E-Commerce:

Formulation of Strategy
Jason Chen, Ph.D.
Senior Consultant
TASKCO.COM.TW
JasonChen@taskco.com.tw
chen@gonzaga.edu
 eBusiness Key Concepts
 eBusiness
the strategy of how to automate old business models with
the aid of technology to maximize customer value
 eCommerce
the process of buying and selling over digital media (e.g.,
Internet)
 eCRM (eCustomer Relationship Management)
the process of building,sustaining, and improving
eBusiness relationships with existing and potential
customers through digital media

2
eBusiness Processes

WHY Customer Relationship

WHAT Redesign Business

Processes (Outside-In)

HOW Applying Technology

3
 Why e-Business?
 The Information economy will make all
organizations reassess their positions with respect to
their customers-supplier relationship.
 “e-Business is bound to come and unless we are able
to cope with the changes in this world, our
competitiveness will decline.”
 this is a clear testament to the power of the new

information-based economy and a warning to all

companies that inertia must be overcome and
change embraced.
By Michiyo Nakamoto, Financial Times, Nov. 23, 1999
4
New Terminology of Electronic Commerce

Electronic Business
Which includes:

Electronic Commerce
 Electronic advertising
Internet Commerce  Electronic buying and selling
Electronic  Electronic distribution
Web Data  Direct client interaction for
Commerce Interchange Marketing and customer service
 Groupware, e-mail,electronic
Electronic Funds Transfer collaboration
 Workflow, automated
Forms distribution
 Secure X.400(e-mail)
Business transactions

5
Figure 1.1 Established, Online,and Consortium Organizations in
the Marketspace

Established
organizations

Total Market

Online
Organizations

E-commerce E-consortium
Marketspace

N
6
 The Key to successful business
on the Internet ...
 The key to successful business on the
Internet is not the formulation of a
conceptual strategy but the execution of that
strategy -
 the content owners must buy into the strategy and have
the confidence of senior executives,
 often the decisions the content owners make may have
serious consequences to the organization and its
strategy
 Buy-in and open discussions are keys to success
Robert Plant, eCommerce: Formulation of Strategy, pp.67, 1999, Prentice Hall 7
Two Major Elements determines
Organization’s Success
 Core Competency
 A Value-added
Business Model
 Value, value, value…

8
 Core Competencies
Detailed Customer Knowledge and Focus
We will seek to understand, anticipate, and be responsive to our
customer’s needs.

Large-Scale System Integration

We will continuously develop, advance and protect the technical excellence
that allows us to integrate effectively the systems we design and produce.

Learn, Efficient Design and Production Systems

Our design and production systems will be among the best in the world,
characterized by efficient use of assets, short time-to market, short flow
times, short cycle times, high quality and high inventory turns.

9
Why e-Commerce Model is
beneficial to your Business?
 The e-Commerce model is a basic model of
competitive strategy, based on the
principles of low costs, high volumes, and
comprehensive service, combined with a
product range unapproachable through
traditional channels.

10
Why New Models?
 We need some new models
 for how we go about exploring IT for
competitive advantage,
 for IT infrastructure how we create it and
manage it
 for how we acquire, manage and deploy the
skills that are needed to run that infrastructure

11
The Seven Dimensions of an e-Commerce
Strategy (bonding and leadership factors)

Leadership
Bonding factors

Technology Service

Infrastructure

Brand Market

Organizational
Learning
N
12
Table 1.1 Leadership Factors for New Internet-
Based Organizations
Leadership
Factor The pillars of Success for Organization Born on the Internet
----------------------------------------------------------------------------------------------
Technology

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

 An organization must determine it is going to be an advanced technology

leader or follow a technology agenda that relies upon more stable systems
(bleeding versus leading edge).

 An organization must determine what is the necessary relationship between

the company’s technology or product strategy and the operational aspects of
that strategy.

 The technology employed by an organization must service the customers’

needs and expectations from a technology perspective.
13
Table 1.1 Leadership Factors for New Internet
-Based Organizations (continued)
Leadership
Factor The pillars of Success for Organization Born on the Internet
--------------------------------------------------------------------------------------------------
Technology

 Organizations must ask themselves questions such as “Are we a

technology company? Can the technology be used to create barriers to
entry? Can technology be used to lock in a customer base?”

 Organizations must have clearly defined the to these questions and

must work them into their business plan.
Market
 An organization must determine its target market and whether it is still
realistically open to new entrants.

 An organization must understand how the market is going to segment

and grow over the near and longer term and know whether the
organization will be able to move rapidly enough to meet those
changing needs.
14
Table 1.1 Leadership Factors for New Internet
-Based Organizations (continued)

Leadership
Factor The pillars of Success for Organization Born on the Internet
----------------------------------------------------------------------------------------------
Market
 Being born on the Net requires that the organization understand the
possible moves from majors established organizations and utilize its
own nimbleness to counter them.
Service
 An organization must know its customers’ expectations regarding
service level

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

 An organization must understand its own Internet service value chain,

the components of which are
--- Understanding the relationship between attracting customers and
service levels
15
Table 1.1 Leadership Factors for New Internet
-Based Organizations (continued)

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

 Understanding how service plays a role in the customer fulfillment

process, where the purchase is dispatched.

 Understanding the role of customer service in retaining customers and

maintaining site adhesion.

16
 Table 1.1 Leadership Factors for New Internet
-Based Organizations (continued)

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

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

strong brand
 An organization must understand the basis of its brand. Is it
--- Technology leadership?
--- Service provision?
--- Market positioning?

17
 Table 1.2 Leadership Factors for Established
Organization
Leadership
Factor The pillars of Success for Traditional Established Organizations
--------------------------------------------------------------------------------------------------
Technology

 An organization must understand what technology implications are for

that organization --Internet,enterprise resource planning, data
Warehouse, etc.

 Organization must know whether their processes are aligned to an

Internet technology-based approach.

 An organization must understand how its customers view and use

technology within the marketspace and must leverage that knowledge
to build an effective infrastructure that facilities an agile and flexible e-
commerce strategy.

18
Table 1.2 Leadership Factors for Established
Organization (continued)
Leadership
Factor The pillars of Success for Traditional Established Organizations
----------------------------------------------------------------------------------------------.
Technology

 An organization must assess its internal value chain as well as those of

its suppliers and build to minimize costs and maximize efficiencies.

Market
 An organization must understand what the implications of e-commerce
and technology are for the marketspace in which the organization is to
compete in terms of:

--- Branding

--- Relationship management

19
Table 1.2 Leadership Factors for Established
Organization (continued)

Leadership
Factor The pillars of Success for Traditional Established Organizations
----------------------------------------------------------------------------------------------
Market
 An organization must determine whether its target market is the same
as its traditional bricks-mortar marketspace or if it has moved.

 If its core marketspace have moved, is it still realistically open to

traditional organizations moving onto the Net?

 An organization must understand how the market is going o segment

and grow over the near future due to the impact of the internet and
must determine whether the organization will be able to move rapidly
enough to meet those changing needs.

