1. Tour VI: e-Business Strategy
E. Widodo

2. Objectives Understand effective strategy for e-business
Know the differences between traditional business and e-Business strategy
Be able to integrate some alternative strategies

3. Contents e-Business strategy Strategic analysis Strategic objectives
Strategy definition
Strategy implementation

4. e-Business strategy
Strategy: definition of the future direction and action of a company defined as approaches to achieve specific objectives.
e-Business strategy: definition of the approach by which application of internal and external electronic communication can support and influence corporate strategy.
Corporate
strategy
e-Business
IS/IT
Marketing/CRM
SCM
Buying side
Selling side
Derivation
Intern

5. Strategy process models
Strategy process model: a framework for approaching strategy development.
Common elements involve:
Internal and external environment scanning or analysis.
Clear statement of vision and objectives.
Strategy development can be broken down into strategy option generation, evaluation and selection.
Strategy implementation (enactment).
Control mechanism to monitor operational and strategy effectiveness.

6. E-Business strategy process models
Hackbarth & Kettinger (2000), a four stage “strategic e-breakout”:
Initiation
Diagnosis of industry environment
Breakout to establish a strategic target
Transition or plotting a migration path
Weakness:
Does not emphasize objective setting
No control mechanism
Strengths:
Detailing specific e-Business strategy development activities
Ex: diagnosis includes customer, suppliers, partners and technology

7. E-Business strategy process models
UK institute of directors (2000) emphasizes some differences on :
Planning horizon, based on forecast to develop short, medium and long term e-business strategy.
Planning cycles, iterative strategic development since the competitive advantage is very volatile.
Power base, information power-based to access, control and manipulate critical information.
Customer focus, base on the ultimate consumer of the value chain.

8. E-Business strategy process models
Chaston (2000), “selecting e-strategy and constructing e-plan”:
Situation review
SWOT analysis
Summary of key issues
Statement of future objectives
Strategy to achieve future objectives
Marketing mix for delivering strategy
Action plan
Financial forecast
Control system
Contingency plan

9. E-Business strategy process models
Venkatraman (2000), “dot-com strategy”:
What is your strategic vision? This concludes business model and how to achieve it.
How do you govern dot-com operations? Operational decision (production, sourcing, logistics, marketing & HR) and trade-off with financial decisions (investment, funding sources & performance criteria)
How do you allocate key resources of the dot-com operations? Resourcing: internal resourcing, alliances or outsourcing.
What is your operating infrastructure for the dot-com operations? Infrastructure to add value to customer via functionality, personalization and ensuring privacy.
Is your management team aligned to the dot-com agenda? Responsibility and structure used.

10. Generic strategy process model

11. Emergent strategy
Emergent strategy: strategic analysis, strategic development and strategy implementation are interrelated and developed together with emphasize on continuous review and prioritizing of investment.

12. Strategic analysis
Strategic analysis/situation analysis: collection and review of information about an organization’s internal processes and resources & external marketplace factors in order to inform strategy definition.
Including:
Internal resources and process of the company
Immediate competitive environment (micro-environment)
Wider environment (macro-environment)

13. Internal resources and process
Resource analysis: review of the technological, financial and HR of an organization and how they are utilized in business processes.
It can be represented by evaluation of stage models of e-Business development.
1. Web presence
2. e-Commerce
3. Integrated e-Commerce
4. e-Business
Service available
Brochureware of interaction with product catalogues
Transactional function on buying & selling side
Buying and selling side integrated with ERP or leg. syst.
Full integration of intern processes & elements of value network
Organizational scope
Isolated departments
Cross-organizational
Across the enterprise (extraprice)
Strategy
Limited
Selling side e-Commerce
e-Commerce strategy with business strategy
e-Business strategy as part of business strategy

14. Application portfolio analysis

15. Organizational & IS SWOT analysis

16. Immediate competitive environment
Dominant factor is Demand Analysis.
Demand analysis: assessment of the demand for e-Commerce service amongst existing and potential customer segments.

17. Wider environment

18. Strategic objectives
Strategic objectives: statement and communication of and organization’s vision, mission and objectives.
Objectives is accompanied with strategies and performance measures.
O1: Develop revenue from new geographical market
S1: Create e-Commerce facility for standard products and assign agents to this market
PM1: Achieve combined revenue of Rp 1T by year end. Online revenue contribution is of 45%
O2: Improve efficiency of sourcing raw materials
S2: Create e-Procurement system
PM2: Reduce cost of procurement by 5% for the 1st year and 10% for the 2nd one
Balance Score Card is commonly used to translate organizational strategy into objectives and then providing metrics to monitor the execution.

19. Strategy definition
Strategy definition: formulation, review and selection of strategies to achieve strategic objectives.
Including:
Options generation
Options evaluation
Options selection
Six key e-business strategic decisions:
e-Business priorities
Business and revenue models
Marketplace restructuring
Market & product development
Positioning & differentiation
Organizational restructuring

20. Strategic options of e-Business

21. Market and product development strategies

22. Strategy implementation
Strategy implementation: planning, actions and controls needed to achieve strategic objectives.
Including:
Planning
Execution
Control
Implementation issues:
SCM strategy (buying-side)
e-Marketing strategy (selling-side)
Planning, scheduling and change management
E-Business analysis and design
Implementation, maintenance & control

23. 6th week souvenir
Task 1:
Please relax yourself for a while and then enjoy our mid-term-test week. OK?