abilities)


Page 130


Example: filter level 1

Product idea jProduct

developmentManufacturing Effi-

ciency

Ability Input Ability InputW1;j=5 W2;j= 3 W3;j= 5 W4;j= 1 W5;j= 7

Product 3 3 3 1 1 47x

P1 3 3 3 3 1 49 x

P2 1 1 3 1 1 31 x

P3 3 1 3 1 3 55 x

P4 0 0 3 0 1 22

Assessment of enterprise potentials

utilityvalue Nj

Goal: Ordering ofproduct ideas considering the utility value

Weight Wi;j

Assessment B1;j,3;j

Nj = (Bi;j x Wi;j)

0... Not existing 1... Partly existing / upgradeable3... existing

Assessment B2;j,4;j

0... high 1... justifiable3... low

Assessment B5;j

0... low1... middle3... high


Page 131


enterprise abilitiesmanufacturing-Know-howmanufacturing effortsdevelopment-Know-howdevelopment effortsResources (staff, finances)

Market situationsales potentialcompetition situation

F I L T E R 1

F I L T E R 2

Detail analyse

Workshop 2: evaluation of ideas (market chances)


Page 132


Estimation of success probability of product ideas

Demand of the market

x

x

low high

Legend:Success probability

Co

mp

etit

or

inte

nsi

ty

low high

hig

hlo

w

A) Positioning of product ideas in the strength diagram

A) Positioning of product ideas in the strength diagram

B) Translation of the positionof the product idea in the strengthdiagram in success probabilitiesfor the product ideas

B) Translation of the positionof the product idea in the strengthdiagram in success probabilitiesfor the product ideas


Page 133


Tu

rno

ver

cate

go

ry

A

B

C

D

E

Previously listed products Turnovercategory

Realizing time frameShort description of idea

A) Which idea is regarding the possible turnover comparable with the existingproduct?Or: Relative assessment of ideas among themselves.

A) Which idea is regarding the possible turnover comparable with the existingproduct?Or: Relative assessment of ideas among themselves.

B) How long will it take under positive circumstances until the the product is salable?

B) How long will it take under positive circumstances until the the product is salable?

Turnover und realizing time


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Result presentation – discussion and assortment basis

Realization time

Tu

rno

ver

exp

ecta

tio

ns

AB

CD

E

3

2

5

1

4

Idea filtering through consideration of

- Realisation time [e.g. year quarter]

- Turnover expectation [category A, B, C, D,

E]

- Success probability (competition situation, demand)

Legend:

1...x – Product idea

Success probability


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Sensitivity Analysis

Objectives provide information about alternative scenarios

related to different values of the input variables when there is a non negligible level of uncertainty in the assessment of the needed input market data

See variation in the output scenario

Results Weights Assessed strategies or options


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Sensitivity Analysis

Choose field of assessment

Choose question for assessment

Assign a weight

Measure score / Evaluate overall score


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Opportunity-Threat analysis

Objectives Opportunities and threats describe relevant external

factors, the environment, of an organisation SWOT analysis provides information that are helpful in

matching the organisation's resources and capabilities to the competitive environment in which it operates

instrument in strategy formulation and selection. SWOT analysis can be used in conjunction with other tools

for audit and analysis, such as PEST analysis and Porter's Five-Forces analysis

Results definition of organisation’s opportunities and threats as an

important part of the strategic e-business planning process Input data for SWOT analysis


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Module purpose • Synthesising of results from market and resource based strategic business analysis into e-business strategy and roadmap for the Extended Enterprise

• Output is an e-business roadmap for EE which is based on an e-business strategy

• The e-business roadmap

• is a time-based plan that defines what the status of an entity’s e-business is, where it wants to go, and how it can get there

• denotes space structured by development directions, milestones and projects to get from current status to a new one in the future

• are both forecasts of what is possible or likely to happen, as well as plans that articulate a course of anticipatory action


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Field of application • Extended Enterprise model specification (EE entities, value chain structure, hierarchy of strategic business objectives)

• E-Business strategy definition (goals, targets, measures, resources)

• E-business TOWS Analysis• E-business strategy alternative definition• E-business implementation roadmap definition• E-business roadmap graph• E-business strategy implementation controlling with

Balance Score Card (BSC)


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Market analysis








METHODOLOGY

SUPPORT



e-business design

Module 4 structure


Page 142



Market analysis







METHODOLOGY

SUPPORT



e-business design

Module 2: e-business strategyformulation• Basis for identification of

interfaces for the roadmap definition in Module 4



Module 1: Business ObjectivesAnalysis• Create common understanding of

EE business objectives• Basis for targeted e-business

strategy formulation

e-business roadmap


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Page 144



Organisation • Intra- or inter-enterprise workshops or tool-based online session

• Definition of key personnel participants from management and specialised departments

• Need for different EE-partners at one point of time

Demands on participants • Knowledge about enterprise, micro and macro environment, business strategy, e-business situation for the whole enterprise and strategic business objectives, etc.

