Adding Strategic Value Through

e-Business Innovation
Revised Date: 10/6/203
Define e-Business strategy
Define factors that affected e-Business
strategy development
Define e-Business strategy model
Define the impact of e-Business model
towards the supply and value chain system
E-Business strategy
Supply chain management
Definitions by Chaffey(2009):


Strategy
The future direction and actions of an organization
E-Business Strategy
The approach which applications of internal and external
communications can support and influence corporate strategy
E-Business strategy focuses on how to do business differently online
Figure 5.1 Different forms of organizational strategy refer to page 203.
Macro
Factors
Organization
Micro
factors
Macro Factors-SLEPT

Macro
factor
social
legal
political
technological
economic
Micro factors
Factors within an organization
that affect its performance and
decision-making freedom.

Include internal resources and
capabilities, competitors,
customers, distribution
channels, suppliers, and the
general public.
Define a specific goals and approaches for
using electronic channel.
Examples:
How to communicate with customers and
partners?
How to conduct an online promotion/marketing?
How to sell things online?
How to manage an online business?
Many more.

E-channel Strategy:
Define specific goals and approaches for using
electronic channel.
Multi channel strategy:
Defines how different marketing and supply chain
channel should integrate and support each other -
> to achieve effectiveness + efficiency.
Gains value
Example: Communication, product and service
development, information sharing etc.
Characteristics:
A channel strategy
Specific objectives
Communicate the benefits, prioritize audience and products, e-
channel target
Create differential value for all parties
Create channel integration- right channeling
Reaching the right customer
Using the right channel
With the right message
At the right time
Gain values internally through information sharing and process
efficiency
Self-reading- Mini case study 5.1 page 206-207
Figure 5.4 A generic strategy process model- refer page 210
Collection and review of information about:
organizations internal processes
resources and
external marketplace factors
Figure 5.6 Elements of strategic situation analysis for the e-business page 213
Techniques:
Resource analysis
Application portfolio analysis
SWOT analysis
Demand analysis
Competitor analysis

Assignment 2:
Find out about these techniques. Provide a description and an example for each. Explain
how these techniques can be used in e-Business context. Prepare your answers using Mic.
PowerPoint, not more than 7 slides including the cover slide and references list.
Submission date: 27
th
June 2013 before 5pm.

Key element in
strategy process
model
Consists of
statement and
communication of
an organizations
mission, vision and
objectives.

Figure 5.11 Elements of strategic objective setting for the e-business- page 223
OUR COMPANY
Vision
Mission
Objectives
Defining vision and mission
A mental image of the possible and future state of
the organization.
Include view of the future relevance of the
Internet to their industry.

Example: How can e-business create business
value?
Added value
Provide better-quality products and services
Reduce costs
Make business process more efficient
Manage risks
Create different functions and professions
Create new reality
Can be used to innovate
Examples- Objective Setting, refer to table
5.4, page 227
Use SMART approach
Find out what is SMART approach
Focus on effectiveness and efficiency
What is effectiveness?
What is efficiency?
Involved
formulation, review
and selection of
strategies to achieve
strategic objectives.
It is driven by the
objectives, vision
and mission.
6 key decisions may
involve.
Figure 5.16 Elements of strategy definition for the e-business
Decision 1: E-business channel priorities
Define a right channel
Bricks and mortar
Clicks and mortar
Clicks/ Internet pureplay
Refer table 5.7-Right channeling
Examples:
B2B serve SMEs through e-channels and larger clients through personal service
Encourage consumers to buy and serve through lower cost electronic channels
Encourage offline fulfilment/conversion as appropriate
Different levels of service/promotion for different customers.

Figure 5.17 Strategic options for a company in relation to the importance of the
Internet as a channel
Decision 2: Organizational restructuring
How the company should restructure or change
its capabilities for e-business
The choices are:
In-house division- integration
Joint venture
Strategic partnership
Spin-off
Decision 3: Business, service and revenue
models
Review of opportunities from new business and
revenue models
Review new revenue opportunities and
competitor innovations
Self-reading: Mini case study 5.2- Innovation in
the Dell business model, page 239-240.
Decision 4: Marketplace restructuring
Consider options created through
disintermediation and reintermediation
Self-reading: Mini case study 5.3- 3M innovates
in the e-marketplace, page 241-242.
Decision 5: Market and product development
strategies
Decide on which market to target
Decide on technology to be used to address new
markets and new products.
Example of strategies:
Market penetration
Market development
Product development
Diversification

Figure 5.19 Using the Internet to support different growth strategies
Figure 5.20 smile (www.smile.co.uk) Mini case study 5.4, page 244-245
Source: Reprinted by permission of The Co-operative Bank
Decision 6: Positioning and differentiation strategies
Position the product based on customer perception of
value or brand:
Product quality
Service quality
Price
Fulfillment time
Position product for online market
Product performance excellence
Price performance excellence
Transactional excellence
Relationship excellence

Customer value (brand perception) = Product quality x Service quality
Price x Fulfilment time
Include all
tactics to
achieve the
objectives
Self-reading:
Mini case study
5.5., page 549-
550.
Figure 5.22 Elements of strategy implementation for the e-
business- page 249
Timing errors
Lack of creativity
Offering free services
Over-ambition
Situation analysis- insufficient research for demand
and competitive forces
Objective setting- unrealistic objectives/ not clear
Strategy definition poor decision about business,
revenue model, market, etc.
Implementation- problems with customer service,
quality, infrastructure, change management, etc.
1. Content
2. Convenience
3. Control
4. Interaction
5. Community
6. Price sensitivity
7. Brand image
8. Commitment
9. Partnership
10. Process improvement
11. Integration
Class Activity:
Find out how these
factors may contribute
to the success of e-
Business
implementation in an
organization.
Identify the main elements of supply chain
management and their relationship to the
value chain and value networks
Assess the potential of information systems to
support supply chain management and the
value chain.

