OHT 5.

E-business Strategy

Marketing Insights Limited 2004

OHT 5.2

Learning objectives
Follow an appropriate strategy process model
for e-business;
Apply tools to generate and select e-business
strategies;
Outline alternative strategic approaches to
achieve e-business.

Marketing Insights Limited 2004

OHT 5.3

Issues for managers

How does e-business strategy differ from
traditional business strategy?
How should we integrate e-business strategy
with existing business and IS strategy?
How should we evaluate our investment
priorities and returns from e-business?

Marketing Insights Limited 2004

OHT 5.4

How does e-business strategy differ from

traditional business strategy?

In the one-to-many hierarchical information flow that

characterized the Industrial Age, information flowed
one way, from the producer to the consumers. The
Internet has changed this in three important ways.
the Internet allows consumers to talk to consumers
consumers can find and access information much
easier than before
enables the information flow to be reversed so
customer-centric companies can pull information from
consumers to improve and customize products
Marketing Insights Limited 2004

OHT 5.5

Michael Porter on the Internet

The key question is not whether to deploy
Internet technology companies have no
choice if they want to stay competitive but
how to deploy it.

Porter, M. (2001) Strategy and the Internet,

Harvard Business Review, March 2001, 6278.
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OHT 5.6

Different forms of organizational strategy

Figure 5.1 Different forms of organizational strategy

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OHT 5.7
Corporate
Strategy What business should you
be in? Looks at the whole range of business
opportunities
Business Strategy Battle plans, tactics used to
fight the competition in the industry that your
company currently participates in (see Competitive
Strategies and Competitive War Games)
Functional Strategy Operational methods and
value adding activities that you choose for your
business (venture strategies, technology
strategies, diversification strategies, marketing
strategies, differentiation strategies, etc.)

Marketing Insights Limited 2004

OHT 5.8

Relationship between e-business

strategy and other strategies

Figure 5.2 Relationship between e-business strategy and other strategies

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OHT 5.9

A generic strategy process

model

Figure 5.3 A generic strategy process model

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OHT 5.10

Dynamic e-business strategy

model

Figure 5.4 Dynamic e-business strategy model

Source: Adapted from description in Kalakota and Robinson (2000)

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OHT 5.11

Elements of strategic situation

analysis for the e-business

Figure 5.5 Elements of strategic situation analysis for the e-business

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OHT 5.12

What happens where there is

no e-business strategy?

Missed opportunities for additional sales on

the sell-side and more efficient purchasing on
the buy-side
Fall behind competitors in delivering online
services may become difficult to catch up,
e.g. Tesco, Dell
Poor customer experience from poorly
integrated channels
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OHT 5.13

Adoption steps of e-business

services

Figure 5.6 Adoption steps of e-business services

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OHT 5.14

Summary applications portfolio

analysis for the B2B Company

Figure 5.7 Summary applications portfolio analysis for The B2B Company
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OHT 5.15

SWOT analysis for the B2B

company

Figure 5.8 SWOT analysis for The B2B Company

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OHT 5.16

Customer demand for e-marketing

services for The B2B Company

Figure 5.9 Customer demand for e-marketing services for The B2B Company
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OHT 5.17

Competitive threats acting on

the e-business

Figure 5.10 Competitive threats acting on the e-business

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OHT 5.18

Porters five forces

Bargaining
powers of
customers

Power of
suppliers

Threat
of of
Threat
subsitutes
substitutes

The business

Extent of rivalry
between
competitors

Threat of new
entrants
Marketing Insights Limited 2004

OHT 5.19

Activity Impact of Internet

For one of the industries below, assess how
the Internet has changed the competitive
forces, e.g. has it increased or decreased
power of suppliers and customers?
Industries:
Banking
Supermarkets
Oil industry
Rail industry
Marketing Insights Limited 2004

OHT 5.20

Elements of strategic objective

setting for the e-business

Figure 5.11 Elements of strategic objective setting for the e-business

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OHT 5.21

Direct and indirect Internet

contributions for fast growth companies in the US

Figure 5.12 Direct and indirect Internet contributions for fast-growth companies
in the USA
Source: PricewaterhouseCoopers (2000)

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OHT 5.22

Grid of product suitability against

market adoption for transactional
e-commerce (online purchases)

Figure 5.13 Grid of product suitability against market adoption for transactional
e-commerce (online purchases)
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OHT 5.23

Elements of strategy definition for

the e-business

Figure 5.14 Elements of strategy definition for the e-business

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OHT 5.24

Strategic options for a company in

relation to the importance of the
Internet as a channel

Figure 5.15 Strategic options for a company in relation to the importance of the
Internet as a channel
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Assessment of risk for market and

product development for the B2B company

OHT 5.25

Figure 5.16 Assessment of risk for market and product development for The
B2B Company
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OHT 5.26

New product development Smile online banking

(www.smile.co.uk)

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OHT 5.27

Dabs.com (www.dabs.com)

Figure 5.18 Dabs.com (www.dabs.com)

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OHT 5.28

Elements of strategy
implementation for the e-business

Figure 5.19 Elements of strategy implementation for the e-business

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