Time need • Workshop approach: 3-4 workshops

• Online sessions: time to be defined

• Basis through Module 1-3

• Preparation of participants required


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Web-based online sessions• Platform configuration and preparation• In-advance information (purpose, objectives, benefits,

participants, organisation)• In-advance need for analysis of data from module 1-3• Invitation (access information, time schedule)• Reporting


Workshop• In-advance information and invitation of participants• Moderation methods and instruments (e.g. Flipchart,

Overhead, Beamer, Meta-Plan)• Documentation and minutes


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Page 147


Market analysis








METHODOLOGY

SUPPORT



e-business design

Module 4 structure


Page 148



• Enduring statement that distinguishes the EE enterprise from others

• EE's sense of future direction

EE business visiondefinition

• EE definition in a concise and clear mannerEE business mission definition

• Basis for EE strategy development

• Definition of main business objectives

• Clustering of business objectives

• Priority of business objectives (e.g. with BSC)

EE business objectives definition


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• Overview about existing bought or self-made e-applications, there importance to the enterprise and the importance given to e-applications and e-abilities at all

• assessment average user qualification regarding e-business application type

E-ability analysis

• Overview of core competencies of each EE partner, the trends, the competitive relevance and the degree of mastery

• Evaluation and visualization of companies situation

Core competency analysis

• Overview of benefits for all independent and interdependent enterprises

E-benefit analysis


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• enduring statement that distinguishes one enterprise from other similar enterprises

• enterprise's sense of future direction

Market position analysis

• Enterprise definition in a concise and clear mannerCompetitive Strategy

• Basis for strategy development

• Definition of all objectives

• Clustering of objectives

• Prioritising of goals (e.g. with BSC)

Competitor Analysis


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Module 4: e-business strategy and roadmap formulationPurpose Methodological approach and supporting software tool for synthesis

of results from market and resource based strategic business analyses for EE e-business strategy and roadmap development

Fields of application EE business objective definition EE business model specification (EE entities, value chain structure,

hierarchy of strategic business objectives) e-business TOWS-analyses e-business strategy formulation (goals, targets, measures,

resources) traceable e-business strategy assessment and selection e-business implementation roadmap definition e-business strategy implementation controlling with Balance Score

Card (BSC)


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EE business model specification

Objectives Aggregation of data collected before Define overall EE business objectives Define hierarchy of business objectives Draw special attention to problems and opportunities

Results EE business purpose definition EE idea formulation Draft EE business structure model

EE businessvision

specification

EE businessvision isspecified

EE businessmission

specification

EE businessmission isspecified

EE constellationspecification

EE constellationis specified

Start EE modelformulation


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Hierarchy of business objectives

Hierarchy of objectives defines basis for each entrepreneurial acting

• Higher level objectives

• EE business vision (if any)

• EE business mission (if any, mainly only for horizontal EE)

• Lower level business objectives

• Profit objectives e.g. business unit objectives

• Market objectives e.g. product unit objectives

• Subject objectives e.g. functional objectives

Enterprise mission

Enterprise philosophy

Enterprise corporate identity

Profit goalsBusiness unit objectives

Market objectivesProduct unit objectives

Subject objectivesFunctional objectives

Me

an

s-e

nd

-re

lati

on

s

Det

ail

ing

Higher-level

objectives


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EE business vision/mission definition

Fundamentals • enduring statement that distinguishes one enterprise from other similar enterprises

• important to• insure unanimity of purpose,• arouse positive feelings about the enterprises,• provide direction,• provide a basis for objectives and strategies,• serve as a focal point,• create consensus on specific strategies and

objectives,• resolve divergent views among managers


Page 155


EE business vision definition

Writing the business vision for the EE

Visualisation, discussion and assessmentof individual views on common business visions

Decision about vision statement of the EE

Formulation and publication of business vision


Page 156



Purpose "What does the EE want to become?"• first step in strategic business planning• clear vision provides the foundation for development

of a comprehensive mission statement• direction of all business actions toward this vision

Content • EE’s sense of future direction• dream for an ideal state• concise declaration of the direction that an EE is

planning to take into the future


Page 157



Design guidelines • short• preferably• meaningful• one sentence• Instigation and inspiration for action and achievement

among employees• Integration of motivation• Integration of changing aspects or motivation

