Chapter 11E-Business Strategy

1、For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 1Chapter 11: E-Business StrategyFor use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 2L

2、EARNING OBJECTIVES(1): Outline the steps involved in strategy development. List the major drivers of e-business strategy and their impact. Explain the importance of an e-business value chain. Describe the process of business model evaluation. Discuss how alliances and acquisitions relate to strategy

3、 development. Identify the major strategies e-businesses are using to differentiate themselves.For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 3LEARNING OBJECTIVES(2): List the advantages that a pioneering firm can

4、gain. Explain the importance of brand names for e-businesses. Describe the strategic role of portals. Identify the alternative competitive arenas where e-businesses can find opportunities. Describe the measures that businesses can use to judge e-business success.For use with Strategic Electronic Mar

5、keting: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 4Vignette: Microsoft vs. The World (1) Thinking Strategically Determine the environmental factors influencing Microsoft. What are Microsofts strengths and weaknesses. Decide which of Microsofts strengths

6、allow it to gain an advantage over its competitors. List environmental threats that Microsoft faces currently and could face in the future. For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 5Microsofts Internet Strate

7、gic Actions: Purchases/License/Alliances 1994 License Spyglass browsertechnology. 1995 MS invests UUNet. 1995 AOL. 1996 Purchase VermeerTechnology. 1996 Purchase Colusa Software Inc. 1996 Purchases eShop, Inc. 1996 Purchases Electric Gravity,Inc. 1996 Sun Microsystems License. 1996 AT&T, Netcom,

8、MCI, CompuServealliances. 1997 Invests inRealnetworks. 1997 Purchases HotMailfor $400 million. 1997 Purchases WebTV for$425 million. 1999 Invests in Nextel. 1999 Invests in AT&T.For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingCha

9、pter 11 Slide: 6Vignette: Microsoft vs. The World (3) Thinking Strategically What steps could Microsoft could take to lower those threats. Speculate on the future opportunities that Microsoft may have. List the different competitive arenas in which Microsoft is competing. What steps Microsoft would

10、need to take to take to pursue those opportunities. Recommend a strategy that a company could use to compete in the same markets as Microsoft.For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 7What Is Strategy A strat

11、egy consists of a pattern of decisions that set the goals and objectives that lead to long run competitive advantages for a firm. Undertake a SWOT analysis. Determining distinctive competencies. Determining the competitive arena. Develop a plan to reach the business goals. For use with Strategic Ele

12、ctronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 8Definitions: A value chain is a way of envisioning the collection of activities that a business undertakes to design, produce, market, deliver, and support products or services. The Competitiv

13、e Arena is the competitive environment in which a business competes. Distinctive Competencies are unique areas of advantage where a firm can differentiate itself from competitors.For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapte

14、r 11 Slide: 9Steps for Strategy Development (1) Undertake a SWOT analysis. Evaluate the Strengths, Weaknesses, Opportunities, and Threats facing a business. Determining distinctive competencies. Analyze a businesss value chain to help identify internal strengths and weaknesses that can help determin

15、e how a business can compete. For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 10Steps for Strategy Development (2) Determining the competitive arena. Determine the competitive environment in which a business compete

16、s Helps set the mission Indicates the windows of opportunity to be pursued Identifies the competitive environment. Develop a plan to reach the business goals. Outline the strategic actions and tactics a business must undertake to move from where and how it currently competes to where and how it need

17、s to compete given its distinctive competencies.For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 11Figure 11.1: Model of Strategy DevelopmentValue Chain(Strengths & Weaknesses)Window of OpportunityStrategyCompeti

18、tive ThreatsStrategic DriversEnvironmental ForcesFor use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 12Table 11.1: Drivers of Environmental TurbulenceEnvironmentalDriversDescriptionTechnologicalchangeMoores law more pow

19、er and lower costs is allowing technology tobe applied across a broader spectrum of products and uses.ChangingcustomersCustomers around the globe accepting Internet use and on-linepurchasing. Individuals are facing time compression and technologyis being used as an enabler to accomplish more. Custom

20、ers haveincreased power due.Shorterproduct lifecyclesProduct life cycles are growing shorter due to the rapid developmentof new technology, aggressive marketing, and a willingness of buyersto try new products.Number ofcompetitorsDistance between competitors is vanishing. causing an increase in thein

21、tensity of competition.Need for speed Instant connectivity is becoming the norm in business-to-businessapplications as well as in the way that consumers shop.For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 13E-Busin

22、ess Value Chain (1)E-business value chains view information technology as part of a business overall value chain adding to the competitive advantages of a businessCompetitive Advantage Through Stronger Customer RelationshipsMarketing/SalesE-commerce: Lower costs, new market entry.E-business Promotio

