1. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations

2. Summary Introduction Defining E-Commerce Key Elements Supporting E-Commerce The Strategic Role of E-Commerce Crafting an E-Commerce Strategy Internet Strategy Implementation

3. Introduction These firms must craft a comprehensive e-commerce strategy, radically transform their traditional business models, and deal with the rapidly changing technology associated with e-commerce.

4. E-Commerce Defined Involves business communications and transmissions over networks and through computer means, involving the buying and selling of products and services and the transferring of funds through digital communications.

5. E-Commerce Perspectives Communication perspective, the delivery of information, products, services or payments via telephone or computers. Business process, the application of technology. Service perspective, cost cutting measures while improving quality, and speed of service. Online perspective, the ability to buy and sell products and information on the internet.

6. Key Elements Supporting E-Commerce The Internet and World Wide Web Intranet and Extranet Types of E-Commerce

7. The Internet and World Wide Web E-Commerce is made possible as a result of the development of the Internet and World Wide Web. The Internet is not new: its roots lie in a collection of computers that were linked together in the 1960s as a project of the ARPA and the US Department of Defense.

8. Intranet and Extranet 1/2 Intranet are company-specific, internal Internets. An Intranet links documents on the organization ’ s scattered internal network together. A firm ’ s intranet allows different functions and people to share database, communicate with each other, disseminate timely bulletins, view proprietary information, be trained in various aspects of the firm ’ s business, and share about any type of system the company uses to manage its business.

9. Intranet and Extranet 2/2 Extranet are links that allow business partners such as suppliers, distributors, and customers to connect to a company ’ s internal networks over the Internet or through virtual private networks. An Extranet is created when two organizations connect their respective intranets for business communications and transaction. The purpose of an extranet is to provide a communication mechanism to streamline business process that normally take place elsewhere.

10. E-commerce can play a pivotal role across all functional areas of the business. Types of E-Commerce

11. The Strategic Role of E-Commerce E-Commerce as a Strategic Component What the Internet Can Do The Internet: Strategy Still Matters

12. Many companies Internet decisions have been based on the hype and new business models resulting in less than desirable results. The “Hype” and Reality of E-Commerce

13. E-Commerce as a Strategic Component A communications device. An alternative distribution channel. A means to deliver services. A tool for gathering marketing research data. A method for integrating the supply chain.

14. What the Internet Can Do The Internet is a powerful tool when used properly, and the advantages are significant in terms of more effectively serving customers, communicating useful information, and lowering the cost of doing business. Internet Advantages –Effectively serve customers. –Ability to communicate information. –Lowering the cost of doing business.

15. The Internet: Strategy Still Matters Enhanced Customer Focus, Responsiveness, and Relationships Reduced Transaction Costs Integration of the Supply Chain Focus on Core Business Effective Information Availability for Customers Access Global Markets

16. Crafting an E-Commerce Strategy Delineating E-Commerce Objectives –Synchronizing the Web with Strategy Specific Objectives of Internet Marketing Strategies

17. The illustration shows the framework that outlines important strategic and tactical questions that surround e-commerce strategies. Questions to Guide E-Commerce Strategy Formulation

18. Internet Strategy Implementation The Internet Product Channel Considerations with Internet Marketing The Internet as a Channel Alternative The Impact of the Internet on Price Strategy The Internet and Customer Communication

19. The Internet Product Successful Web Site Design Internet Catalogs Vertical Hubs, Automated Procurement, and Trading Communities Vertical Market Sites Reverse Auctions New Vertical E-Marketplace Rules The determinants of E-marketplace Profitability

20. The design of the web site becomes more complicated as additional objectives are stated by top management. Additional considerations in the planning process for the web site are the needs of the target market for the web site.

21. Guidelines for Developing an Effective Web Site

22. Digital Channel Advantages (pp.137) Can be customized to the buyer’s need. Provides a wide range of referral sources. The internet is always open for business.

23. Phases of E-Commerce (pp.139) Online information … most basic, like a product catalog. Database publishing … the user is provided with search capabilities. Customer self-service … provides customized information for specific users. Transactions … most complex phase, provides for full transactions.

24. Conclusion The internet is just one component of the business marketer’s overall strategy and must be integrated into the firms overall strategy.

25. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations

26. Summary The Concept of Supply Chain Management (SCM) SCM: A Tool for Competitive Advantage Successfully Applying the SCM Approach Logistics as the Critical Element in SCM The Strategic Role of Logistics Calculating Logistics Costs B2B Logistical Service and Management

27. The Concept of Supply Chain Management An innovative approach to distribution processes, bolstering links with suppliers and customers, and integrating production and marketing initiatives. Formal Definition: –The integration of business processes from end user through original suppliers that provide products, services, and information that add value for customers.

28. Note the key elements of supply chain management and the important integration that must take place among a variety of business functions across different organizations in the supply chain. The Supply Chain Model

29. Effective supply chains conduct business as partners and openly share information across the supply chain. Stages Firms Go Through in Adopting Supply Chain Management

30. SCM: A Tool for Competitive Advantage SCM Goals Benefits to the Final Customer The Financial Benefits Perspective Information and Technology Drivers

31. A Tool for Competitive Advantage-- SCM Goals Waste reduction, minimize duplication, harmonizing operations and systems and enhancing quality. Time compression, compression of order to delivery cycle time. Flexible response, the meeting of customer’s unique requirements in a cost effective manner. Unit cost reduction, reduce cost per unit to the end user by first determining the level of performance desired by the customer.

32. A Tool for Competitive Advantage-- Information &Technology Drivers Internet technology. –More timely product development –Reductions in channel inventory –Reductions in communication and customer support costs –Access to new customer segments –The ability to enhance traditional products and customer relationships through customization Supply chain software.

33. Logistics Product “ Flows ” 1.Physical Supply.. those flows that provide raw materials, components, and supplies to the production process. 2.Physical Distribution… those flows that deliver the completed products to customers and channel intermediaries.

34. Virtually no logistical decisions can be made without evaluating how it might effect other logistical areas. Source: Adapted from James R. Stack and Douglas M. Lambert, Strategic Logistics Management, 5 th ed. (Homewood, Ill.: McGraw-Hill, 2000) Controllable Elements in a Logistics System

35. Total Cost Approach Variables 1. Total distribution costs. 2. The level of logistical services provided to customers.

36. Logistical service relates to the availability and delivery of products to the customer. Responsive logistical service advances customer satisfaction and develops the seller-buyer relationship. Common Elements of Logistics Service

37. B2B Logistical Management Considerations Logistical Facilities. Transportation. Inventory.

38. Importance of Inventory Management Production and demand are not perfectly matched. Operating deficiencies in the logistical system often result in product unavailability. Business customers can not predict their product needs with certainty.