1. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 1 Chapter 11: E-Business Strategy

2. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 2 LEARNING OBJECTIVES (1) : Outline the steps involved in strategy development. List the major drivers of e-business strategy and their impact. Explain the importance of an e-business value chain. Describe the process of business model evaluation. Discuss how alliances and acquisitions relate to strategy development. Identify the major strategies e-businesses are using to differentiate themselves.

3. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 3 LEARNING OBJECTIVES (2) : List the advantages that a pioneering firm can gain. Explain the importance of brand names for e- businesses. Describe the strategic role of portals. Identify the alternative competitive arenas where e- businesses can find opportunities. Describe the measures that businesses can use to judge e-business success.

4. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 4 Vignette: Microsoft vs. The World (1) Thinking Strategically –Determine the environmental factors influencing Microsoft. –What are Microsoft’s strengths and weaknesses. –Decide which of Microsoft’s strengths allow it to gain an advantage over its competitors. –List environmental threats that Microsoft faces currently and could face in the future.

5. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 5 Microsoft's Internet Strategic Actions: Purchases/License/Alliances

6. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 6 Vignette: Microsoft vs. The World (3) Thinking Strategically –What steps could Microsoft could take to lower those threats. –Speculate on the future opportunities that Microsoft may have. –List the different competitive arenas in which Microsoft is competing. –What steps Microsoft would need to take to take to pursue those opportunities. –Recommend a strategy that a company could use to compete in the same markets as Microsoft.

7. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 7 What Is Strategy A strategy consists of a pattern of decisions that set the goals and objectives that lead to long run competitive advantages for a firm. –Undertake a SWOT analysis. –Determining distinctive competencies. Determining the competitive arena. –Develop a plan to reach the business goals.

8. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 8 Definitions : A value chain is a way of envisioning the collection of activities that a business undertakes to design, produce, market, deliver, and support products or services. The Competitive Arena is the competitive environment in which a business competes. Distinctive Competencies are unique areas of advantage where a firm can differentiate itself from competitors.

9. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 9 Steps for Strategy Development (1) Undertake a SWOT analysis. –Evaluate the Strengths, Weaknesses, Opportunities, and Threats facing a business. Determining distinctive competencies. – Analyze a business’s value chain to help identify internal strengths and weaknesses that can help determine how a business can compete.

10. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 10 Steps for Strategy Development (2) Determining the competitive arena. –Determine the competitive environment in which a business competes Helps set the mission Indicates the windows of opportunity to be pursued Identifies the competitive environment. Develop a plan to reach the business goals. –Outline the strategic actions and tactics a business must undertake to move from where and how it currently competes to where and how it needs to compete given its distinctive competencies.

11. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 11 Figure 11.1: Model of Strategy Development Value Chain (Strengths & Weaknesses) Window of Opportunity Strategy Competitive Threats Strategic Drivers Environmental Forces

12. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 12 Table 11.1: Drivers of Environmental Turbulence

13. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 13 E-Business Value Chain (1) E-business value chains view information technology as part of a business’ overall value chain adding to the competitive advantages of a business Competitive Advantage Through Stronger Customer Relationships Marketing/ Sales E-commerce: Lower costs, new market entry. E-business Promotion Management Leadership: Management Intranets: Lower costs, better communication. Innovativeness: Speed, flexibility, new product ideas Value Production Differential Advantages Customization Dynamic Pricing Customer Targeting & Support Databases CRM Distribution Inbound Logistics Extranets: Lowers costs increase speed E-Business Communication Platforms E-Business Technological Infrastructure

14. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 14 Marketing/Sales E-commerce: Lower costs, eases new market entry. Provides e- business promotion. Marketing/Sales E-commerce: Lower costs, eases new market entry. Provides e- business promotion. E-Business Value Chain (2) Value Production ERP Software Differential Advantages, Customization, Dynamic Pricing. Value Production ERP Software Differential Advantages, Customization, Dynamic Pricing. Inbound Logistics Extranets: Lowers costs increase speed Inbound Logistics Extranets: Lowers costs increase speed Competitive Advantage Through Stronger Customer Relationships Management Leadership: Management Intranets: Lower costs, better communication. Innovativeness: Speed, flexibility, new product ideas. Customer Targeting & Support Databases and CRM. Internet: Lower costs, speeds service. Marketing/Sale s E-commerce: Lower costs, new market entry. E-business Promotion. Value Production Differential Advantages, Customization, Dynamic Pricing. Distribution Inbound Logistics Extranets: ERP, Lowers costs increase speed.

15. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 15 Competitive Advantage Through Stronger Customer Relationships E-Business Value Chain (2) Customer Targeting and Support Databases: Enable better CRM. Internet: Lower costs, speeds service. Customer Targeting and Support Databases: Enable better CRM. Internet: Lower costs, speeds service. Management: IT leadership: Encourages innovativeness, speed, flexibility, new product ideas. Intranets: Lower costs, improve communication. Management: IT leadership: Encourages innovativeness, speed, flexibility, new product ideas. Intranets: Lower costs, improve communication. Competitive Advantage Through Stronger Customer Relationships Management Leadership: Management Intranets: Lower costs, better communication. Innovativeness: Speed, flexibility, new product ideas. Customer Targeting & Support Databases and CRM. Internet: Lower costs, speeds service. Marketing/Sale s E-commerce: Lower costs, new market entry. E-business Promotion. Value Production Differential Advantages, Customization, Dynamic Pricing. Distribution Inbound Logistics Extranets: ERP, Lowers costs increase speed.

16. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 16 Marketing/Sales E-commerce: Cellular linked vending machines. Databases: Used with decision support systems. Can determine the effectiveness of marketing efforts. Marketing/Sales E-commerce: Cellular linked vending machines. Databases: Used with decision support systems. Can determine the effectiveness of marketing efforts. Figure 11.3: Coca-Cola E-Business Value Chain (1) Value Production ERP Software: Links Coke with its bottling partners. Provides interconnected management system. Value Production ERP Software: Links Coke with its bottling partners. Provides interconnected management system. Inbound Logistics Extranets: Links Coke with bottling partners and suppliers. Inbound Logistics Extranets: Links Coke with bottling partners and suppliers. Competitive Advantage Through Stronger Customer Relationships Management Leadership: Management Intranets: Lower costs, better communication. Innovativeness: Speed, flexibility, new product ideas. Customer Targeting & Support Databases and CRM. Internet: Lower costs, speeds service. Marketing/Sale s E-commerce: Lower costs, new market entry. E-business Promotion. Value Production Differential Advantages, Customization, Dynamic Pricing. Distribution Inbound Logistics Extranets: ERP, Lowers costs increase speed.

17. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 17 Competitive Advantage Through Stronger Customer Relationships Figure 11.3: Coca-Cola E-Business Value Chain (2) Customer Support Internet: Provide more timely delivery to trade customers. Customer Support Internet: Provide more timely delivery to trade customers. Management Leadership: Intranets: Management willing to change and sell ideas. Intranets: Worldwide systems improves communication. Innovativeness: New approach in the soft-drink industry. Management Leadership: Intranets: Management willing to change and sell ideas. Intranets: Worldwide systems improves communication. Innovativeness: New approach in the soft-drink industry. Competitive Advantage Through Stronger Customer Relationships Management Leadership: Management Intranets: Lower costs, better communication. Innovativeness: Speed, flexibility, new product ideas. Customer Targeting & Support Databases and CRM. Internet: Lower costs, speeds service. Marketing/Sale s E-commerce: Lower costs, new market entry. E-business Promotion. Value Production Differential Advantages, Customization, Dynamic Pricing. Distribution Inbound Logistics Extranets: ERP, Lowers costs increase speed.

18. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 18 Business Models A business model, or commerce model, is the basic process flow indicating how a business operates. Business process modeling is a systematic approach to viewing organizations and the complex relationships that are required to make the business operate.

19. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 19 Analyzing Business Models Four perspectives: –Functional perspectives: identifies the functions within a business an how they interact. –Behavioral perspective: identifies when and how functions are performed in a business. –Organizational perspectives: identifies where and by whom functions are undertaken. –Informational perspectives: identifies what types of information are identified and how do they flow.

20. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 20 Figure 11.4: Generic Business Model

21. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 21 Figure 11.5: Generic E-Business Model

22. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 22 Developing E-Business Models Requires a process of identifying the functional process flows of a business and then modeling how the application of e-business procedures can result in competitive advantage. This requires a six-step process: 1.Identify the functional areas and major player. 2.Indicate how these area are linked and the directions of the flow process. 3.Determine what e-business tools and techniques can be applied to the business model. 4.Develop a new e-business model flow. 5.Evaluate the competitive advantages of the model by using a value chain analysis. 6.Determine the likelihood of acceptance of the new model.

23. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 23 Figure 11.6: The Traditional Higher Education Model

24. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 24 Figure 11.7: The E-Learning Higher Education Model

25. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 25 Figure 11.8: Pre 1998 Computers Sales Functional Business Model Inventory levels ordered based on sales projections. Increased inventory costs as inventory waits in storage. Personal sales backed by national and local advertising Increases sales costs. Payments are made through cash, check, credit card or invoice. Product delivered through shippers to retail outlet. Product sits in retail outlet waiting to be sold and losing value. Customer has immediate possession of product, and can possibly return product and receive support. Manufacturer produces product to fit retail orders.

26. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 26 Dell’s Business Model Suppliers linked through Extranet deliver just-in-time. Lowers inventory costs. Web page provides information and ordering. Lowers ordering costs. Payments are made online through Web page credit card or invoice. Lowers bad debt expense and credit risks. Product delivered through independent shippers such as UPS. Contract low shipping rates, no fixed costs in assets. Customer gathers information and purchases through Web page. Lowers communication costs. Dell manufactures customized PC and sells at low price.

27. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 27 E-BUSINESS STRATEGY Low cost and therefore low price competitor. –A "frictionless" Internet market implies that customers have almost perfect information and can compare prices around the world (by using intelligence agents to search out the best prices enhances this process). Differentiation strategy by finding a unique market position against competitors.

28. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 28 Table 11.2: Methods of Differentiation

29. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 29 Table 11.2: Methods of Differentiation

30. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 30 Speed and First Mover Advantages A pioneering firm has differentiated itself from competition because it is the first to enter a competitive arena or it is able help define the competitive arena. –Advantages: Lower Costs Meeting Current Needs Lower Consumer Risk Perception Charge Higher Prices

31. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 31 Costs Advantages May increase the business’ or product's time in a life cycle, spreading development costs over time and the number of products produced. Firms that follow have less time in the life cycle to recover all costs An early entry firm can gain cost advantages through experience curves and when greater market shares are obtained they obtain greater economies of scale.

32. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 32 Meeting Current Needs The faster a business can respond to the market, the more likely that information from areas such as marketing research will be valid resulting in actions that could lead to higher market share. First, movers have been shown to have a substantially higher market share than later entrants. A product that is six months late to market may miss out on one third of the potential profit over the product's lifetime.

33. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 33 Consumer Risk Perceptions First mover may become the comparison standard for all rival products by setting the standard for performance. Consumers may lower the risk involved in purchasing by choosing a product with an established image or brand. Innovators and early adopters may try first mover products first and influence others through the diffusion process. Advertising and publicity aids in consumer search, but given the lack of alternative products in many innovative markets, advertising may have the effect of setting relevant product attributes the consumer uses in the evaluation process.

34. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 34 Comparison Standard and Switching Cost A comparison standard is what the customer uses to judge a product. –For example, if a customer had first gained their online search experience with Yahoo!, they will evaluate all other search engines against Yahoo. A switching cost is the additional "costs" involved in learning something new. –The costs involved in adopting a new software package would include the software expense, support, training costs, and slowed productivity costs.

35. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 35 Prices Higher introductory prices can be charged for innovative buyers who is often more risk tolerant and may have higher disposable income. With greater amounts of information available to the later adopting consumer, backed by possible word of mouth about benefits, a higher price can be maintained. Later entering firms are seen as higher risk because of lack of information on their products, forcing them to charge lower prices. Remaining customers may be those who are more risk adverse driving the later entrants price even lower.

36. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 36 First and Second Movers Being the first entrant into a market does not guarantee a long term competitive advantage. A firm must have: –Expertise, resources, and creativity necessary to exploit first mover opportunities. Pioneers must find ways to forestall or neutralize the efforts of later entrants or they will not gain first mover advantages.

37. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 37 Building Barriers Entry Into an Industry Can Be Limited by: –Gaining Economies of Scale –Cost Advantages –Developing High Switching Cost –Brand Names –Strong Customer Relationships Development of Portals

38. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 38 Brand Names A brand is a sign, symbol, design, term, name or combination that allows for easy recognition of a product or company. –Brand names often give assurance to the purchaser because they believe that the risk of using a brand name is lower. Build online brand names by: –Online and offline advertising –Ease of navigation and overall experience that a user has with the Web Site.

39. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 39 Portals A portal is an entranceway onto the Internet. They are often the preferred starting point for: –Searches –Entertainment –Information, –Email, –Or any other Internet based product.

40. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 40 Case: AOL: Nobody’s Laughing Now Thinking Strategically –Speculate on the reasons for AOL’s portal success. –Why was AOL able to grow to dominate Internet access. –List some advantages that AOL’s size gives it in the competitive portal arena. –Compare and contrast AOL (www.aol.com) with other portal sites such as Yahoo! (www.yahoo.com), the GO Network (www.go.com), or Excite (www.excite.com).www.aol.comwww.yahoo.comwww.go.comwww.excite.com –Determine how differentiated these sites are from each other. –Justify AOL’s use of strategic alliances to maintain its advantages.

41. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 41 Figure 11.9: Top Domains

42. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 42 Niche Portals Niche portals target specific markets –The number one sport site targeted toward males 111- 34 is ESPN (www.espn.com).www.espn.com) –IVillage is a site targeted toward women (www.ivillage.com).www.ivillage.com –E*Trade (www.etrade.com) targets individuals interested in receiving financial information.www.etrade.com –Snap (www.snap.com) offers "rich-media”.www.snap.com International portals target international markets

43. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 43 Business Portals Commerce portals: target business professionals by offering forums related to products, product information, buying opportunities, order tracking, and other services. Vertical portals: serve narrow niches within specific narrow industries. These can provide users a one-stop site for all information and purchase needs, allowing businesses to access industry or trade information and to buy and sell online. This could include industry articles, job listings, e-commerce, and a variety of e-business communication systems. Customer portals: provide company specific information for customers such as product information, inventory and order tracking, help desk applications, and other services. Corporate portals: often are the intranet applications. This provides information needed by employees such as internal newsletters, human resource information, industry information, and other applications.

44. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 44 International Portals International portals target national or ethnic markets –Yahoo have services for European, Asian, and other country specific markets. –StarMedia (www.starmedia.com) is a portal site specifically designed to serve the Spanish speaking markets of Central and South America as well as in the United States.www.starmedia.com

45. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 45 Vertical Portals Vertical Portals are designed to serve narrow niches within specific industries. –Allow business users a one-stop site for all information and purchase needs, allowing businesses access to industry or trade information and to buy and sell online. VerticalNet (www.verticalnet.com) hosts vertical sites for technology, communications, food service, healthcare, and other firms.www.verticalnet.com Asay Publishing (www.asaypub.com) serves the used office equipment after-market.www.asaypub.com

46. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 46 Table 11.3: SME E-Business Strategy Guide

47. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 47 Table 11.4: E-Business Strategy Matrix

48. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 48 Alliances & Acquisitions The creation of an e-business value chain may come from forming alliances or through the acquisition. –Alliances are formal or informal relationships between independent companies that work together for a common purpose. –An acquisition exists when one corporation purchases all or a controlling part of another company.

49. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 49 EVALUATION OF STRATEGY The Internet stock market at the turn of the millennium was based on a bubble economy. –Investors bid the price of Internet stocks to extremely high levels, only to see those investments come crashing back to earth. –While many traditional companies have valuations set at 7 to 20 times their earnings, in 1998 eBay had a valuation of 773 times its expected 1999 earnings. Historical NSITES: Bubble Economies –The tulip craze of the seventeenth century was an investment bubble. A bubble occurs when the price of a commodity or product is bid beyond any rational level. Growers, dealers, and speculators traded tulip options, causing prices to skyrocket. In 1636, the bubble burst and almost brought the Dutch economy down.

50. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 50 Case 11.2: The Sound of One Bubble Popping Thinking Strategically Speculate on the reasons that Excite@home would pay such a high price for BlueMountain.com. Determine why the price could be so low for AmericanGreeting.com. Evaluate the strategy used by online greeting card companies. Determine if these business models have a long- term viability and how a company can make a profit offering this service.

51. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 51 Figure 11.x: Greeting Card Traffic, Valentine’s Week Traffic (2002 – 21 Million Users)

52. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 52 ROI (1) IT cost benefit analysis will look for benefits in: –Operational efficiencies: includes lowering costs across a number of functional areas. –Productivity gains: Measures increased productivity in areas such as time-on-task, error rates, training costs, etc. –Revenue: uses sales and revenue figures. –Customer satisfaction: this is a softer measure that can be quantified by increases in repeat purchase rates, influence on another’s purchases, or other lifetime value measures.

53. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 53 ROI (2) Return on investment measures typically used to assess e-business investments including: –ROI: measures looks at net revenue over costs. –Payback analysis: determines the length of time it will take to recover the cost of the project. –Net present value analysis: determines the current value of a stream of future returns against current investment. –Economic value added: considers the operating profit minus the capital and debt used to generate the profit

54. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 54 ECONOMIC WELFARE Is society better off with an interconnected world? Perhaps the greatest social benefit is the Internet’s ability to shift power to the individual through access to information and the individual’s ability to use the Internet as a free speech venue. –The Internet has opened the world to many around the world.

55. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 55 Exercise 11.1: Evaluating An E-Business Value Chain Develop a value chain model for an industry or business. –Identify the key e-business technologies needed to compete in the chosen industry. –Identify which of the value chain components would give a business in that industry a distinctive advantage. –Determine if it is possible to hold that advantage over time.

56. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 56 Exercise 11.2: SWOT Box exercise Use the following matrix to undertake a SWOT analysis by identifying the strengths, weaknesses, opportunities and threats faced by a business or industry. Given this SWOT analysis, propose an e-business strategy that could be pursued to reach the opportunity and limit future threats.

57. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 57 Exercise 11.3: Evaluating Differential Advantages Use the table below to indicate the types of services offered by portal sites. Determine what allows each to differentiate themselves from others. If you can not find any differences, determine what that means for the long-term survival for some of these portal sites.

58. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 58 Exercise 11.4: Strategy Analysis Matrix Identify strategic positions of a number of e- businesses. (Try to find at least one business for each cell in the matrix.) Identify the strategies these businesses are pursuing and the keys to their long-term success.

59. For use with Strategic Electronic Marketing: Managing E-Business 2 e Copyright 2003 South-Western College Publishing Chapter 11 Slide: 59 Competitive Exercise 11.5: Evaluating an E-Business Model Choose and industry. Develop a business model for how that industry currently operates and then develop an e-business based model. Compare your model against those of other individuals or groups. Identify how this new model can gain a competitive advantage over other models in the industry.