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Strategic Planning for EC - PowerPoint PPT Presentation

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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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The strategic Planning Cycle

  • Industry & Competitive Analysis

  • Strategy Formulation

  • Implementation

  • Performance Assessment, Strategy reassessment

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Industry & Competitive Analysis

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

  • Identify critical factors that will determine success

  • SWOT analysis MATRIX

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Strategy Formulation

  • Examine\Redefine the corporate mission Develop strategies

  • Set Implementation Guidelines

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Examine\Redefine the corporate mission

  • by specifying achievable objectives

    • measurable

    • what does the company intend to achieve?

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Develop strategies

  • Must be clear and not superficial

  • People, organisation, processes and technology

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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

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A value chain approach

  • Clarify Value Chain Statements

  • Create New Values

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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?

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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?

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Relationship Marketing

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

    • customer acquisition

    • customer retention

    • customer extension

    • customer selection

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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

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ROI & Risk Analysis (Cont)

  • Risks

    • technological

    • inherent in business reorganisation

    • demographic changes

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Critical Success Factors

  • Top Management support

  • cross functional teams

  • technical infrastructure

  • customer acceptance

  • user friendly web interface

  • Integration with legacy systems

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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

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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?

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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?

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Four EC Scenarios

  • Open Global Commerce Scenario

  • Members Only Subnets Scenario

  • Electronic Middlemen Scenario

  • New Consumer Marketing Channels Scenario

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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.

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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

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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

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Cooperative strategies

  • Joint venture

    • pooling of resources

    • new, separate entity formed

    • involves loss of control

  • Value chain partnership

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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

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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

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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

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Set Implementation Guidelines

  • Pilot Project

  • Uncover Specific EC Opportunities and Applications

  • Create Web Team

  • Evaluate Outsourcing

  • Web site design

  • Assessment

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Uncover Specific EC Opportunities

  • Brainstorming

  • Consultants

  • Vendors

  • Review Competitors

  • Literature

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Create Web Team

  • Transformational Leadership

  • Define Roles

  • Assign Functional Skills to Subprojects

  • Cross Functional Staffing

  • Documentation

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Evaluate Outsourcing

  • Cost

  • Expertise

  • Benchmarking against vendors other clients

  • Loss of control

  • Core competencies

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  • Measure

  • Collect information

  • Re-evaluate

  • Recommence planning cycle

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Collect information

  • Staff

  • Customers

  • Suppliers

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  • 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

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Need for Change Management

  • Environment is always changing

  • Change is Natural

  • 70% of IT projects fail

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Change does not occur in isolation





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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

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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

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Critical Success Factors

  • Executive Support

  • Transformational Leadership

    • Communicating the Vision

    • Inspiring

  • Sound Implementation Strategy

  • Transition Management Team

    • Moral authority

    • Legal authority

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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

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Critical Success Factors (cont.)

  • Ownership

  • Empowerment

  • Monitoring

  • Feedback