Important for horizontal EE constellations


Page 158


EE business mission definition

Writing the business vision for the EE

Visualisation, discussion and assessmentof individual business mission

Decision about mission statement of the EE

Formulation and publication of business mission


Page 159



Purpose • EE definition in a concise and clear manner• Provision of vivid picture of what is unique about the

EE to the reader• Alignment of every program and activity in the EE to

the mission

Design guidelines • less than 200 words• longer than a phrase or sentence, but not a two page

document• not be too specific (can alienate managers and stifle

creativity)• Inspiring• enduring though not cast in stone


Page 160



Content • Customers and target markets• Products/Services for customers• Geographic markets• Technology• Concern for Survival/Growth/Profits• Philosophy (values, ethics, beliefs)• Public Image• Employees• Distinctive competence and Unique Selling Position

(USP)


Page 161


EE business objective definition (see Module 1)Information of participants

Definition and collection of business problems and objectives by means of creativity methods


Presentation and completion of clustered business objectives

Systems Thinking of business objectives

Priority definition and presentation of business objectives


Page 162


EE constellation specification

• Specification of the organization's value and supply chain, i.e. the Extended Enterprise constellation in case of shared and integrated business process along the value chain

• This specification focuses on three main aspects:

• Business processes

• Value and supply chain partners

• Basic e-business strategies for e-business processes

• EE value chain specification

• organizations that are involved in the inter-enterprise value and supply chain processes

EE businessvision

specification

EE businessvision isspecified

EE businessmission

specification

EE businessmission isspecified

EE constellationspecification

EE constellationis specified

Start EE modelformulation


Page 163


EE e-business strategy formulationObjectives Development and decision about the e-

business strategies based on the results of:

Module 2: Organizational analysis (strengths (S) and weaknesses (W))

Module 3: Market analysis (opportunities (O) and Threats (T))Aggregation of data collected before

Results Preference e-business strategy

alternatives

Start e-businessstrategy

formulation

Market analysis

e-businessstrategy

alternativespecification

e-businessstrategy

alternativespecified

TOWS-Analysis

TOWS analysed

basic e-businessstrategydefinition

basic e-businessstrategy defined

Organisationanalysis


Opportunity-Threat

defined


Page 164


SWOT/TOWS Analysis • Development of SWOT matrix based on results of

• Module 2: strengths (S) and weaknesses (W)

• Module 3: opportunities (O) and Threats (T)

• Combination of S-W-O-T elements: matching the resources and capabilities to the competitive environment

• S/O combination: organisation should strive to maximise its e-business strengths to capitalise on new e-business opportunities

• S/T combination: organisation should strive to use its e-business strengths to parry or minimise threats

• W/O combination: conquer the organisation's e-business weaknesses by making the most out of any new e-business opportunities

• W/T combination: defensive strategy, to minimise an organisation's internal e-business weaknesses and avoid external threats

• Development of basic e-business strategy types and e-business alternatives for further elaboration and assessment

Strengths


Weaknesses


Opportunities

List of opportunities

(1 .. n)

Threats


SO strategies

SO 1..n:Consolidation of strengths

to realise opportunities

WO strategies

WO 1..n:Overcoming of

weaknesses by realisation of opportunities

ST strategies

ST 1..n:Consolidation of strengths

to avoid threats

WT strategies

WT 1..n: Overcoming of weaknesses and


Strengths


Strengths


Weaknesses


Weaknesses


Opportunities


(1 .. n)

Opportunities


(1 .. n)

Threats


Threats


SO strategies

SO 1..n:Consolidation of strengths

to realise opportunities

WO strategies

WO 1..n:Overcoming of

weaknesses by realisation of opportunities

ST strategies

ST 1..n:Consolidation of strengths

to avoid threats

WT strategies

WT 1..n: Overcoming of weaknesses and



ThreatsThreats

StrengthsStrengths


Minimise or avoid threats

Reduce weaknessesor change into strengths

Use

of c

hanc

es b

y st

reng

ths


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e-businesse-business

e-business at a glance

Business partners/suppliers Extranet InternetOwn

enterpriseCustomers

e-commercee-procurement

e-organisationbusiness-to-business (b2b) business-to-business (b2b)business-to-consumer (b2c)

Supply Chain Management Customer Relationship Management

internal business

Intranet

e-governmentbusiness-to-administration (b2a)

e-governmentbusiness-to-administration (b2a)

business-to-employee (b2e)

consumer-to-consumer (c2c)


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Some basic e-business strategy types

• Supply Chain Management defines the management of a network of organisations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hand of the customers

• If these processes are supported by e-business applications, it is called e-SCM

• Commerce are all transactions (sales and purchases) having the objective of supplying commodities (goods and services)

• E-commerce is a synonym for all kinds of business that are established electronically especially over the Internet

• This includes both electronic sale (internet shops) and B2B transactions, i.e. business between two companies

• Procurement contains functionalities to illustrate internal sourcing processes for indirect and increasingly also for direct goods, as well as for integration of cross-plant sourcing and dynamic trade processes, such as auctions or proposals

• If these processes are supported by e-business applications, it is called e-Procurement

What?


