CHAPTER 5

CELINE KHO 1941001

JOCELRYN 1941004
LILIS CRIESTINA 1941025
ANGELA 1941036
VALERIE TANATA 1941038

DIGITAL BUSINESS STRATEGY

 What is digital business strategy?
What is strategy?   
Defines how we will meet our objectives, sets allocation of resources to meet goals, selects
preferred strategic option to compete within a market, provides a long-term plan for the
development of the organisation.

Digital business strategies share much in common with corporate, business and marketing
strategies. These quotes summarising the essence of strategy could equally apply to each strategy:
۞ Is based on current performance in the marketplace.
۞ Defines how we will meet our objectives.
۞ Sets allocation of resources to meet goals.
۞ Selects preferred strategic options to compete within a market.
۞ Provides a long-term plan for the development of the organisation.
۞ Identifies competitive advantage through developing an appropriate positioning relative to competitors
defining a value proposition delivered to customer segments.
What happens when digital business strategy is not clearly defined?

01 Missed opportunities from lack of evaluation of opportunities or insufficient resourcing of digital

business initiatives.

02 Inappropriate direction of digital business strategy

03 Limited integration of digital business at a technical level, resulting in silos of information in

different systems.

04 Resource wastage through duplication of digital business development in different functions and
limited sharing of best practice.
 DIGITAL
CHANNEL
Examples:
STRATEGIES
 Mobile commerce strategy
 Social media strategy
 Social CRM strategy
 Supply chain or ERP strategy

Digital channel strategies also need to define how electronic

channels are used in conjunction with other channels as part
of a multichannel digital business strategy.
Digital Channel
Strategies

Our e-commerce strategy defines how we should hit our channel leads and sales targets:
۞ Communicate the benefits of using e-channels
۞ Prioritise audiences or partners targeted for e-channel adoption
۞ Prioritise products sold or purchased through e-channels
۞ Achieve our e-channel targets.
 Strategic
Analysis
Strategic analysis or situation analysis involves review of  
The internal resources and processes of the company to assess
its digital business capabilities and results to date in the
context of a review of its activity in the marketplace.
 “Research shows that many companies still have limited digital business
capabilities and are at an early stage in the model. For existing companies the stages
are:
۞ Image and product information
۞ Information collection
۞ Customer support and service
۞ Internal support and service
۞ Transactions
Considering sell-side e commerce, there are six options :
Level 0. No website or presence on web. 
Level 1. Basic web presence.
Level 2. Simple static informational website.
Level 3. Simple interactive site
Level 4. Interactive site supporting transactions with users.
Level 5. Fully interactive site supporting the whole buying
process.
SWOT Analysis
 Competitive threats
۞ Threat of new e‑commerce entrants

01 ۞ Threat of new digital products

Assessing ۞ Threat of new business models

competitive Sell-side threats

threats 02 ۞ Customer power and knowledge 
۞ Power of intermediaries
Strategic
Objectives
۞ The strategy definition and implementation elements of strategy
must be directed at how best to achieve the objectives
۞ The overall success will be assessed by comparing actual results
against objectives and taking action to improve strategy
۞ Clear, realistic objectives help communicate the goals and
significance of a digital business initiative to employees and partners
 Defining vision & mission
Vision or mission statement for digital
businesses are a summary of the scope and
broad aims of an organisation in the future.
 Example vision or mission statements
Amazon.com
01 Our vision is to be earth’s most customer-­centric company, to build a place where people can
come to find and discover anything they might want to buy online.

Dell 
02 Listens to customers and delivers innovative technology and services they trust and value.

Facebook 
03 A social utility that helps people communicate more efficiently with their friends, family and
co‑workers.

04 Google 
Google’s mission is to organise the world’s information and make it universally accessible and useful.
Scenario-based
analysis
A useful approach to discussing alternative visions of the future prior to objective setting. 

  How can digital business create business value?

۞ Adding Value
۞ Reduce Costs
۞ Manage Risks
۞ Create New Reality
Objective setting
Efficiency
Minimising resources or time needed to complete a process:
‘doing the thing right’
Effectiveness
Meeting process objectives, delivering the required outputs and outcomes:
‘doing the right thing’
Setting SMART objectives
Time-related
Specific

Relevant
Measurable

Actionable
Online or Internet revenue contribution (ORC)
An assessment of the direct or indirect contribution of the Internet to
sales, usually expressed as a percentage of overall sales revenue.