20
Table 1.2 Leadership Factors for Established
Organization (continued)
Leadership
Factor The pillars of Success for Traditional Established Organizations
--------------------------------------------------------------------------------------------------.
Market
 Organization must assess the impact of pure Internet-based
organizations and use their own traditional core strengths-market
knowledge and product knowledge to offset Internet-based companies’
nimibleness.

Service
 An organization must determine the new service level expectations of
the customer.

 An organization must understand what the customers’ new value

proposition requirements are in terms of cost, service level
expectations, and information-based service.

21
Table 1.2 Leadership Factors for established
Organization (continued)
Leadership
Factor The pillars of Success for Traditional Established Organizations
----------------------------------------------------------------------------------------------
Service
 Organizations must reassess their service value chain.

-- How are we going to acquire customers?

-- How are we going to develop customer relationships through the

new medium?

-- How can we best fulfill the customers’ needs -- bricks and

mortar,clicks and mortar, or online?

-- How do we support our customers during purchase and through

order fulfillment?

-- How do we retain customers between orders?

22
 Table 1.2 Leadership Factors for established
Organization (continued)

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

-- Do we have the ability to create a strong dot-com brand?

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

23
Table 1.3 Bonding Factors Toward the Development
of E-commerce Strategy
Bonding
Factors Issues
--------------------------------------------------------------------------------------------------
Leadership

 Does the CEO have a vision for e-commerce?

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

stride?

 Do the senior executives share a technology vision? Also, do they

understand its impact upon their functional area and the organization as
a whole?

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

24
Table 1.3 Bonding Factors Toward the Development
of E-commerce Strategy (continued)
Bonding
Factors Issues
--------------------------------------------------------------------------------------------------
Infrastructure

 Can the organization’s technology infrastructure support the new

model of e-business

 Can the organization’s technology infrastructure support the move to

mass customization?

 What are the implications for the organizational changes needed to be

competitive in an e-commerce environment?

 Does the organization’s infrastructure interface with the infrastructures

of their suppliers and customers in the electronic marketplace?

25
Table 1.3 Bonding Factors Toward the Development
of E-commerce Strategy (continued)

Bonding
Factors Issues
----------------------------------------------------------------------------------------------.
Organizational
Learning
 Does the organization support internal learning?
-- Scanning the technology horizon for change and then adopting that
change where appropriate

-- Developing a self-awareness inside the boundaries of the

organization to drive practice and process change

 Can the learning of the organization with respect to markets, product,

technology, processes, etc., be quickly refocused into a new
technology-based method of production?

26
Key Factors for an Organization’s
Success
 Several key factors are key to determining
an organization’s potential for success:
 Does the organization possess first-mover
advantage in the marketspace?
 Does the organization differentitate itself in the
marketspace?
 Does the organization posses the ability to be
flexible and agile in the e-marketspace?
N
27
The Executive should ...
 The development and execution of a
successful e-commerce strategy is a difficult
intellectual and creative task, one that every
executive will have to undertake.
 Key Steps:
 determine the core competencies of your organization
 determine the limitation in the new markepspace
 assess the mechanisms available to move forward.

28
Types of marketspace
 B2C
 B2B
 B2G
 G2B
 B2B2C
 B2B2E
 The e-consortium
29
 Creating an Integrated
e-Commerce Strategy
 Four positional factors
 Technology
 Service
 Market
 Brand
 Three bonding factors
 Leadership
 Infrastructure
 Organizational Learning.
Ch.2
30
Figure 2.1: The Seven Dimensions of an e-
Commerce Strategy (bonding and
leadership factors)

Leadership
Bonding factors

Technology Service

Infrastructure

Brand Market

Organizational
Learning
N
31
Figure 2.1 The Seven Dimensions of an
e-Commerce Strategy

Leadership

Technology Service

Infrastructure

Brand Market

Organizational
Learning
N
32
What is the Next ...
 Based on the seven-dimension e-C strategy
model ...
 If you want your company to succeed, the
solution is to move to an e-Commerce
model ASAP.

33
Figure 2.1 The Seven Dimensions of an
e-Commerce Strategy (bonding and
leadership factors)

Bonding factors
Technology Service

Leadership

Organizational
Learning Infrastructure

Brand Market

N
34
What is the Next ...
 Based on the seven-dimension e-Commerce
strategy model ...
 If you want your company to succeed, the
solution is to move to an e-Commerce
model ASAP.

35
Creating an Integrated
e-Commerce Strategy (continued)
 Organizations will always be adjusting
their strategies to meet the changing
environment in which they operate, and
the model aims at assisting executives
in understanding the importance and
weighting that need to be applied to
each factor.

36
Figure 2.2 The Bonds of an e-Commerce
Strategy

Leadership
Leadership

Organizational Infrastructure
Learning

N
37
Integration of the Four e-Commerce
Leadership Propositions
 In creating an e-Commerce strategy, it is clearly to
align and integrate the four main areas of
positional strategic focus: technology, brand,
service, and market.
 This is a challenging task that must be deeply
considered at the outset of strategy formulation
since both the dollar and opportunity costs of
dramatic strategic change after execution can be
high.

38
Integration of the Four e-Commerce
Leadership Propositions (continued)

 This is not to say that change is not

occurring; change in this arena is inevitable
and continuous, with victory coming to
those who can adapt fastest and be nimble
in the face of change.

39
 Figure 2.3 Integration of the Four
e-Commerce Leadership Propositions

Technology
Leadership

Brand Service
Integrated e-commerce strategy Leadership
Leadership

Market
Leadership
N
40
Technology Leadership
 It involves the early adoption of an
emerging technology to achieve a
preemptive position.
 e-Commerce strategies focused on
leadership through technology that are
found in all industry sectors.

41
Brand Leadership
 Louis Gerstner, Chairman & CEO: IBM
 Branding - it is a very important issue and it will dominate
business thinking I suspect for a decade or more.
Source: IBM Executive Conference on Information Systems, Latin America,
Miami, FL, September 1, 1998

 Internet ability to influence, change, or reinforce

corporate branding.

42
Developing a Winning E-strategy
 1. Ensure the project is backed by a senior
executive.
 2. Develop a strategy before developing a
Web presence.
 3. Develop a strategy by focusing on
technology, branding, marketing, and
service.

43
Developing a Winning E-strategy
(continued)

 4. Develop an IT infrastructure capable of

matching the strategic objectives.
 5. Identify and use knowledge in the
organization.
 6. The strategy must add value for
customers, and it must change as the
requirements of those customers change.

