Chapter 13

Strategy ..

Strategy
Strategy
A broad based formula for how a business is going to accomplish its mission, what its goal should be, and what plans and policies will be needed to carry out these goals.
What a company should do What a company should not do Decisions around growth in revenue, profit, shareholder value

Strategy
Business Strategy IT Strategy

E Commerce Strategy
Formulation and execution of a vision of how a new or existing company intends to do business electronically. Electronic is largely Internet ..

IT Does not Matter Nicholas G Carr

What will give competitive advantage
Scarcity or Ubiquity of a resource

Disruptive technology creates opportunities briefly for forward looking companies but as the availability increases and cost decreases they become commodity inputs. Steam Power,
Railroad, Electricity, Telephony

Disruptive

Commodity

Internet

Strategy and the Internet

Internet is not necessarily a blessing
Alters industry structure such that
Profitability dampens Leveling effect on business practices Reduces the company to establish a sustainable operational advantage

To stay alive Internet has to be adopted. It is the cost of doing business. Internet per se is not a sustainable competitive advantage.

SUBSTITUTES Threat of Substitutes Increases: 1.Enables new approaches to meet needs 2. Transparency more, so can be copied and innovated

Depends Upon Industry

SUPPLIERS Supplier Power Decreases: 1.Organization can reach out to larger Suppliers and chose Suppliers.

COMPETITION Competition Increases: 1.Reduces differences amongst competitors as offerings are difficult to keep proprietary. 2.Migrates Competition to Price. 3. Geographical Inclusivity leads to competition from anywhere.

BUYERS Buyer Power Increases: 1. Easier Access to Information about Products & Sellers

BARRIERS TO ENTRY Barriers to Entry Decrease: 1.Established Sales Force Not Needed 2.Time to Market Decrease

Cost Leadership

Differentiation

Niche

Strategy
IT Strategy Business Strategy

Strategic Information System Planning : A process for developing a strategy and plans for aligning information systems (including ecommerce applications) with the organizations business strategies

Strategy Planning Process

Strategy Initiation
Organization examines itself & its environment.
Company Analysis & Value Proposition Core Competencies Forecasts Competitor / Industry Analysis

Be a First Mover or a Follower Born on the Net / Move to the Net Determine Scope / What not to do Separate Online Company Separate Online Brand Web 2.0 Strategy

Strategy Planning Process

Strategy Formulation
Development of strategies to exploit opportunities and manage threats in the business environment in light of corporate strengths and weaknesses.
Business Opportunities Cost Benefit Analysis Risk analysis, assessment and management Business Plan

Select EC Opportunities Select EC Application Portfolio Mix

BCG Model (Market Potential, Market Share) Internet Portfolio Map (Company Fit, Project Viability)

Risk Analysis, Security Issues, Handling Channel Conflict Handling Conflicts between Online and Offline Company Pricing Strategy (Cost Plus, Competitor Driven, Value based )

Strategy Planning Process

Strategy Implementation
Development of detailed, short-term plans for carrying out the projects agreed on in strategy formulation.
Project Planning Resource Allocation Project Management

Creation of Web (Project Team) Pilot Project Outsourcing Strategy Virtual Corporation / Partner Strategy /Co-opetition BPR / TQM, BPM

Strategy Planning Process

Strategy Assessment
Continuous evaluation of progress toward the organizations strategic goals, resulting in corrective action and, if necessary, strategy reformulation. Corporate Performance Management (CPM) / Business Performance Management (BPM) Balance Score Card
Financial Non Financial (Customer, Internal Business Growth, Learning & Growth)

Strategy Maps Web Analytics

Global E Commerce
Barriers
Cultural Issues Language Issues Legal Issues Taxation Issues Standards ..
SMBs Finding it particularly lucrative to get into E Commerce Space