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Strategy alternatives to realise basic e-business strategy types

How?

1st level content of e-business strategy detailing:

• Specification of e-business strategy on the ICT application level and justification

• Definition and differentiation between clients, customers, and users

• Definition of milestones (time) related to ICT application implementation

• Description of constraints for e-business strategy alternative implementation

• Description of other relevant facts and assumptions related to the validity of the specific e-business strategy alternative

2nd level content of e-business strategy detailing

• actions

• responsibilities

• resources

• time


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Definition of actions, initiatives and projects and compilation • Compilation of single e-business actions with other e-business

actions already running or planned

• evaluation of these projects and initiatives and determination of the concept to be pursued

• Selection of most feasible and beneficial e-business actions

• a brief brainstorming exercise for each action to provide a starting point for action planning.

• Main subjects to specify:

• Priorities

• implementation chances, risks and corrective measures

• resource specification: financial, technology, material and human

• responsibility definition

• investment planning

• mid till long-term implementation plan and timeline specification


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E-business strategy assessment and selection

• Strategic choice is the decision to select from alternatives the strategy which will meet best the enterprise objectives

• The decision involves focussing on a few alternatives, considering the selected factors, evaluating the alternatives against these criteria, and making the actual choice

• Central to the e-business strategy assessment is the evaluation against three major types of assessment criteria:

• real business issues

• Intangibles strategy assessment criteria

• generic strategy assessment criteria


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Examples for business related strategy assessment criteriaCriteria Factors

Corporate businessstrategy

– Coherence with high level objective orientation– Objective fulfilment potential– realisation time

Current and futuremarket

– customer profile and needs– competitors– bargaining power of suppliers– macroeconomic factors

Products and services – quality of products and services– substitute products

People – skills and technology mastery– training possibilities

Innovation and change – Innovation degree (short-, mid-, long-term competitive advantage)– Technology sophistication– Technology mastery

Finance and investment – design costs– implementation costs– operation costs– fixed and variable costs

Risk, reward, uncertainty – Ease of implementation– Chance to fail– Risk averse

Resource view – status assessment: e.g. hardware, soft skills– competences: internal, external– availability: budget, humans


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Examples for intangible strategy assessment criteriaCriteria Factors

Relationships – Scale, scope and liability of distribution network– Bargaining power– Ability to access markets– Ability to work with partners– Excellence in teamwork, networking, and collaboration

Knowledge – knowledge on influencing parameters– R&D ability/ product development and market research– Valuable customer benefits– Management abilities

Cultures and values – Advertisement/ promotion/ PR– Shared aim and purpose– Reward system– Relationship to stakeholders– Lived corporate culture

Reputation and trust

– customer confidence– relationship to suppliers and importance of organization to supplier– delivering on time/ specifications– competitive advantage– customer loyalty– sensitivity in dealing with problems and concerns

Skills and competences

– ability to build and defend niches– training, learning and development opportunities– ability to see problems and opportunities

Processes and systems

– ability to make effective and efficient, and economical use of new design, materials, technologies, and ways of working – continual improvement– fit between production capabilities and market needs– on the job and off the job training– ability to make use of good ideas– control system


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Examples for generic strategy assessment criteria

Criteria Factors

Tangibility – Clearness– Transparency– Coherence– Adequacy

Relevance – Decision support– Orientation– Relevance for different planning processes

Closeness of content

– Flawlessness– Credibility– Completeness– Systematic approach– Development paths (roadmap)– Information contents

Interaction of strategies

– Difference between strategies– Commonality of information, subjects under consideration

Stability – Internal consistency


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Overview of common assessment methods

Focus Methods for documentation and evaluation of success factors

Cost oriented assessment methods

Investment-based assessment methods

Effect and benefit oriented assessment methods

Methods – Checklists– Scoring,

profiling, portfolio models

– Core competence analysis

– Total costs of ownership (TCO)

– Cost-benefit analysis

– Activity based costing (ABC) / Process costs analysis

– Discounted cash flow (DCF)

– Net present value (NPV)