Supply chain management (SCM) The coordination of all
supply activities of an organization from its suppliers and
partners to its customers

Upstream supply chain Transactions between an organization
and its suppliers and intermediaries, equivalent to buy-side e-
commerce

Downstream supply chain Transactions between an
organization and its customers and intermediaries, equivalent
to sell-side e-commerce.
Figure 6.1 Members of the supply chain: (a) simplified view, (b) including
intermediaries
From a system perspective:
Acquisition of resources (inputs)
Transformation (process)
Products and services (outputs)

Figure 6.2 A typical supply chain (an example from The B2B Company)
A simple model of a supply chain
Closely related to supply chain management
Used to refer specifically to the management of
logistics or inbound and outbound logistics
Inbound logistics: The management of material
resources entering an organization from its suppliers
and other partners
Outbound logistics: The management of material
resources supplied from an organization to its
customers and intermediaries
Figure 6.3 Push and pull approaches to supply chain management
Push and pull supply chain models
Based on process view of organizations
Inputs, transformation processes and outputs
involve:
Acquisition and consumption of resources labor,
money, materials, equipment, building,
administration and management
A set of activities for which a
product/services is created and delivered to
customers ( Porter, 2001)
Figure 6.4 Two alternative models of the value chain: (a) traditional value chain
model, (b) revised value chain model
Source: Figure 6.4(b) adapted from Deise et al. (2000)
Step1
Assess the
information
intensity
Step 2
Determine
the role of IS
in the
industry
structure
Step 3
Identify and
rank the way
IS can create
competitive
advantage
Step 4
Investigate
how IS
generate new
businesses
Step 5
Develop an IS
plan
map
Organization External & Internal Value Chain
Activities that
create value
Activities that
do not create
value
Activities that
dont add
value
An organization which uses ICTto allow it to
operate without clearly defined physical
boundaries between different functions
Lack of physical structure
Reliance of knowledge
Use of communications technology
Mobile work
Boundaryless and inclusive
Flexible and responsive
Increased efficiency of individual processes
Benefit: reduced cycle time and cost per order
Reduced complexity of the supply chain
Benefit: reduced cost of channel distribution and sale
Improved data integration between elements of the supply
chain
Benefit: reduced cost of paper processing
Reduced cost through outsourcing
Benefits: lower costs through price competition and reduced spend
on manufacturing capacity and holding capacity.
Innovation
Benefit: better customer responsiveness.
Increased convenience through 24 hours a day, 7 days a week,
365 days ordering
Increased choice of supplier leading to lower costs
Faster lead times and lower costs through reduced inventory
holding
The facility to tailor products more readily
Increased information about products and transactions such as
technical data sheets and order histories
Figure 6.11 A typical IS infrastructure for supply chain management
IS infrastructure for SCM
E-business strategy process model:
Continuous internal and external analysis
Clear statement of vision, mission and objectives
Strategy development can be broken down into
several activities such as formulation and selection
Strategy implementation
Required control
Responsive to changes in marketplace.
A four stage model can be used as a framework.
SCM- involves the coordination of supply activities of an
organization from its suppliers and partners to its customers
Upstream procurement and inbound logistic
Downstream- sales, outbound logistic and fulfillment
Value chain concept closely related to SCM
Benefits of deploying technologies:
More efficient, lower cost execution of process
Reduced complexity of the supply chain
Improved data integration between elements of the supply chain
Reduced costs through ease of dynamic outsourcing
Enabling innovation and customer responsiveness

E-business strategy process model:
Continuous internal and external analysis
Clear statement of vision, mission and objectives
Strategy development can be broken down into
several activities such as formulation and selection
Strategy implementation
Required control
Responsive to changes in marketplace.
A four stage model can be used as a framework.
1. Define e-Business strategy
2. Select a retailer of your choice, and analyze the
main elements of its situation analysis should
comprise.
3. Define a four stage model for strategy
development.
4. Outline a set of e-Business strategy for these
type of business:
Wedding planner
Food services
1. Define SCM; how does it relate to:
Logistic
The value chain concept
Value networks
2. What is push orientation and pull
orientation? How do these concepts
affected the value chain system?
3. How can e-Business be used to support
restructuring of the supply chain.
Google Image, http://www.google.com
accessed on 21 April 2011.
Chaffey, D., (2009, 2011), E-Business and e-
Commerce Management, 4
th
and 5
th
Edition,
Prentice Hall.
Phillips, P., (2003), e-Business Strategy,
McGraw Hill.