44
 Porter’s Five Competitive Forces Model
NEW Threats SUBSTITUTE
MARKET PRODUCTS
ENTRANTS & SERVICES

TRADITIONAL
THE FIRM
COMPETITORS

SUPPLIERS CUSTOMERS
Bargaining power
N
TM -
 Elements of Industry Structure

N
Dr. Chen, The Trends of the Information Systems Technology TM -46
 Impact of Competitive Forces
Potential Uses of IT
Force Implication to Combat Force

Threat of new entrants New capacity Provide entry barriers:

Substantial resources economies of scale
Reduced prices or inflation switching costs
of incumbent’s costs product differentiation
access to distribution channels

Buyers’ bargaining power Prices forced down Buyer selection

High quality Switching costs
More services Differentiation
Competition encouraged Entry barriers

Suppliers’ bargaining Prices raised Selection

power Reduced quality and services Threat of backward integration
(labor)

Threat of substitute Potential returns limited Improve price/performance

products or services Ceiling on prices Redefine products and services

Traditional intraindustry Competition: Cost-effectiveness

rivals price Market access
product Differentiation:
distribution and service product
services
firm

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

 Activities of Value Chain

Primary Activities

Finance Marketing
Production Outbound
Inbound and
and
and Service
Logistics Accounting Manufacturing Logistics
Sales

Support Activities

Administrative and Other

Indirect Value Added

TM -48
 Manufacturing Industry Value Chain
Product and Service Flow
Primary Activities

Production Sales and

Research and
Engineering and Marketing Service
Development Distributiion
Manufacturing

Support Activities

Administrative and Other

Indirect Value Added

TM -49
 Ownership Issues
 E-centric Structure + Content = Success

Content alone is not sufficient for success

Successes come from a balanced business model

that involves each business area content provider
contributing to the overall business model.

Ch.3
50
Problems and Issues that e-C
Strategists face ...
 Problems and issues that e-C strategists
going forward may face are:
 business models
 transform from the old to the new, or
 start from afresh

 culture: change
 time
 time to market
 sustainable competitive advantage and customer

value
51
 Figure 3.1 The E-centric Management
Structure

CEO

Sales &
Manufacturing Logistics Finance Personnel
Service

Sales & Logistics

Service

Manufacturing Finance
VP
E-commerce

Engineering Personnel
Purchasing
52
 Figure 3.2 The Relationships Structure of an
E-centric Organization

Senior
Management

Marketing VP Content
Automation E-commerce Owners

Peer-to-Peer
Planning

53
Senior Strategic Management
Group
 The overriding driver of a successful
Internet strategy is the leadership
demonstrated by senior levels of the
organization.
 Content and services are based around the value
and investment criteria defined by the executive
steering group.
 The criteria will be in the form of brand,
service, and market specifications, with a
directive on technological leadership issues.
54
Marketing-Automation-Strategy
(MAS) Group
 The MAS group develops a framework for
the operational e-commerce strategy, which
is then implemented at the level of the
content owners.
 This is performed through the creation of
peer to peer planning groups.

55
Planning Groups
 The planning group  security
provides the central  content parameters
 format issues
structure through
 partner-relationship mgt.
which the core
 request for comments,
operational issues of proposal standards
e-commerce strategy  access parameters from
are derived, policies a technical perspective
such as: (speeds, bandwidth,
requirements, etc.)

56
 Content
 Content may be king, but it is value chain
that is the power behind the throne.
 what content is necessary for success,
 what customers want in their content,
 how the content adds value to customers.
 Content is strong only when derived from a
strong and flexible business model such as that
of AOL Time Warner, which can service the
customer globally on the customer’s terms. 57
 Conclusion
 The key to successful business on the Internet
is not the formulation of a conceptual strategy
but the execution of that strategy.
 To execute effectively, content ownership has
to be exploited.
 The content owner must buy into the strategy
and have the confidence of senior executives.
 Buy-in and open discussions are keys to success.
58
 E-Strategy Leadership through a
Technology Focus
 The technology component has to be in
balance and harmony with the other
positional factors - brand, market
positioning, and service - to be truly
effective.
 Strategy will be based on
 technology strength,
 technology leadership, or
Ch.4  enabling role. 59
E-Strategy Leadership through a
Technology Focus (continued)
 The area of technology leadership involves
much more than purely the hardware and
software that compose an organization’s
physical infrastructure.
 The 7S model can be employed in a new
way to provide a corporate framework
through which executives can formulate an
internal strategy for e-Commerce.
60
 Figure 4.1 The Mckinsey 7S Framework

Structure

Strategy Systems

Shared
Values
Skills Style

Staff
(Source: R.H.Waterman, T.J.Peters, and
J.R.Philips, “Structure Is Not Organization,”
The Mckinsey Quarterly, Summer 1980, p.7)
61
 Table 4.1 A Glossary of the 7Ss

 Strategy (overall corporate)

 Strategy can be defined as the determination of a course of action to be
followed in order to achieve a desired goal, position, or vision.
 Structure
 An organization’s structure is the interrelationship of processes and
human capital in order to fulfill the enterprise’s strategic objectives.
 Systems
 The organization’s information systems and infrastructure.

 Staff
 Human recourses management

 Style
 Corporate style is a synthesis of the leadership philosophy of
executive management, the internal corporate culture generated, and
the orientation an organization adopts to its markets, customers, and
competitors.
62
Table 4.1 A Glossary of the 7Ss (continued)

 Skills
 The unique or distinctive characteristics associated with an
organization’s human capital.
 Shared Values
 The concepts that an organization utilizes to drive toward a common

goal through common objectives and a common value set.

63
 Strategy: The Alignment of
Technology and Corporate Planning
 The whole basis of technology strategy
formulation is the ability of the organization’s
executive to achieve alignment, that is
alignment between the technology strategy and
the strategy of the enterprise as a whole.
Figure 4.2: Strategy and Technology Horizons

Conceptual
CEO Strategic Horizon Emerging
Technology Horizon
CIO
64
 Strategy: The Alignment of Technology
and Corporate Planning (continued)

 The best-case senior is for the CEO and CIO to

have synergy and an aligned planning horizon.
 Executives should be efficient and adding
value by planning ahead and contemplating the
bigger picture rather than being reactive,
putting out fires.
Figure 4.3: Technology Planning Horizons

Declining Core Emerging Lead Time

Core Core Aligned
CIO & CEO
Planning Horizon
Technology Window N
65
Strategy: The Alignment of Technology
and Corporate Planning (continued)

 The alignment of IT strategy and

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

66
Structure: Characteristics of a
Flexible Agile e-Organization
Figure 4.4 Technology Strengths (nature of the product and
the maturity of the organization)

Service
Market
Flexibility
Knowledge

Product Type e-Org

Goods

Knowledge
Low Cost
management

Youthful Mature

Age of Organization
N
67
Systems:
Figure 4.5 An Integrated E-commerce Systems
Architecture

Customer
Customer Customer

Front Office--Internet Portal

Management

ERP
Knowledge
Management Back Office
Transaction Processing
Data
Warehouse
Back Office -- Internet Portal

Supplier ERP Interface

68
 Staffing:
Figure 4.10 The Organizational Level HR Requirements

Executive Team
Information Systems 3Cs
3Cs
Organizational Structure

Strategic development and Customer

ERP business planning including
IS planning
Call Center
KM Functional level information
technology planning

DW Project scoping and planning Supplier

Application development
Technical Relationship
and implementation
Systems Management
3Cs: Capture, Cultivate, and Create employees and their skills -
are managed and coordinated through the executive teams 69
 Six Vital Drivers for e-Commerce
 1. The obsessive and continuous focus on the
business imperative,
 2. Interpretation of external IT success stories,
 3. Establishment and maintenance of IT
executive relationship,
 4. Concentration of the IT development effort,
 5. Achievement of a shared and challenging
vision of the role of IT
70
Style and Shared Values -
Definitions
 Style: “characterization of how key
managers behave in achieving the
organization’s goals; also the cultural style
of the organization,”
 Shared values: “ the significant meanings or
concepts that an organization utilizes to
drive towards a common goal through
common objectives and a common value
set.”
71
Style and Shared Values:
Figure 4.11 - The Dimensions of an Agile E-organization

Key characteristics to
Low Transaction achieving an agile e-
Costs organization are three
initiatives:
1. The drive for
Scale& Scale& flexibility in process.
Scope
E-org Scope 2. The drive to lower
transaction costs.