– Return on Invest (ROI)

– Real options pricing model (ROPM)

– Black Scholes Model

– Wibe 21

– Value-benefit analysis

– Balanced scorecard (BSC)

– Scoring, profiling, portfolio models

– Core competence analysis

Value benefit analysis with high practical relevance


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Value benefit analysis method

1. select strategy scenarios to assess

• first of all the strategies must be found and selected following the three major kinds of assessment criteria (see above)

2. define assessment factors

• which criteria are important for the result of the project

• select those (from a given list and self-given)

3. define weight factors

• not all criteria are as important as others are

• so the assessment factors have to be weighted

• best way to do it is by using percentages which add up to 100

4. scoring of e-business strategy scenario

• score each scenario independent from the other

• point score: 10 (best) up to 1 (poor) – points can be given a couple of times

5. calculate ideal value and specific strategy scenario value

• score = weight x criteria evaluation

• addition of scores for each scenario = total value


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Value benefit analysis method6. Define threshold

• Calculate the best possible value

• Calculate a threshold to say which values are allowed to use further

7. Rank strategy scenario

• highest sum gets best ranking

• bring the strategies into an order (1- best … n-worst)

8. Result interpretation

• If cost differences do exist is it important to evaluated them with the ranking

• Assessment insecurity, consider mistake border line, look for sensitivity

Value benefit analysis

Criteria weight1 e-business strategy alternatives

Alternative 1 Alternative 2 Alternative 3 (Ideal)

eva.2 score3 eva.2 score3 eva.2 score3

Customer focus 15% 10 1.5 10 1.5 10 1.5

Process orientation 20% 10 2 2 0.4 10 2

Cost minimizing 15% 4 0.6 2 0.3 10 1.5

Increase in sales 40% 5 2 10 4 10 4

Success probability 10% 8 0.8 5 0.5 10 1

Total 100% 6.9 6.7 10

Ranking 2. 3. 1.


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E-business roadmap definition• Different kinds of roadmaps used in practice:

• Basic ones: technology, product, organisational process roadmap

• e-business roadmap: combination of technology and organisational process roadmap, ICT enables and is means to an end for business process reengineering

• “e-business roadmap” is metaphor for an atlas of enterprise e-business development

e-business roadmap types

Roadmap class I Roadmap class II Roadmap class III

Combination

Reference object(s)

driving and key information and communication technologies

e-business application systems

enterprise e-business performances

ICT and/or application systems and/or performance enterprise e-business performances

Time Short, mid, and long term


Page 177


E-business roadmap design principles

• time based plan where an entity is, where it wants to go, and how it can get there

• Graphical presentation of e-business roadmap objects, its attributes (y-axis) and its combinations over time (x-axis)

• e-business roadmap dimension “time” is fixed → reference point is the present day (time horizon is defined by the object with latest realisation date

• e-business roadmap dimension “e-business” is defined by the chosen attribute to display

time

Object1Attributes1.1




E-b

usi

nes

s vi

ew


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E-business roadmap object attributes

Attribute Source Comments

1.Organisation EE partner specification within the scope of EE constellation specification

2. ICT / application

Specification of e-business strategy within the scope of E-business strategy formulation

3. business process

EE business process model specification within the scope of EE constellation specification

4. Status (life cycle)

Definition within this roadmap design process

ICT / application life cycle phase specification (idea, conception, design, implementation, operation)

5. Type Definition within this roadmap design process

ICT / application “make” or “buy” specification

6. Time Specification of e-business strategy within the scope of E-business strategy formulation

Milestone (implementation)


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Entity

Time

E-b

usi

nes

s vi

ew

EE road map objectattributes:• Entities• Business process• Time• ICT• Status• Type• …

EE entity road mapobject attributes:• Business process• Time• ICT• Status• Type• …

EE

lev

elE

E e

nti

ty l

evel

E-business road map framework

Time

E-b

usi

nes

s vi

ew

Time

E-b

usi

nes

s vi

ew

...

E-business roadmap of the EE has to be coordinated and harmonised with the partner roadmaps


Page 180


Summary of e-business road mapping methodology

User benefits Develops effective e-business strategies using analytical methods and tools

Bases on discussion and decisions among employees, managers and business partners

Obtains commitment to organisation’s business objectives and strategies

Anticipates today’s and future situation Creates favourable attitude towards change processes Develops tactics to implement e-business strategies Provides more systematic e-business planning approach Ensures improved management performance, e.g. by

software tool support

Documents

Roadmap for e-business implementation in Extended Enterprises Page 1 Project funded by the European Community under the ‘Competitive and Sustainable Growth’