E-Commerce Strategy and Global EC

1. Chapter 14 • Presented By: • Samar El-Haddad • MennaHatem • Dina El-Haddad • RaghdaEssam E-Commerce Strategy and Global EC

2. Agenda • Organizational strategy: concepts and overview Business planning in E-commerce  • E-Commerce strategy : concepts and overview  • E-Strategy initiation  • E-Strategy formulation • E-Strategy implantation • E-Strategy and project assessment • Global E-Commerce  • E-Commerce in small and medium - sized enterprises 

3. Organizational Strategy: Concepts and Overview • Strategy:A broad-based formula for how a business is going to accomplish its mission, what its goals should be, and what plans and policies will be needed to carry out those goals. • Strategy is also about making tough decisions about what not to do.

4. develop guide Strategy create Tactic Organizational Strategy : Concepts and Overview Vision Customers, market, competition Products, Services N

5. Organizational Strategy: Concepts and Overview • Vision Yourvision is an idealized state for your life and/or business. It is the big picture of what you want for the future and encompasses your mission, values, goals and objectives. • Mission Yourmission is the nuts and bolts of the vision. Mission is the who, what and why of your business (or personal) existence.

6. Organizational Strategy: Concepts and Overview • E-commerce strategy (e-strategy) The formulation and execution of a vision of how a new or existing company intends to do business electronically • Strategic information systems planning (SISP) A process for developing a strategy and plans for aligning information systems (including e-commerce applications) with the business strategies of an organization

7. The Strategic planning Process Strategy Initiation Strategy Assessment Strategy Formulation Strategy Implementation

8. Strategic planning process • Strategy initiation:The initial phase of strategic planning in which the organization examines itself and its environment • Value proposition:The benefit that a company’s products or services provide to customers, the consumer need that is being fulfilled

9. Strategic planning process (cont.) • Outcomes from strategy initiation phase • Company analysis (including value proposition) • include the vision, purpose, value proposition, capabilities, constraints, strengths, and weaknesses of the company. • Core competencies • it refers to the unique combination of the resources and experiences of a particular firm. • Forecasts • Identifybusiness,technological, political ,economical and other trends that are currently affecting the business or might affect it in the future. • Competitor (industry) analysis • Scanningbusiness environment to collect information about direct , indirect and potential competitors.

10. Strategic planning process (cont.) • Strategy formulation:The development of strategies to exploit opportunities and manage threats in the business environment in light of corporate strengths and weaknesses • Specific activities and outcomes from strategy formulation phase: • Business opportunities • It depend if the initiation has been done well several scenarios will be observes . • Cost-benefit analysis • any opportunity must be assessed in terms of cost and benefit to the company, it could be financial or non financial or short-term or long-term. • Risk analysis, assessment, and management • Any initiative EC project have a risk, this risk should be analyzed, assessed and managed.

11. Strategic planning process (cont.) • Strategy implementation:The development of detailed, short-term plans for carrying out the projects agreed on in strategy formulation • Specific activities and outcomes from strategy implementation phase: • Business planning • Setting specific project objects creating project schedule and setting measurable performance targets • Resource allocation • Determined what are organizational recourses including humans ,financial, etc… • Project management • Putting life to the EC project through hiring stuff purchasing equipment licensing and so on

12. Strategic planning process (cont.) • Strategy assessment:The continuous evaluation of progress toward the organization’s strategic goals, resulting in corrective action and, if necessary, strategy reformulation

13. The Strategic Planning Process • Strategic Planning Tools SWOT analysis A methodology that surveys external opportunities and threats and relates them to internal strengths and weaknesses competitor analysis grid A strategic planning tool that highlights points of differentiation between competitors and the target firm scenario planning A strategic planning methodology that generates plausible alternative futures to help decision makers identify actions that can be taken today to ensure success in the future Balanced scorecard a management tool that assesses organizational progress toward strategic goals by measuring performance in a number of different areas.

14. Business Planning in E-Commerce • Business plan A written document that identifies the company’s goals and outlines how the company intends to achieve those goals • Outline of a business plan • Executive Summary • Business Description • Operations Plan • Financial Plan • Marketing Plan • Competitor Analysis

15. Business Planning in E-Commerce • Business Plan Fundamentals • Purposes for business plan • To acquire funding • To acquire nonfinancial resources • To obtain a realistic approach to the business • business case A business plan for a new initiative or large, new project inside an existing organization

16. E-Commerce Strategy : Concepts and Overview

17. E-Strategy Initiation The organization prepares the initial steps needed for starting the cycle. Initial steps: • Renew the organization’s vision and mission. • Analyze organization’s industry, company • Consider initiation issues.

18. Issues in E-Strategy Initiation Be a first Mover not a Follower

19. Determining Scope • When determining scope, the organization considers: The number of products it sells. • The most efficient way to expand the scope to introduce new products into existing market without increase production facilities or staff.

20. Have a separate online company? Separating company’s online operations into new company.

21. Have a separate online brand? A company faces a similar decision when deciding whether to create a separate brand for its online offering. Example

22. E-Strategy Formulation In strategy formulation, the firm must decide which initiative to implement & in what order. Activities: Selecting EC opportunities, productive strategy selection approach can be used. • Problem-driven Strategy: may be best when an organization has specific problem that an EC application can solve. • Technology-driven Strategy: occur when a company owns technology that it needs to use. • Market-driven Strategy: can occur when company waits to see what competition in the industry do.