Conversion modelling for sell-side e‑commerce

 Conversion marketing
 E‑channel service contribution
 
Balanced Scorecard
A framework for setting and monitoring business performance. Metrics are structured
according to customer issues, internal efficiency measures, financial measures and
innovation.

The main areas of the balanced scorecard are :

⬥ Customer concerns
⬥ Internal measures
⬥ Financial measures
⬥ Learning and growth
 Strategy
Definition
As strategy is formulated based on vision and
objectives, it is necessary to frequently revisit
and revive them in a company, a manager will
want to generate different kind of opinion,
review them, and select them, which makes this
steps of strategy making very important.
1 Decisions Business Channel Priorities
Decisions have to be taken about which combination of platforms has the highest
level of consumer usage and will give the best commercial rewards.

Key prioritisation :
◆ Investment and support for desktop vs mobile platform
◆ Within mobile platform, the platform supported that supported mobile devices must be
considered, e.g : IOS Smartphone and Android
◆ Investment in social media platform, i.e Facebook vs Instagram vs Pinterest vs Tiktok
 Market Product

2 Market and 1 Penetration 3 development 

۞ Market share growth

Product ۞ Customer loyalty

improvement
۞ Customer value
4 Diversification 
Development improvement
۞ Diversification into related business
Market ۞ Diversification into unrelated business

Strategies 2 development
 3
Product Performance Exellence
review and product information

Price Performance Exellence

offer competitive price Positioning
Transactional Exellence and
offer transactional exellence
Differentiation
Relationship Exellence
creation of an exceptional brand experience
Strategies
Business,
4 Evaluating new models and approaches is important since if

Service &
companies do not review opportunities to innovate their services
then competitors and new entrants certainly will.

Revenue Models
Example :
Companies can gain commisions through selling products but not competitive on their
own, i.e a publisher can sell books through an arrangement with an e-retailer
Market structure to be created through :
۞ Disintermediation
۞ Reintermediation
۞ Countermediation

 Marketplace
5
Restructuring
6 Supply Chain Management Capabilities
Main digital strategy that need to be reviewed:

. How should we integrate more closely with our suppliers?

. Which type of materials and interactions with suppliers should we support through e-procurement?

. Can we participate in online marketplaces to reduce cost?

 Internal Knowledge
Management Capabilities

7 Review internal digital business capabilities 

۞ How can our intranet be extended to support business process such

 
as new product development?
۞ How can we disseminate and promote sharing of knowledge
between employees to improve competitiveness?
 8 Organisational
Resourcing &
۞ Strategy Process and Performance Improvement
Capabilities
۞ Structure
۞ Senior Management buy-in
۞ Marketing Integration
۞ Online Marketing Focus
۞ Partnering with Other Organisations
 Failed digital business strategies ? 
۞ Timing errors

STRATEGY ۞ Lack of creativity

۞ Offering free services

IMPLEMENTATION ۞ Over ambitions

۞ Situation analysis

  ۞ Objective setting
۞ Strategy definition
۞ implementation
Success factors for digital business strategy implementations : 

Content Brand image

Convenience Commitment
Control Price sensitivity Partnership
Interaction Process improvement
Community Integration
 ALIGNING AND
IMPACTING DIGITAL
BUSINESS
STRATEGIES
An essential part of any digital business
Willcocks and Plant (2000)
strategy is consideration of how information - the leading companies were

systems strategy supports change. An essential astute at distinguishing the contributions of information and

part of any digital business strategy is technology, and considering them separately. 

consideration of how information systems

Competitive advantage comes not from technology, but from
strategy supports change.
how information is collected stored, analysed and applied.
Sultan & Rohm
(2004)
based on a study of three organizations, there are different forms indentified from aligning
Internet strategies with business goals, with their framework identifying these strategic objectives:
۞ Cost reduction and value chain efficiencies
۞ Revenue generation
۞ Channel partnership
۞ Communications and branding
During initial development of an digital business strategy, a business-alignment approach
can be applied to ensure that IS strategy supports digital business strategy.

Elements of IS strategy
Ward and Griffiths (1996)
suggest that an IS strategy plan contains three elements:
⬥ Business information strategy. 
⬥ IS functionality strategy. 
⬥ IS/IT strategy.
Decisions about which business applications to invest in:

01  Operational value investment 01

02  Strategic value investment

03 Threshold investment

04 Infrastructure investment
THANK
S Do you have any questions?

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