Scale& Mass 3. The drive to achieve

Flexibility
Scope Customization mass customization
for the customer.

N
72
1. Strategy
Issue: Focus upon alignment and planning

 Action Items:
 The CIO must have a clear vision of the technology
horizon and be able to communicate the implications of
these new technologies to the CEO and the business.
 Build a lead-time buffer for organizational learning
between the technology horizon and the deployment of
that technology.
 Create a roll-in, roll-out technology window; new
technology becomes an emerging core technology,
transitioning to core before finally declining and being
discarded.
73
2. Structure
Issue: Focus upon becoming an e-organization

 Action Items:
 Strive to balance organizational and technical
strategies.
 Youthful companies must exploit the flexibility and
low-cost structure to complete. Aiming to capture self-
knowledge and market knowledge to fend off existing
organizations.
 Mature organizations must leverage their extensive
self-knowledge and market knowledge in order to
reduce their costs and recreate their processes in a more
flexible manner.
74
3. Systems
Issue: Technology integration

 Action Items:
 ERP deployment: Automation without change is
detrimental; the EPR must be deployed with the aim of
generating greater organizational self-knowledge,
flexibility of process, and lowered operational costs.
 Data warehouse: Focus upon the two dimensions of
data warehousing: cost efficiency, using the ERP data
through the data warehouse to reduce operational costs,
and information effectiveness to generate competitive
intelligence in the form of added-value information
services.

75
3. Systems
Issue: Technology integration (Continued)

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

76
4. Staffing
Issue: The role of the CIO

 Action Items:
 Create a strategy for retaining and maintaining a strong
pool of skills both at the executive level and at the
technical level.
 Think outside the box for staffing solutions, and
identify partners and consultants that could assist the
process should internal skill sets be unavailable.
 Many issues surrounding staff development have
traditional solutions that involve building trust,
communications, and growth opportunities for the
employee, as well as the organization understanding the
value of the employee and the employee adopting the
values of the corporation.
77
5. Skills
Issue: The role of the CIO

 Action Items:
 The CIO must continue to add value through traditional
routes, but adding to this list the ability to Capture,
Cultivate, and Create an employee base with vision,
technical skill, and creativity.
 Relationship management: This is a driver that requires
heightened attention and focus by the entire
organization’s early warning system of change in the
marketplace and in customer needs.

78
5. Skills
Issue: The role of the CIO (continued)

 Action Items:
 The heightened necessity to nurture employees and
develop the organization’s internal flexibility, creating
a dot-com atmosphere of excitement , drive, openness,
and creativity within the corporation.
 Technical skills: More than ever the CIO must develop
crossover skills and the entrepreneurial atmosphere of
the new dot-com organization to leverage an integrated
ERP, KM, and DW technology position.

79
6&7 Style and shared values
Issue: Leadership

 Action Items:
 Leadership has to come from the very highest reaches
of the organization.
 Technology allows organizations to add value to
customers through provision of information services.
 A technology strategy does not come solely from
technology but is based upon leverage the technology
through marketing, service, and branding to deliver
added value to the customer in the form of information.

80
6&7 Style and shared values
Issue: Leadership (continued)

 Action Items:
 A technology leadership strategy must build value to
the organization, delivering the information the
organization requires in order to get closer to the
customer and/or wider market coverage as determined
in the overall strategy plan of the organization.
 The strategy technology plan must be aligned with the
overall plan of the organization.

81
 Developing a Market Focus:
Sector Strategies in Segmenting Markets

 The importance of market leadership

through the Internet channel has rapidly
become an important strategy item for
established organization.
 E-C companies realize that they have to rise
to the challenges posed by their virtual
competitors in both cyberspace and in
traditional marketspaces.
Ch. 5
82
 Figure 5.1 The Marketspace Spectrum of E-
commerce

Internet-based An Information A Mixed Service

Manufacturing
Organization Service and Goods
Organization Organization

Service Production

Banks Hotels, Air lines Automobiles

Internet
Markepspace Mortgage brokers Consumer Electronics Clothing
Insurance Medical Systems Machine tools
Newspapers Computers

N
83
 Figure 5.2 Internal and External Views of CA-
Chemical’s Internet Relationship
Functional Area External View
Internal View
Information
Community
Benefits Sites

Human Recruiting
Human Corporate Resources
Resources
Scientific Information
401K Greater Access
Community Banks
To information
And Data Access and
Research
Better Internal Network News
Database Access Partners Group

Study Center Clinical MDs, Physicians,

Relationships Development and Study Centers

Partners
Cycle Time
Manufacturing
Reduction
Procurement
84
 Figure 5.3 Sony Market Leadership
Partnering
Create bonds and strong
relationships between
partners. Develop a
leading market,
technology leadership Create the
position ability of all
Create a Technology
Convergent unified technologies
Integration
Branding global Market leadership to connect
brand together
Internally drive the
organization to
accommodate change
through internet and digital
technologies. Create long-term
customer ”buy-in”as technology
Brand leadership creates loyalty

Flexibility,change,and
long-term desirability
85
 Figure 5.4 US Medical Systems Market Leadership

Service

Increased Facilitate
Customer Interuser Complement
Wider Relationship Communication
Quality The
Market
Organization’s
Coverage
products
Marketing Create a Technology
Focus upon
Unified Market Leadership
Global Key issues:
brand Responsiveness,
Delivery,etc.

reinforce via Expand

technology Global brand

Brand
86
Rules of Internet Strategy:
Market Leadership
 1. Determine the degree to which you will remove or offer
alternatives to the layers of intermediaries that exist
between the organization and the customer through the
internet channel.
 2. Disintermediation is not always positive. Play to your
advantages – if you have a strong retail presence utilize it;
it is a strength online rivals don’t have immediate access to
on their own.
 3. Regardless of product, you need a basic internet
presence and you need to offer value to the visitor. Even if
that is merely traditional contract information, present it in
such a way that the brand is reinforced.

87
Rules of Internet Strategy:
Market Leadership (Continued)
 4. Carefully align your internet strategy with your overall
business strategy.
 5. Avoid frequent and abrupt changes of internet strategy
direction.
 6. Develop a cohesive strategy across all brands.
 7. Make your market leadership strategy consistent with
the branding strategy in the eyes of the customer, not just
in the eyes the executives of the advertising agency and
marketing groups.
 8. Develop a strategy before developing a Web presence.

