Scope of e-commerce

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Scope of e-commerce
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Learning objectives

• What is e-commerce?
• What are the e-challenges?
• What are the strategies for e-commerce?

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Learning objectives

• What is e-commerce?
• What are the e-challenges?
• What are the strategies for e-commerce?

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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

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E-commerce definition

• Scope of e-commerce
• Exchange of digitized information
• Technology-enabled transactions
• Technology-mediated relationships
• Intra- inter-organizational activities

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E-commerce definition

• Business originating from . . .

• Business

• Consumers

• B2B

• C2B

• Business

• And selling to . . .

• B2C

• P2P

• Consumers

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E-commerce categories

• Business originating from . . .

• Business

• Consumers

• Publishers order paper supplies from paper
  companies
• Amazon orders from publishers

• Consumers aggregate to bulk purchase from Amazon

• Business

• And selling to . . .

• Consumers buy thousands of Harry Potter books
  from Amazon

• Consumers resell copies on eBay

• Consumers

Single chain (or converging categories) of
e-commerce
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E-commerce definition
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E-commerce definition
1995-2000 Innovation 2001-2006 Consolidation 2006-future Reinvention
Technology-driven Business-driven Audience, customer, community-driven
Revenue growth focus Earnings profits focus Audience social network growth focus
Venture capital financing Traditional financing Merger acquisition
Entrepreneurial Traditional/old economy Large pure Web-based firms
Disintermediation Strengthening intermediaries Proliferation of small online intermediaries
Perfect markets Imperfect markets, brands, network effects Online market imperfections
Pure-play Bricks clicks New market (pure play) Retail (bricks clicks)
First-mover advantages Strategic follower New market (1st mover)
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Learning objectives

• What is e-commerce?
• What are the e-challenges?
• What are the strategies for e-commerce?

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Role of e-commerce managers
Strategic Management
Finance
Marketing
Entrepreneurship
Accounting
Operationsand Logistics
Technology
New Media
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Role of e-commerce managers
Set Vision
Establish Goals
Formulate Strategy
Drive Implementation
Be Accountablefor Performance
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Role of e-commerce managers

• Vision higher-order societal effects
• Goals performance targets that are measurable
  and in line with the companys strategy
  business life cycle (process vs outcome)
• Strategy tradeoffs
• Implementation technology media knowledge
• Accountability performance results

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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

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Learning objectives

• What is e-commerce?
• What are the e-challenges?
• What are the strategies for e-commerce?

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E-commerce strategies
Mission
Objectives
Internal (Company) Analysis
External Analysis
Strategy Formulation

• Corporate
• Business Unit
• Functional
• Operating

Implementation
Control andMonitoring
Classical Strategic Planning
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E-commerce strategies

• Sense and respond
• Experimenting with intuitive, actionable, easy to
  implement ideas
• Proactively soliciting feedback from customers

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Simple rules
Type Purpose Example
How-to rules They 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 e-mail, and RD staff must rotate through customer service.
Boundary rules They 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 rules They help managers rank the accepted opportunities. Intel's rule for allocating manufacturing capacity allocation is based on a product's gross margin.
Timing rules They 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 rules They help managers decide when to pull out of yesterdays 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.
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E-commerce strategies

• Position approach
• Where should we be?
• Resources approach
• What should we be?
• Simple rules approach
• How to get there?

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E-commerce strategies
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E-commerce strategies
E-commerce strategy formulation process

• Framing the Market Opportunity

• Business
• Model

• Customer
• Interface

• MarketCommunicationand Branding

• Implementation

• Metrics