1. EC Strategy, Globalization, and SMEs
Chapter 13
EC Strategy, Globalization, and SMEs

2. Learning Objectives
Understand the essentials of online business competition and strategy and how the Internet and EC influence Porter’s Five Forces model.
Describe the performance and strategy cycle.
Describe the strategy initiation phase.
Understand the activities of strategy formulation.
Understand the strategy implementation phase.

3. Learning Objectives
Describe strategy assessment, including the role of metrics.
Describe performance improvements and innovations in e-commerce.
Evaluate the issues involved in global EC.
Describe how small and medium-sized businesses can use EC.

4. Organizational Strategy: Concepts and Overview
Strategy in the Web Environment
Porter’s Five Forces Model and Strategies as Influenced by the Internet and EC
Threat of entry of new competitors
Bargaining power of suppliers
Bargaining power of customers or buyers
Threat of substitute products or services
Rivalry among existing firms in the industry
Strategies for Gaining Competitive Advantage

5. Porter’s Five Forces Model

6. Organizational Strategy: Concepts and Overview
The Impact of the Internet
Strategic Planning for IT and EC

7. The Strategy and Performance Cycle and Tools
*Strategy Initiation—Goals
Improved performance
Gain of competitive advantage
Increased sales and revenue
Improved customer and partner service and relationships
Generation of new business models and facilitating innovation

8. The Strategy-Performance Cycle

9. The Strategy and Performance Cycle and Tools
*Strategy Formulation
Specific activities and outcomes from this phase include:
Business opportunities
Cost–benefit analysis
Risk analysis, assessment, and management
Business plan
*Strategy Implementation
The major specific activities and outcomes from this phase include:
Project planning
Resource allocation
Project management

10. The Strategy and Performance Cycle and Tools
*Strategy Assessment
Performance Improvement and Innovations
Major Tools for Strategic Planning

11. E-Commerce Strategy Initiation
Representative Issues in E-Strategy Initiation in
E-commerce
First-Mover Advantage
Managing Channel Conflict and Disintermediation
*Disintermediation
Price Conflict and Its Management
Separating Online and Offline Operations
Brand Independence
Strategy in the Web 2.0 Environment and in Social Networking

12. E-Commerce Strategy Formulation
Selecting E-Commerce Opportunities
Determining an Appropriate EC Application Portfolio Mix
The BCG Model and an Internet Portfolio Map
The Viability-Fit Model
Risk Analysis in Strategy Formulation
*E-Commerce risk
Collaborative Efforts in Strategy Formulation

13. The Internet Portfolio Map
Sources: Based on Tjan (2001), Sones (2001); and the authors’ experiences

14. E-Commerce Strategy Formulation
Security Issues to Consider During Strategy Formulation
Other Issues in E-Commerce Strategy Formulation
Managing Conflict Between the Offline and Online Businesses
Pricing Strategy
*Cost-plus
Multichannel Strategy
Acquisitions, Partnerships, Joint Venture, and Multi EC Model Strategy

15. E-Commerce Strategy Implementation
E-Commerce Strategy Implementation Process
Find a Champion
*Project champion
Start with a Pilot Project
Allocate Resources
Manage the Project
E-Commerce Strategy Implementation Issues
Build, Buy, or Rent EC Elements
Outsource: What? When? To Whom?
*Outsourcing
Software-as-a-Service

16. E-Commerce Strategy Implementation
Redesigning Business Processes: BPR and BPM
*Business process reengineering (BPR)
*Business process management (BPM)
Change Management

17. E-Commerce Performance Assessment
The Objectives of Assessment
Measure the extent to which the EC strategy and projects are delivering what they are supposed to deliver.
Determine if the EC strategy and projects are still viable in the current changing business environment.
Reassess the initial strategy in order to learn from mistakes and improve future planning.
Identify failing or lagging projects as soon as possible, and determine why they failed or lagged to avoid the same problems in the future.

18. E-Commerce Performance Assessment
The Performance Assessment Process
Set up performance metrics.
Monitor the performance of the business.
Compare the actual performance to the metrics.
Conduct an analysis using analytics, including Web analytics.
Combine the analysis with the methodology of the Balanced Scorecard.
Present the results to management in the form of reports, tables and dashboards.

19. The Performance Assessment Process

20. E-Commerce Performance Assessment
Establish Metrics
*Metric
Measurements in Performance Metrics
*Key performance indicator (KPI)
Intangible variables
E-Commerce Metrics in Action
Performance Metrics
Monitoring Performance
Monitoring the Social Media Field
Social Media Monitoring Tools
*The Balanced Scorecard (BSC)

21. E-Commerce Performance Assessment
Analyzing Performance Data
Defining EC Analytics
Major Types of Analysis
Web Analytics and Its Major Tools
*Web analytics
Social Media Activities
*Sentiment Analysis (opinion mining)

22. Performance Improvement and Innovation
An Overview of Performance Improvement
Dashboards in E-Commerce
What Is a Dashboard?
*Information dashboard
Innovation for Performance Improvement

23. Performance Improvement and Innovation
Innovative Strategies: Some Illustrative Examples
Target Corporation
Best Buy
Travelzoo Inc.
Facebook
Apple
Cars.com
Google+
IBM

24. A Strategy for Global E-Commerce
Benefits and Extent of Global Operations
Globalization and Social Networking
Barriers to Global E-Commerce
Cultural Differences
Language Translation
Machine Translation
Legal Issues
Geographic Issues and Localization
Web Localization
Payments in Global EC Trades
Economic and Financial Issues
E-Commerce in Developing Countries

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

26. E-Commerce Strategy for Small and Medium-sized Enterprises
If Judy Can- You Can Too!: The Story of Blissful Tones Webstore
Globalization and SMEs
Resources to Support SME activities in EC
SMEs and Social Networks

27. Screen Shot Of Blissfultones.Com

28. Managerial Issues
What is the strategic value of EC to the organization?
How do you relate the EC activities to business objectives and metrics?
Should the EC activities in a brick-and-click company be organized as a separate entity?
How should the e-business scope evolve?
What are the benefits and risks of EC?
Why do we need an EC planning process?
How can EC go global?
How do you manage the EC project?

29. Summary Strategy concepts and competitiveness.
The strategy-performance cycle and strategy tools.
E-strategy initiation.
Strategy formulation.
E-strategy implementation.
Strategy assessment.
Performance improvement and innovation.
Issues in global EC.
Small and medium-sized businesses and EC.