88
Rules of Internet Strategy:
Market Leadership (continued)
 9. Develop an IT infrastructure to cope with and integrate
the changes brought on by a Web presence before they
occur. This may be a viable partnering growth opportunity
with a technology vendor.
 10. Don’t bring an e-commerce solution to the marketplace
before it is ready or before the marketplace is ready for it.
 11. To get closer to the customer, you must add value for
that customer and continue to add value as the
requirements of that customer change over time.

89
Rules of Internet Strategy:
Market Leadership (continued)
 12. Derive flexibility and transaction capability from the
technology infrastructure upon which the Web presence is
based.
 13. The Web allows product-based companies to offer new
information-based products through the low-cost,
omnipotent distribution mechanism of the Internet.
 14. If the goal is mass customization, then incorporate the
ingredients of speed, innovation, agility, and technology
and leverage them through the internet relationship with
the customer.

90
Rules of Internet Strategy :
Market Leadership (continued)
 15. Low-cost commodity producers are not immune from
the threat of information-added-value competition from
within their industry as generated by large, traditional
market competitors through the internet.

91
 Service Leadership:
Adding Value to the Customer at Every
Point of Contact
 For pure Internet-based service
organizations, it has come to mean fast,
reliable service that is efficient to use and
seamless in delivery.
 Customers expect the low cost of
transactional services via the Internet to be
matched by easy-to-use, ergonomic
interfaces, backed up by an information-rich
Ch. 6
premium, global, 24x7 level of service.
92
 Figure 6.1 Internet Service Value Chain
(From Bricks-and-Mortar to Clicks-and-Mortar Transition)

The Brand
development Reinforcement
and execution
of a successful
strategy in
each of the Customer Customer Customer Customer
Internet service Acquisition Support Fulfillment Continuance
value chain Support
(Prepurchase (During (Purchase
segments is Support) Purchase) Dispatch) (Postpurchase)
vital for any
organization
wishing to
Customer Service Channel
operate all or
part of its
business online
The Value Chain is “Where the Rubber of e-Commerce Meets the Road”

N
93
 Rules of Internet Strategy:
Service Leadership
 1. Established strategies of customer service still apply.
 2. Internet service strength is derived from providing added
information to the customer on the customer’s terms.
 3. Internet customer service aims to build an affinity
relationship.
 4. The Internet provides a low-cost, high-quality service channel
opportunity with a global reach.
 5. A call center strategy must be defined.
 6. The e-mail interface channel must be defined and planned for.
 7. A strategy for the virtual call center must be defined well in
advance of its potential implementation.
94
 E-branding: The Emergence of
New Global Brands
 The development of an online branding strategy is a
complex operation and one that clearly needs to be
tied into the organization’s strategy as a whole,
based on the other three factors:
 Technology. How are we attempting to leverage the
technology, with what consequence on our brand?
 Market. What is our market segmentation strategy? How
can we define brands across these?
 Service. What level of service will we deliver through
this channel - full service, low-cost service? How will
Ch. 7 this impact our brand?
95
Figure 7.1 Internet Branding
Strategies

3. Brand
Reinforcement

4. Brand
Reposition

1. Brand
2. Brand
Creation
Follower

96
 Internet Branding Strategies
 1. Brand Creation: First to Market Wins and
Wins Big
 for new start-ups and for corporations moving to the
Internet as a business channel, the formulation of an
online brand is vital. Those companies (e.g., Amazon,
eBay) not only created a new brand, but successfully
executed their business model.
 2. Brand Follower: A Last-Mover Disadvantage
or Recoverable Position?
 This is evident in copycat sites that mimic the first,
second, or even third mover in an industry but have
little intrinsic value of their own. 97
 Internet Branding Strategies (continued)
 3. Brand Reinforcement - The Development of a
Continuous Brand Model across ALL channels,
media, and languages, including the Internet
 A key to a successful business positioning is to achieve the
position of brand leader - universal recognition of name
and product. “Sales may not be the goal of every
organization, but ultimately every organization wants to
ensure that its brand is reinforced online.”
 In order to achieve this, organizations have to provide their
customers or viewers with current, relevant information,
building the quality of their relationships with customers on
a continuing bases --- customers service value chain. 98
Internet Branding Strategies (continued)
 4. Brand Repositions: Core Brand Values
Combined with a Modern Customer Experience
 Organizations that move through brand repositioning to
create new channels to complement their existing ones,
attempting to add value to the customer through
reduced cost and convenience, but also offering a
source of information for the discerning consumer.
 Repositioning may be radical or gradual, depending on
the organization and its branding needs.

99
Rules of Internet Strategy:
Brand Leadership
 1. In new organization, creation of a brand has to be a
primary strategic objective.
 2. Branding strength comes from being first mover in
combination with high visibility and the added value
derived from the information surrounding the product.
 3. Brand reinforcement is a continuous task. The aim is to
use the brand reinforcement process to maintain an
organization’s relationship with the customer. This is
achieved by continuously adding value to the customer
through the site.

100
Rules of Internet Strategy:
Brand Leadership (Continued)
 4. Brand reinforcement adds significant value to
organizations that can inform consumers, but not sell
directly, such as drug manufacturers.
 5. Brand positioning can be considered using the internet
service value chain model, adding brand definition and
value at each point on that chain.
 6. Added value for the customer comes from continuous
and innovative change of the information surrounding the
product and the organization.

101
Rules of Internet Strategy:
Brand Leadership (Continued)
 7. Utilize a mass customization approach in order to move
closer to the customer and add value to the customer but
not at the expense of the brand.
 8. The Internet allows low-cost global branding to occur,
hence wider market coverage; however, the cultural
sensitivities of the global brand must not be lost through
the technology.9.
 Brand followers need to reposition as quickly and
effectively as possible.

102
Rules of Internet Strategy:
Brand Leadership (Continued)
 10. Established organizations that have not established a
branding strategy based upon the Internet need to develop
one rapidly and align their overall strategy accordingly.
 11. Brand repositioning can be an expensive and difficult
process. The establishment of strong and vibrant brand at
the commencement of online activity is vital.

103
 Formulating an Internet Rollout
Strategy
 E-Commerce as in all aspects of IT and strategy,
strategic positioning meant little if it could not be
implemented.
 The development and hosting of an organization’s
Internet presence forms a critical component in the
level of success experienced.

Ch. 8
104
Strategies for Developing an
Organization’s Website
 The maturity of the organization
 The access to skills among its internal technology
group
 The necessity to create and develop proprietary
technologies
 The flexibility of the content owners to drive,
control, and harness change
 The time pressure to be online in the
organization’s virtual marketspace or to lead its
market in terms of service and brand
105
 The Rollout of an e-Commerce
Implementation
 The rollout of an e-C implementation is
composed of two dimensions:
 Site development
 where strategic goals, ownership issues, and technology
all converge to produce a working system
 Website hosting
 selection of, and deployment to, a location or
organization where the system hardware and software
will be physically located, maintained, and managed.

