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Strategic Planning for EC. The strategic Planning Cycle Industry & Competitive Analysis Strategy Formulation Implementation Performance Assessment, Strategy reassessment. Industry & Competitive Analysis Monitor, evaluate and disseminate information from external and internal environments

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Strategic Planning for EC

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Strategic Planning for EC


The strategic Planning Cycle

  • Industry & Competitive Analysis

  • Strategy Formulation

  • Implementation

  • Performance Assessment, Strategy reassessment


Industry & Competitive Analysis

  • Monitor, evaluate and disseminate information from external and internal environments

  • Identify critical factors that will determine success

  • SWOT analysis MATRIX


Strategy Formulation

  • Examine\Redefine the corporate mission Develop strategies

  • Set Implementation Guidelines


Examine\Redefine the corporate mission

  • by specifying achievable objectives

    • measurable

    • what does the company intend to achieve?


Develop strategies

  • Must be clear and not superficial

  • People, organisation, processes and technology


Develop strategies (cont)

  • A value chain approach

  • Relationship Marketing

  • ROI & Risk Analysis

  • Critical Success Factors

  • Four EC Scenarios

  • Competitive v’s Cooperative

  • Competitive Intelligence on the Internet


A value chain approach

  • Clarify Value Chain Statements

  • Create New Values


Clarify Value Chain Statements

  • Can I realise significant margins by consolidating parts of the value chain?

  • Can I create significant value for customers by reducing the number of entities they have to deal with in the value chain?

  • What additional skills do I need to develop in order to take over the functions of others in my value chain?

  • Will I be at a a competitive disadvantage if someone else moves first to consolidate the value chain?


Create New Values

  • Can I offer additional information regarding transaction services to my existing customer base?

  • Can I address the needs of new customer segments by repackaging my current information assets or by creating new business propositions using the Internet?

  • Will my current business be significantly harmed by other businesses providing some of the value that I currently offer?

  • Will my current business be significantly hared by other companies providing some of the value I currently offer on an a la carte basis?


Relationship Marketing

  • Differentiation by superior service at the point of contact with the customer

    • customer acquisition

    • customer retention

    • customer extension

    • customer selection


ROI & Risk Analysis

  • ROI = ratio of cost of resources required to the benefits generated

  • Includes both quantifiable and non-quantifiable items

  • Non-quantifiable items

    • effective marketing channel

    • increased sales

    • increased customer service

    • competitive advantage

    • organisational design

    • organisational learning


ROI & Risk Analysis (Cont)

  • Risks

    • technological

    • inherent in business reorganisation

    • demographic changes


Critical Success Factors

  • Top Management support

  • cross functional teams

  • technical infrastructure

  • customer acceptance

  • user friendly web interface

  • Integration with legacy systems


Critical Success Factors (cont.)

  • security and control of the EC system

  • pilot project

  • corporate knowledge

  • promotion and internal communication

  • cost

  • level of trust between buyers and sellers


Critical Success Factors (cont.)

  • Specific product or services traded

    • Does the business have a product that is a good candidate for EC?

    • Can the business develop new products for EC?

    • How can I use the information I have about individual customers to make it easier for them to do business with me?


Critical Success Factors (cont.)

  • Specific product or services traded (cont.)

    • What help can I give customers by using the experience of other customers or the expertise of my employees?

    • Will I be at a significant disadvantage if my competitors provide these capabilities to customers before I do?


Four EC Scenarios

  • Open Global Commerce Scenario

  • Members Only Subnets Scenario

  • Electronic Middlemen Scenario

  • New Consumer Marketing Channels Scenario


Competitive v’s Cooperative

  • A competitive strategy assumes fighting against all competitors for the purpose of survival and to win

  • A cooperative strategy plans for working together with specific competitors to gain advantage against other competitors.


Competitive Strategies

  • Frontal assault

    • attacks competitor in all areas

    • the attacker must have superior resources and a willingness to persevere

  • Flanking manoeuvre

    • attacks where the competitor is weak

    • attacker must be patient and willing to carefully expand


Competitive Strategies (cont.)

  • Raise structural barriers

    • full product lines

    • switching costs

    • low entry costs

  • Lower the inducement for attack

    • lower the expectation of profits by attackers


Cooperative strategies

  • Joint venture

    • pooling of resources

    • new, separate entity formed

    • involves loss of control

  • Value chain partnership


Steps to maximise success

  • Education and Training

  • Review Current Distribution and Supply Chain Models

  • Understand What Your Customers and Partners Expect From the Web

  • Re-evaluate the Nature of Your Products and Services

  • Give A New Role to Your Human Resources Department

    • Cross Functional Job Descriptions

    • Establish Corporate Intranet \ Internet Policies


Steps to maximise success (cont.)

  • Extend Your Current Systems to the Outside

  • Track New Competitors and Market Shares

  • Develop A Web-centric Marketing Strategy

  • Participate in the Creation and Development of Virtual Market Places

  • Instil EC Management Style

  • Constant environmental scanning


Competitive Intelligence on the Internet

  • Review Competitors Web Sites

  • Analyse Related News Groups

  • Examine Publicly Available Financial Documents

  • Corporate Research Companies

  • Solicit Opinions in Chat Rooms

  • Interactive Customer Questionnaires

  • Avoid Over Reliance

  • Push V’s Pull Information Technology


Set Implementation Guidelines

  • Pilot Project

  • Uncover Specific EC Opportunities and Applications

  • Create Web Team

  • Evaluate Outsourcing

  • Web site design

  • Assessment


Uncover Specific EC Opportunities

  • Brainstorming

  • Consultants

  • Vendors

  • Review Competitors

  • Literature


Create Web Team

  • Transformational Leadership

  • Define Roles

  • Assign Functional Skills to Subprojects

  • Cross Functional Staffing

  • Documentation


Evaluate Outsourcing

  • Cost

  • Expertise

  • Benchmarking against vendors other clients

  • Loss of control

  • Core competencies


Assessment

  • Measure

  • Collect information

  • Re-evaluate

  • Recommence planning cycle


Collect information

  • Staff

  • Customers

  • Suppliers


Re-evaluate

  • Did it deliver what it was supposed to

  • Is it still viable in an ever changing environment

  • Reassess initial strategy to learn from mistakes and strengthen advantages

  • Identify failing projects ASAP and determine reasons for failure

  • Identify control and administrative issues


Change Management


Need for Change Management

  • Environment is always changing

  • Change is Natural

  • 70% of IT projects fail


Change does not occur in isolation

Task

Technology

People

Structure


Stages of Change

  • Unfreeze Present Behaviour

    • Creating motivation and readiness for change

  • Change the organisational system

    • Enabling people to see things differently and react differently in the future

  • Re-freeze

    • Ensuring that the new behaviour will be secure against reversion


The Managing Change Model (Siegal)

Evaluating Change

Managing the people side of change

Managing the organisation side of change

Planning change

Individual response to change

General nature of change


Critical Success Factors

  • Executive Support

  • Transformational Leadership

    • Communicating the Vision

    • Inspiring

  • Sound Implementation Strategy

  • Transition Management Team

    • Moral authority

    • Legal authority


Critical Success Factors (cont.)

  • Trust

  • Communication

  • Recognise Resistance

  • Normal

    • Understand sources and motives

    • May derive benefits from the dysfunction

    • Maintain personal homeostasis

    • Reflects poorly upon past performance


Critical Success Factors (cont.)

  • Ownership

  • Empowerment

  • Monitoring

  • Feedback


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