23、nManagement Leadership: ManagementIntranets: Lower costs, better communication.Innovativeness: Speed, flexibility, new product ideasValue ProductionDifferential Advantages CustomizationDynamic Pricing Customer Targeting & SupportDatabasesCRMDistributionInbound LogisticsExtranets: Lowers costs in

24、crease speedE-Business Communication PlatformsE-Business Technological InfrastructureFor use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 14Marketing/SalesE-commerce: Lower costs, eases new market entry.Provides e-busine

25、ss promotion.E-Business Value Chain (2)Value ProductionERP Software Differential Advantages, Customization,Dynamic Pricing. Inbound LogisticsExtranets: Lowers costs increase speedCompetitive Advantage Through Stronger Customer RelationshipsManagement Leadership: ManagementIntranets: Lower costs, bet

26、ter communication.Innovativeness: Speed, flexibility, new product ideas.Customer Targeting & SupportDatabases andCRM. Internet: Lower costs, speeds service.Marketing/SalesE-commerce: Lower costs, new market entry.E-business Promotion.Value ProductionDifferential Advantages, Customization,Dynamic

27、 Pricing. DistributionInbound LogisticsExtranets: ERP, Lowers costs increase speed.For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 15Competitive Advantage Through Stronger Customer RelationshipsE-Business Value Chai

28、n (2)Customer Targeting and SupportDatabases: Enable better CRM.Internet: Lower costs, speeds service.Management: IT leadership: Encourages innovativeness, speed, flexibility, new product ideas.Intranets: Lower costs, improve communication.Competitive Advantage Through Stronger Customer Relationship

29、sManagement Leadership: ManagementIntranets: Lower costs, better communication.Innovativeness: Speed, flexibility, new product ideas.Customer Targeting & SupportDatabases andCRM. Internet: Lower costs, speeds service.Marketing/SalesE-commerce: Lower costs, new market entry.E-business Promotion.V

30、alue ProductionDifferential Advantages, Customization,Dynamic Pricing. DistributionInbound LogisticsExtranets: ERP, Lowers costs increase speed.For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 16Marketing/SalesE-comm

31、erce: Cellular linked vending machines.Databases: Used with decision support systems. Can determine the effectiveness of marketing efforts.Figure 11.3: Coca-Cola E-Business Value Chain(1)Value ProductionERP Software: Links Coke with its bottling partners. Provides interconnected management system.In

32、bound LogisticsExtranets: Links Coke with bottling partners and suppliers.Competitive Advantage Through Stronger Customer RelationshipsManagement Leadership: ManagementIntranets: Lower costs, better communication.Innovativeness: Speed, flexibility, new product ideas.Customer Targeting & SupportD

33、atabases andCRM. Internet: Lower costs, speeds service.Marketing/SalesE-commerce: Lower costs, new market entry.E-business Promotion.Value ProductionDifferential Advantages, Customization,Dynamic Pricing. DistributionInbound LogisticsExtranets: ERP, Lowers costs increase speed.For use with Strategic

34、 Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 17Competitive Advantage Through Stronger Customer RelationshipsFigure 11.3: Coca-Cola E-Business Value Chain(2)Customer SupportInternet: Provide more timely delivery to trade customers.Mana

35、gement Leadership: Intranets: Management willing to change and sell ideas.Intranets: Worldwide systems improves communication.Innovativeness: New approach in the soft-drink industry.Competitive Advantage Through Stronger Customer RelationshipsManagement Leadership: ManagementIntranets: Lower costs,

36、better communication.Innovativeness: Speed, flexibility, new product ideas.Customer Targeting & SupportDatabases andCRM. Internet: Lower costs, speeds service.Marketing/SalesE-commerce: Lower costs, new market entry.E-business Promotion.Value ProductionDifferential Advantages, Customization,Dyna

37、mic Pricing. DistributionInbound LogisticsExtranets: ERP, Lowers costs increase speed.For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 18Business Models A business model, or commerce model, is the basic process flow

38、indicating how a business operates. Business process modeling is a systematic approach to viewing organizations and the complex relationships that are required to make the business operate. For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College Publi

39、shingChapter 11 Slide: 19Analyzing Business ModelsFour perspectives: Functional perspectives: identifies the functions within a business an how they interact.Behavioral perspective: identifies when and how functions are performed in a business.Organizational perspectives: identifies where and by who

40、m functions are undertaken.Informational perspectives: identifies what types of information are identified and how do they flow.For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 20Figure 11.4: Generic Business ModelFo