106
 Information System Department
Internal
I R&D Team
(Skunks Internal
N
T Works) E-C systems Customer
infrastructure Added
E
R Value
Partnering
N Mode
A Process
L Integration

Corporate
Ownership & External
Leadership Customer
Added
Value
E
X Internet
T Systems
E Development Internal development route
R Company External development route
N Partnering route
A Request for proposal
L System deployment

Figure 8.1: Dimensions of Corporate Internet Development

Development Options:
Where to Develop an e-
Commerce System
Three Basic Development Practices:
 1. Internal development

 Corporations create their eC systems within the

boundaries of their organizations. (for early movers)
 2. External development
 The system’s development is largely outsourced to third
parties to obtain the desired results.
 3. Selective sourcing or partnering
 External vendors are brought on-site to assist in the
development process. N
108
 Table 8.1: E-commerce Development
Options --Their Strengths and Weaknesses
Major Strengths Majors Weaknesses
 Internal . Allows proprietary systems . Cost-can be very expense to
 Development and technologies to be first mover
 developed . Resource intensiveness-continuous
. Maximizes internal learning need for new skills and technologies
 . Maximizes system integration . Commitment from all parties
 External . Taps into existing expertise . Cost-not a one-time cost; little
 Development . Offers a variety of external payback in the form of internalization
services of learning
 . Gets up to speed quickly . Cookie-cutter solutions--vendors
 using same ideas and formats over
and over again
 . Difficulty monitoring and controlling
 . Service limitations--advantages
gained through flexible partnering
may be offset by the necessary to
monitor and control those
relationships
109
 E-commerce Development Options --
Their Strengths and Weaknesses (continued)
Major Strengths Majors Weaknesses
 Partnering . Offers variety . Lack of experience-partners may be
 . Gets up to speed quickly overextended; too little time for each
. Allows flexibility clients
 . Lack of experience-experience of
 partners in new technologies possibly
 limited, raising risk concerns
 . Cost- integration costs, monitoring
costs, and cost control issues

110
 Information System Department
Internal
I R&D Team
(Skunks Internal
N
T Works) E-C systems Customer
infrastructure Added
E
R Value
Partnering
N Mode
A Process
L Integration

Corporate
Ownership & External
Leadership Customer
Added
Value
E
X Internet
T Systems
E Development Internal development route
R Company External development route
N Partnering route
A Request for proposal
L System deployment

Figure 8.1: Dimensions of Corporate Internet Development

 Figure 8.2 Determinants of Internet Development Souring
Options
E-commerce
Strategy Development

Positive no Create Executive

Leadership Level Awareness
yes
Clarity Functional
Functional no
Intent
Intent is Clear
yes
Create Infrastructure to
no
Infrastructure in Place Accommodate functional
yes intent

In-house Expertise no No time Sensitivity

Development speed
Available Requirement
yes OPTIONAL
Proprietary Leadership no Highly
Time -Internal development
Requirement Issues:training&interim
yes sensitive
Solutions
Partner -External development
Internal Development Issues:outsource&monitor
Four Hosting Options
 1. Dedicated hosting
 the company outsources its requirements to a
Web hosting except that the system is located
on a dedicated server.
 2. Shared hosting
 an organization outsources the storage,
maintenance, and monitoring of its system to a
Web hosting company. Its system is located on
a shared server.
113
Four Hosting Options (continued)

 3. Internal hosting
 a company stores, maintains, and monitors its
own systems at its own internal data center.
 4. Colocation
 a company stores, maintains, and monitors its
own information and systems, but utilizes the
services of a Web hosting company to store the
server.

114
Factors for Making a Hosting
Decision
Metrics relating to site performance (from IBM):
 Performance

 Scalability

 Availability

 Reliability

 Simplicity

 Integration

 Security
115
Figure 8.3 Building an End-to-End Response Time

Application Design

Web Traffic Web Page

Profiles Design
End-to-End
Response Time
Network Server
Topology Performance
& Capacity Configuration

N
116
 Internet Strategy Effectiveness –
A Scorecard Approach
 The Internet and e-Commerce presents
executives with a new variant on an old
problem -
 “What am I getting out of this technology
investment?”

Ch. 9
117
Internet Strategy Effectiveness –
A Scorecard Approach (continued)
 Successful CEO-CIO teams should understand the
value of an activity-based approach to IT ROI
analysis
 1. The creation of an ROI value criteria
 2. Creation of a metrics program to monitor the ROI
value criteria
 3. Data capture
 4. Actual ROI analysis from the metrics data

118
Approach of selling online or just
advertising the site to reinforce the brand
 1. Determine forces of internal and external to the
organization that influence the organization’s e-
Commerce strategy formulation.
 2.Create a metrics program based on the use of
value criteria in the form of an Internet
effectiveness scorecard (use of activity-based ROI
analysis).
 3. Determine the effectiveness of the value criteria
at the ownership levels, the process levels, and the
transactional levels.
119
 Figure 9.1: Forces in Strategy Formulation

Forces External Forces Internal

to the to the
Organization Marketspace Organization Ownership
Forces Stakeholder
Marketspace Inputs Stakeholder
Rivals Strategic Inputs
Goals Development
Customer E-commerce
Site Feedback System
Marketspace Constraints
Interaction Customer
E-commerce
Dynamics Metrics
Environment
Customer Internet Site
Integration with
Customer Existing Service
E-commerce or Manufacturing
Site Interaction Process

N
 Start Point

Initial vanity page

Develop Metrics program
Update Value Criteria Update
Value Criteria -What does the customer expect? Value Criteria
-How does this relate to our
overall strategy?
-Channel considerations
-Transaction - versus
information-based products

Creation of internet strategy

Effectiveness Scorecard
Update Update
Create or update metrics Create metrics for internet metrics Create or update
Internet presence Effectiveness Scorecard Internet presence

Monitor Metrics

E-value map analysis Analysis of

Internet Effectiveness scorecard
Against E-strategy

Financial ROI Analysis Process ROI Analysis

Financial Ownership Focus Manufacturing/Service Product

Group Ownership Focus Group
Figure 9.2
Creation of an E-commerce Metrics Program
Internet Effectiveness Scorecard
 The scorecard is divided into the following
seven sections:
 Financial impact
 Competitive Leadership
 Brand
 Service
 Market
 Technology
 Internet Site Metrics
122
Table 9.1 Effectiveness Rating Scale
Scale Effectiveness Description

1 Ineffectiveness Had a strongly negative impact on reaching the

goals(s) the organization was trying to achieve
2
3 Negative Had a negative impact on reaching the goal(s) the
organization was trying to achieve
4
5 Neutral Had no impact on reaching the goal(s) the
organization was trying to achieve
6
7 Positive Had a positive impact on reaching the goal(s) the
organization was trying to achieve
8
9
10 Highly effective Had a very positive impact on reaching the goal(s)
the organization was trying to achieve TM -123
 1. Financial Metric Forecast Actual Industry Effectiveness
Initial Goal Results Best Rating
Impact Practice
Was your strategy
effective as a mechanism
for reducing costs?
Was your strategy
effective as a mechanism
for generating revenue?
Was your strategy
effective as a mechanism
for transferring revenues
to a low-cost channel?
Was your strategy
effective as a mechanism
for increasing market
share?
Was your strategy
effective as a mechanism
for increasing transaction
volume?