23. Determining an Appropriate EC Application Portfolio • The BCG Model (Boston Consulting Groups) The model used to show the growth-share matrix. 2. An Internet Portfolio Map for Selecting Applications The Internet portfolio map is based on company fit and project viability.

24. Cont’d Internet Portfolio Map High Sell project Adopt project Viability of Project Reject project Redesign project Low Company Fit High

25. Risk Analysis and Management • e-commerce (EC) risk The likelihood that a negative outcome will occur in the course of developing and operating an electronic commerce strategy

26. E-Strategy Implementation • The execution of the strategic plane takes place in the Strategy Implementation phase, in which detailed, short-term plans are developed for carrying out the projects agreed on in the strategy formulation. • Decision makers evaluate options, establish specific milestones, allocate resources, and manage the projects

27. Cont’d Create a Web Team • Carefully define the roles and the responsibilities of the team leader, team members, webmaster, and technical staff • project champion :The person who ensures the EC project gets the time, attention, and resources required and defends the project from detractors at all times

28. Cont’d Start with a Pilot Project Pilot projects help uncover problems early, when the plan can easily be modified before significant investments are made

29. Cont’d Allocate Resources • Resources depend on the information requirements and the capabilities of each project. • Some resources will be new and unique to the EC project Manage the Project Variety of tools , Microsoft project determining project tasks, milestones, and resource requirements DFD can help

30. Strategy Implementation Issues • Application development Number of decisions of whether to build, buy, or outsource various construction aspects of the application implementation process face the company • Partners’ strategy • outsourcing The use of an external vendor to provide all or part of the products and services that could be provided internally

31. Cont’d • Business alliances and virtual corporations - B2B e-marketplace - Virtual corporation (VC) An organization composed of several business partners sharing costs and resources for the production or utilization of a product or service • Permanent,temporary - co-opetition Two or more companies cooperate together on some activities for their mutual benefit, even while competing against each other in the marketplace

32. Cont’d • Redesigning business processes • business process reengineering (BPR) A methodology for conducting a comprehensive redesign of an enterprise’s processes Is the analysis and design of workflows and processes within an organization • Business process management (BPM) Method for business restructuring that combines workflow systems and redesign methods; covers three process categories people-to-people, systems-to-systems, and systems-to-people interactions

33. E-Strategy and Project Assessment • The Last phase of e-strategy begins as soon as the implementation of EC application or project is complete • The Objectives of Assessment • Measure the extent to which the EC strategy and ensuing projects are delivering what they were supposed to deliver • Determine if the EC strategy and projects are still viable in the current environment • Reassess the initial strategy in order to learn from mistakes and improve future planning • Identify failing projects as soon as possible and determine why they failed

34. Cont’d • Each company measures success or failure by different set of standards • One way to measure a project's performance is to use metrics • Measuring Results and Using Metrics • Metric A specific, measurable standard against which actual performance is compared • Corporate (business) performance management (CPM, BPM) Advanced performance measuring and analysis approach that embraces planning and strategy Is a set of management and analytic processes that enable the management of an organization's performance to achieve one or more pre-selected goals.

35. Cont’d • The Major steps of the process: • Setting goals and objectives • Establishing initiatives and plans to achieve those goals • Monitoring actual performance against the goals • Taking corrective action

37. Cont’d • Web analytics The analysis of clickstream data to understand visitor behavior on a Web site It is often done without the permission or knowledge of the user, in which case it becomes a breach of web browser security.

38. Global E-Commerce • Benefits and Extent of Operations • The major advantage anywhere of the global EC are the ability to do business at any time, from anywhere, and at a reasonable cost

39. Barriers to Global EC • Despite the benefits and opportunities offered by globalization, there are many barriers to global EC. • We will use (CAGE) framework to identify areas in which barriers hinder global EC. • Cultural Issues • Administrative Issues • Geographic Issues • Economic Issues

40. Culture Issues • Doing business globally requires cultural marketing to meet the needs of a culturally diverse population. • Language • Information formatting • Time standards • Currency

41. Administrative Issues • One of the most contentious area of global EC is the resolution of legal issues. • International trade organizations attempt to reduce EC trade barrier in areas • Pricing regulation • Customs • Import/Export restrictions • Tax issues • Product specification regulations

42. Geographic Issues • The geographic issues of shipping goods and services across international borders are well known. • Barriers posed by geography differ based on the transportation infrastructure between and within countries and the type of product and services being delivered. ( geographic distance is almost irrelevant with online software sales )

43. Economic Issues • Economic and financial issues in global EC include government tariffs, customs and taxation. • EC electronic payment system • Pricing is another economic issue

44. Global E-Commerce • Breaking Down the Barriers to Global EC • Be strategic • Know your audience • Localize • Think globally, act consistently • Value the human touch • Clarify, document, explain • Offer services that reduce barriers

45. EC in Small and Medium-Sized Enterprises • Critical Success Factors for SMES • Product is critical • Payment methods must be flexible • Electronic payments must be secure • Capital investment should be kept to a minimum • Inventory control is crucial • Logistics services must be quick and reliable • High visibility on the Internet • Join an online community • A Web site should provide all of the services needed by consumers

46. Key Points

47. Questions

48. Thank you 