Scope of e-commerce

Learning objectives What is e-commerce? What are the e-challenges? What are the strategies for e-commerce?

Learning objectives What is e-commerce? What are the e-challenges? What are the strategies for e-commerce?

E-commerce definition Technology-enabled transactions and technology- mediated exchanges of digitized information between parties (individuals or organizations) as well as the electronically based intra-organizational or inter-organizational activities that facilitate such exchanges

E-commerce definition Scope of e-commerce: 1.Exchange of digitized information 2.Technology-enabled transactions 3.Technology-mediated relationships 4.Intra- & inter-organizational activities

E-commerce definition B2B C2B B2C P2P Business Consumers Business originating from... Business Consumers And selling to...

E-commerce categories Publishers order paper supplies from paper companies Amazon orders from publishers Publishers order paper supplies from paper companies Amazon orders from publishers Consumers aggregate to bulk purchase from Amazon Consumers buy thousands of Harry Potter books from Amazon Business Consumers Business originating from... Business Consumers And selling to... Consumers resell copies on eBay Single chain (or converging categories) of e-commerce

E-commerce definition

Innovation Consolidation 2006-future Reinvention Technology-drivenBusiness-drivenAudience, customer, community-driven Revenue growth focusEarnings & profits focusAudience & social network growth focus Venture capital financingTraditional financingMerger & acquisition EntrepreneurialTraditional/old economyLarge pure Web-based firms DisintermediationStrengthening intermediaries Proliferation of small online intermediaries Perfect marketsImperfect markets, brands, network effects Online market imperfections Pure-playBricks & clicksNew market (pure play); Retail (bricks & clicks) First-mover advantagesStrategic followerNew market (1 st mover)

Learning objectives What is e-commerce? What are the e-challenges? What are the strategies for e-commerce?

Role of e-commerce managers Entrepreneurship Strategic Management Technology New Media Accounting Operations and Logistics Finance Marketing

Role of e-commerce managers Set Vision Establish Goals Formulate Strategy Drive Implementation Be Accountable for Performance

Role of e-commerce managers Vision: higher-order societal effects Goals: performance targets that are measurable and in line with the company’s strategy & business life cycle (process vs outcome) Strategy: tradeoffs Implementation: technology & media knowledge Accountability: performance & results

E-commerce challenges Understanding customer evolution –Invest ahead of customer needs Charting changing technology –Match technology choices to consumer tastes Weathering the storm –Reassure stakeholders with clear vision, sensible business model, and profitable venture Integrating offline & online activities –Align offline & online business activities, esp. advertising, branding, retail & online store design, service, warranties, returns (customer-facing activities) Identifying key levers of competitive advantage –Reallocate resources as competitive advantage levers evolve Expanding globally –Deal with complex internationalization issues

Learning objectives What is e-commerce? What are the e-challenges? What are the strategies for e-commerce?

E-commerce strategies Implementation Internal (Company) Analysis External Analysis Control and Monitoring Strategy Formulation Corporate Business Unit Functional Operating Objectives Mission Classical Strategic Planning

E-commerce strategies Sense and respond Experimenting with intuitive, actionable, easy to implement ideas Proactively soliciting feedback from customers

TypePurposeExample How-to rulesThey spell out key features of how a process is executed - "What makes our process unique?" Akamai's rules for the customer service process: staff must consist of technical gurus, every question must be answered on the first call or , and R&D staff must rotate through customer service. Boundary rulesThey focus managers on which opportunities can be pursued and which are outside the pale. Cisco's early acquisitions rule: companies to be acquired must have no more than 75 employees, 75% of whom are engineers. Priority rulesThey help managers rank the accepted opportunities. Intel's rule for allocating manufacturing capacity: allocation is based on a product's gross margin. Timing rulesThey synchronize managers with the pace of emerging opportunities and other parts of the company. Nortel's rules for product development: project teams must know when a product has to be delivered to the leading customer to win, and product development time must be less than 18 months. Exit rulesThey help managers decide when to pull out of yesterday’s opportunities. Oticon's rule for pulling the plug on projects in development: if a key team member- manager chooses to leave the project for another within the company, the project is killed. Simple rules

E-commerce strategies Position approach Where should we be? Resources approach What should we be? Simple rules approach How to get there?

E-commerce strategies

Framing the Market Opportunity Business Model Business Model Customer Interface Customer Interface Market Communication and Branding Implementation Metrics E-commerce strategy formulation process