ΣER/5=

TM -124
 2.Competitive Metric Forecast Actual Industry Effectiveness
Initial Goal Results Best Rating
Leadership Practice
Was the effectiveness of your
development increased by
the involvement and support
of the CEO, CIO, or other
senior executive from the
outset?
Did the technology
effectively add value to your
customers through provision
of information services?
Were the organizational and
technology strategy plans
effectively aligned?
Was our approach to the
sourcing of the development
effective in achieving the
goal of rapid system
deployment?
Did the Web technology
effectively reduce the costs
associated with updating our
customers’ information
requirements?

TM -125
Continued

2.Competitive Metric Forecast Actual Industry Effectiveness

Initial Goal Results Best Rating
Leadership Practice
Did the technology
effectively allow the
organization to leverage its
existing brand, products,
and strategy?
Is the technology effective in
allowing the organization to
get closer to the customer
(and/or attain wider market
coverage)?

ΣER/7=

TM -126
 3.Brand Metric Forecast Actual Industry Effectiveness
Initial Goal Results Best Rating
Practice
Was being an early mover in
combination with high
presence visibility an
effective strategy?
By adding information the
product to the site, did we
effectively add value to the
branding strategy?
Has brand reinforcement
been an effective
intermediate strategy prior
to offering online sales and
services?
Is brand reinforcement an
effective strategy where we
are prevented from selling
online?
Is continuous and innovative
change of the information
surrounding the products
and the organization
effective in adding value to
the brand?

TM -127
Continued

3.Brand Metric Forecast Actual Industry Effectiveness

Initial Goal Results Best Rating
Practice
Is mass customization as an
approach to internet
branding an effective
strategy for the
organization?
Is the internet an effective
mechanism for facilitating
low-cost global branding?
As an organization that has
not created a brand position
on the internet, is it
necessary to create an
effectively as possible, and
are we achieving this?

ΣER/8=

TM -128
 4. Service Metric Forecast Actual Industry Effectiveness
Initial Goal Results Best Rating
Practice
Are established strategies of
customer service still
applicable and in effect?
Is the effectiveness of
internet service strength
derived from the added
information provision to the
customer on the customer’s
terms?
Is the organization’s internet
customer service effective in
building a significant
affinity relationship?
Does the internet service
strategy provide an effective
low-cost quality service
channel opportunity with a
global reach?
Must an effective e-mail
channel strategy be defined
and planned for in advance,
and did we achieve this?

TM -129
Continued

4. Service Metric Forecast Actual Industry Effectiveness

Initial Goal Results Best Rating
Practice
Must an effective virtual call
center (at the internet site)
be defined well in advance
of its potential implications,
and did we achieve this?

ΣER/6=

TM -130
 5.Market Metric Forecast Actual Industry Effectiveness
Initial Goal Results Best Rating
Practice
Did we develop an effective
internet strategy prior to
developing a web presence?
Did we develop an effective
IT architecture to cope with
and integrate the changes to
the organization caused by
the Web presence?
In order to compete in the
internet space effectively,
was it necessary to align the
internet strategy with the
overall business strategy,
and did we achieve this?
Did our organization
(regardless of product) need
an effective internet
presence that offered value
to the customer (visitor),
and did we achieve this?

TM -131
Continued
5.Market Metric Forecast Actual Industry Effectiveness
Initial Goal Results Best Rating
Practice
Do changes in internet
marketing strategy need to
be avoided to allow the
customer to have effective
and consistent vision of the
organization, and do we
achieve this?
Did we effectively achieve a
coherent internet marketing
strategy that is necessary
across all brands?
To be effective do the
product marketing and
branding strategies need
consistency in the eyes of
the customer, and so do we
achieve this?
To be effective in getting
closer to the customer, does
the internet strategy have to
change over time to meet
the changing demands of the
customer and the market,
and do we achieve this?

TM -132
Continued
5.Market Metric Forecast Actual Industry Effectiveness
Initial Goal Results Best Rating
Practice
Do changes in internet
marketing strategy need to
be avoided to allow the
customer to have effective
and consistent vision of the
organization, and do we
achieve this?
Did we effectively achieve a
coherent internet marketing
strategy that is necessary
across all brands?
To be effective do the
product marketing and
branding strategies need
consistency in the eyes of
the customer, and so do we
achieve this?
To be effective in getting
closer to the customer, does
the internet strategy have to
change over time to meet
the changing demands of the
customer and the market,
and do we achieve this?

TM -133
Continued

5.Market Metric Forecast Actual Industry Effectiveness

Initial Goal Results Best Rating
Practice
As a products-based
company, was the strategy
effective in allowing new
information based products
to be offered through the
low-cost channel?

ΣER/13=

TM -134
 6.Technology Metric Forecast Actual Industry Effectiveness
Initial Goal Results Best Rating
Practice
Did the technology
infrastructure provide a
flexible base to
accommodate market
change?
Were the technology partners
chosen responsive?
Do the front office and back
office systems interface
effectively?
What is the mean time
between failures?
What is the average
bandwidth requirement?
What is the mean time to
upgrade a serve installation?

ΣER/6=

TM -135
 7.Internet Site Metric Forecast Actual Industry Effectiveness
Initial Goal Results Best Rating
Metrics Practice
The number of hits per
month (as a measure of
customers’ interest and site
potential value)?
The number of purchase per
registered customer per
month?
The average purchase size
per transaction?
The length of time a
registered customer spends
(as a measure of site
information value)?
The repeat visit rate by
registered users (as a
measure of site value)

TM -136
Continued

7.Internet Site Metric Forecast Actual Industry Effectiveness

Initial Goal Results Best Rating
Metrics Practice
The purchase/hit rate (as an
indicator of interest
converted to revenue)?
Other (any other metrics you
use for measuring the
effectiveness of your site)
Description:

ΣER/7=

TM -137
 Level I : Senior Strategic Management Group
Owner Value Metric Target Results Projected Effectiven
Criteria Chang ess Rating

CEO Branding Brand Top 100 First 7% 7

equity brand year of
Analysis ranking operatio
n – Rank
164
CIO Security MTBF 100% 99.65% -0.05% 9
coverage
CFO Revenue $ per $15 $7 4% 6
s registered
customer

Level II: Regional Planning Group

Owner Report Value Metric Target Results Projected Effectiveness
criteria change Rating

Director CEO Brand Price 3% 5% 0.8% 8

European consistency variance
Division with
competitors
Director CEO Brand Customer 96% 94% 1.0% 7
North service
American index
Division
Director CEO Brand Market 34% 36% 2% 7
Latin penetration
America
TM -138
 Level III: Country Managers Planning Group
Owner Report Value Baseline Target Results Projected Effectiveness
criteria change Rating