41、r use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 21Figure 11.5: Generic E-Business ModelFor use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slid

42、e: 22Developing E-Business ModelsRequires a process of identifying the functional process flows of a business and then modeling how the application of e-business procedures can result in competitive advantage. This requires a six-step process:1. Identify the functional areas and major player.2. Indi

43、cate how these area are linked and the directions of the flow process.3. Determine what e-business tools and techniques can be applied to the business model.4. Develop a new e-business model flow.5. Evaluate the competitive advantages of the model by using a value chain analysis.6. Determine the lik

44、elihood of acceptance of the new model.For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 23Figure 11.6: The Traditional Higher Education Model For use with Strategic Electronic Marketing: Managing E-Business 2e Copyri

45、ght 2003 South-Western College PublishingChapter 11 Slide: 24Figure 11.7: The E-Learning Higher Education Model For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 25Figure 11.8: Pre 1998 Computers Sales Functional Busi

46、ness ModelInventory levels ordered based on sales projections.Increased inventory costs as inventory waits in storage.Personal sales backed by national and local advertisingIncreases sales costs.Payments are made through cash, check, credit card or invoice.Product delivered through shippers to retai

47、l outlet.Product sits in retail outlet waiting to be sold and losing value.Customer has immediate possession of product, and can possibly return product and receive support. Manufacturer produces product to fit retail orders. For use with Strategic Electronic Marketing: Managing E-Business 2e Copyri

48、ght 2003 South-Western College PublishingChapter 11 Slide: 26Dells Business Model Suppliers linked through Extranet deliver just-in-time.Lowers inventory costs.Web page provides information and ordering.Lowers ordering costs.Payments are made online through Web page credit card or invoice.Lowers bad

49、 debt expense and credit risks.Product delivered through independent shippers such as UPS.Contract low shipping rates, no fixed costs in assets.Customer gathers information and purchases through Web page.Lowers communication costs.Dell manufactures customized PC and sells at low price.For use with S

50、trategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 27E-BUSINESS STRATEGY Low cost and therefore low price competitor. A frictionless Internet market implies that customers have almost perfect information and can compare prices aroun

51、d the world (by using intelligence agents to search out the best prices enhances this process). Differentiation strategy by finding a unique market position against competitors. For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter

52、 11 Slide: 28Table 11.2: Methods of DifferentiationDifferentiationStrategyAdvantagesDisadvantagesGain Speed &First MoverAdvantagesThis provides anumber of first moveradvantages includingcosts, meeting needs,lowering risk, andlower prices.Firms need to beflexible to be fast.Being first increasesr

53、isks and may requirelarge amounts of capitalto maintain advantages.Build BrandNameGives buyersassurance wheninteracting with a site.Allows for easy namerecognition.Requires a largeamount of capital toobtain and maintain abrand name.For use with Strategic Electronic Marketing: Managing E-Business 2e

54、Copyright 2003 South-Western College PublishingChapter 11 Slide: 29Table 11.2: Methods of DifferentiationDifferentiationStrategyAdvantagesDisadvantagesPortalDevelopmentAllows for economies ofscale and builds barriers toentry.Requires large amount ofcapital, pushing offprofitability.Pursue NicheStrat

55、egiesVery good strategy forsmaller or weakerbusinesses. Allows abusiness to focus andbecome an expert in onecompetitive arena.Having only one niche canbe risky because all of theeggs could be in onebasket or with onecustomer.EnhancedCustomerRelationshipsAllows businesses to buildbarrier to entry. By

56、 stayingclose to customers businesscan meet needs better.Could result in a loss ofpower by the businesssupplying the product orservice.For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 30Speed and First Mover Advantag

57、es A pioneering firm has differentiated itself from competition because it is the first to enter a competitive arena or it is able help define the competitive arena. Advantages: Lower Costs Meeting Current Needs Lower Consumer Risk Perception Charge Higher PricesFor use with Strategic Electronic Mar

58、keting: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter 11 Slide: 31Costs Advantages May increase the business or products time in a life cycle, spreading development costs over time and the number of products produced. Firms that follow have less time in the life cycle

59、 to recover all costs An early entry firm can gain cost advantages through experience curves and when greater market shares are obtained they obtain greater economies of scale. For use with Strategic Electronic Marketing: Managing E-Business 2e Copyright 2003 South-Western College PublishingChapter

60、11 Slide: 32Meeting Current Needs The faster a business can respond to the market, the more likely that information from areas such as marketing research will be valid resulting in actions that could lead to higher market share. First, movers have been shown to have a substantially higher market share than later entrants. A produc