Managing Director Brand Price 3% 6% 1% 7

Director Europe consistency variance
UK
Managing Director Brand Price 3% 4% 0.4% 8
Director Europe consistency variance
Germany
Managing Director Brand Price 3% 3% 0.7% 10
Director Europe consistency variance

Level IV: Marketing-Automation Strategy Group

Owner Report Value Baseline Target Results Projected Effectiveness
criteria change Rating
Director of MD UK Brand Price 85% of 78% 13% 7
Marketing consistency customers
acknowledge
price
consistency
CIO MD UK Brand Price 100% 97% 3% 8
consistency competitors
scanned and
the pricing
updated at
home site
VP MD UK Brand Price 100% data 100% 0% 10
Internet- consistency and
Partner information
relations exchange with
partners
TM -139
Level IV: Marketing-Automation Strategy Group
Owner Report Value Baseline Target Results Projected Effectiveness
criteria change Rating
Director of MD UK Brand Price 85% of 78% 13% 7
Marketing consistency customers
acknowledge
price
consistency
CIO MD UK Brand Price 100% 97% 3% 8
consistency competitors
scanned and
the pricing
updated at
home site
VP MD UK Brand Price 100% data 100% 0% 10
Internet- consistency and
Partner information
relations exchange with
partners

TM -140
Table 9.2 E-value Map - Example
E-value Map:Strategic Perspective
Product
1. Perishable Products
Process Value Criteria Metrics
Baseline Results CSI’
Previous Present Previous Present Previous Present
Cycle Cycle Cycle Cycle Cycle Cycle

1.1. Logistics 97% 97.2% 96% 97% 89 91

on-time
delivery in-
bound
1.2.Logistics 67% 67% 64% 63% 65 67
on-time
delivery to
customer
1.3.Returns 4% 8% 7% 9% NA NA
to
manufacturer
1.4.Out-of- 5% 7% 8% 12% NA NA
stock
requested
items
CSI=customer satisfaction index

TM -141
 The E-value Map
 Ownership Value Map
 Ownership Levels
 Process Value Map
Results are assessed against the forecasts, and the
strategy and systems are modified based on
effectiveness and performance.
However, the correlation between the business
objectives and the metrics by which they are
measured must be carefully assessed.
142 N
 Waves of the Future –
Issues that will Shape the Formulation of
Strategy: Waves of Change

 To create a business model, it is necessary to

learn from the past but to enable future issues
to be debated within their context in a way
that they do not become dated and redundant.
 However, executives and managers
developing their corporate strategy from these
business models must tune them to meet the
needs of their own corporate environments.
Ch. 10
143
 Figure 10.1 The Seven Key Drivers of Change

Government
& Political
Changes
Technology Service
Changes Changes

The Agile
Branding E-commerce
Market
Changes Organization
Changes

Most important factors External

Relationship
Leadership factors
Changes
Technology Most dynamic change agent
144
Future Waves
 1. Develop R&D programs that link pure
and applied research with key elements of
the organization’s structure and strategy.
 2. Harness the power of others’
technologies. Even if it is necessary to pay
a license fee or purchase a package,
immediate access to the technology
outweighs the “build and play” model.
145
Future Waves (continued)

 3. Power comes through consortium

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

146
 Future Waves (continued)

 4. Develop a wireless dimension to your e-

Commerce online strategy. Imagine a customer
anywhere on the planet looking for your product by
wireless device and wishing to complete the
purchase cycle. Could you fulfil the order?
 5. Develop a strategy to interact with the intelligent
agent of users in the future. Identifying sales leads,
negotiating for the sale, and fulfilling the obligation
with less human interaction on the part of the
customer.
147
 Questions executives are facing …
(global, wireless, and mobile)
 the positioning of their advertising on a cell
phone display
 their advertising-based revenue models for
wireless devices
 their collection and payment mechanisms for a
global customer whose only contact point is an
IP address
 how digital product layering will be rolled out
148
 Future Waves (continued)

 6. Develop a multicomponent strategy for the

creation and protection. Focus on brand
leadership, brand stability, and global market
positioning through proactive corporate
policies.
 7. Successful nimble and agile organizations
will rely on speed to market and continuous
innovation rather than protection under the
law.
149 N
 Brand Changes
 Key to managing brand in the future will be the
determination of and management of brand equity -
a financially related value on the customer-based
equity of brand images and associations.
 Four major drivers of brand equity
 Brand name awareness
 Brand loyalty
 Perceived quality
 Brand differentiation

150
Brand Changes (continued)

 While developing branding strategy, the

organization should consider:
 Will the technology divert the organization from our
brand position?
 Will the customer change her perception of our
products if we change our customer relationship
management
 What are the implications of the technology on the
existing traditional brand drivers?

151
 Future Waves (continued)

 8. Change is the only constant but, to keep the

customer-organization constant, the
organization and its use of technology must
change constantly.
 9. An e-consortium will develop to supply the
customer-centric environment with all its
needs, focusing multiple organizations and
their products through one information hub.
152
 Figure 10.2 Internet Service Value Chain
(Service Changes - Evolving to Meet the Changing
Expectations of the Customer)

The Brand
development Reinforcement
and execution
of a successful
strategy in
each of the Customer Customer Customer Customer
Internet service Acquisition Support Fulfillment Continuance
value chain Support
(Prepurchase (During (Purchase
segments is Support) Purchase) Dispatch) (Postpurchase)
vital for any
organization
wishing to
Customer Service Channel
operate all or
part of its
business online The value chain models the development of an organization’s
relationship with a customer over time
N
153
 Future Waves (continued)

 10. The status of agile enterprise is not

necessarily on the evolutionary road for all of
today’s organizations.
 11. Information hubs of a specialist nature
will cut down on the search requirements and
effort needed to locate data as the Web
continues to expand.

154
Figure 10.3 Three Factors Impacting Market Change

Global
Market
Development

Market
Dynamics

Market Market
Hubs Segmentation

N
155
 Future Waves (continued)

 12 Intergovernmental issues on privacy,

access to information, and free trade will
become more important as e-C becomes
increasingly global and lucrative.
 13. The battle for ownership and control over
the virtual intercorporate value chain will
become a new venue for competitiveness.

156
 Future Waves (continued)

 14. International treaties and trade groups

will become less potent as the customer
takes control of markets through the
Internet.

N
157
Future Directions:
Agile and e-Organization Confluence
 The virtual economy will reshape the very nature
of organizations, forcing them to transform
themselves from rigid structure to agile structures.
 The organizations will move from competitive
strategies based on scale of economy to
competition based on low-volume, mass-
customized production and from vertical and
horizontal structures to polymorphic structures
composed of communities of collaborative e-
Commerce.
158
 Commentary on the Road Ahead
 No organization is immune to the contact and
presence of the Internet and the technology that
surrounds it.
 Those organizations that are successful going
forward will be those who manage to balance
their strategy in all of its areas; those
organizations that are very successful will be
those that manage not only to live within the
waves of change but to influence them.
159
THANKS and GO for your e-Era !!

160