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Chapter-4
Business Strategy
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Introduction to Business Strat
StrategyFormulation
e-CommerceStrategy
e-CommercePlan
BusinessImplementation
TechnicalImplementation
Evaluation
update
revise
improve
TechnologyEvaluationBusiness
EnvironmentBusinessCapability
BusinessStrategy
BusinessStrategy
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Introduction to Business Strat
‘Corporate strategy is the pattern o ma!or ob!ectives"
goals and essential policies or plans or achieving those
in such a #ay as to deine #hat business the company
be in and the $ind o company it is or is to be%&
'nd
Corporate strategy
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Strategy Formulation Four Stages of Strategy Formulation:
Consideration o environmental changes that br
opportunities and pose ne# threats%
'ssessment o the internal strengths and #ea$nesses
and in particular its ability to respond to those opportunit
' decision-ma$ing process inluenced by the values"
po#er o interested parties%
' strategy generating process concerned #ith genera
evaluating them%
eedle ()**4,
Introduction to Business Strategy
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'lternative strategies
Strategy ormulation is both rational and intuitive . organis
the same environmental circumstances and #ith similar busmay #ell develop entirely opposite strategies%
Car assemblers may go for:
/olume production that competes on price" or
0igher margins in 1uality and niche mar$ets%
Retailers may choose to:
S#itch strategy to online selling% 2evelop their agent net#or$%
Enhance traditional retail outlets%
Whatever the selected strategy:
Strategy ormation is an ongoing process%
The strategy needs to become part o the abric o the or
Introduction to Business Strategy
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Strategic Implications o IT
IT . initially used or administrative automation%
ICT (inormation and communications technology, use
Intra-organisational systems
Inter-organisational systems
Public access networs !Internet"
#obile data communications
The use o ICTs can have strategic implications or
organisations%
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e-Commerce strategy input
Traditionally an IT Strategy #ould be subservient t
Strategy%
For e-Commerce the IT Strategy becomes a centra
the determinant actor, in Business Strategy%
In$uts to an e-Commerce %usiness Strategy are:
Technology
Business Environment
Business Capability
Eisting Business Strategy
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Technology
e-Commerce technologies:
&'I:
Streamline supply logistics%
Facilitate decreases in trade cycle times%
&lectronic #arets:
5edeine the operation o a mar$et sector%
Internet e-Commerce:
e# direct sales opportunities
ovel business to business and business
applications
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Technology (cont6,
The organisation Source of business value
Improve it product promotion
new direct sales channel
direct savings
time to market
customer service
brand image
Transorm it technological and organisation
learning customer relations
5edeine it new product capabilities
new business models
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Business Environment
(ll businesses o$erate within an e)ternal e
&nvironmental factors that interact with business in
The &conomy:
The State:
Sets the regulatory rame#or$ (For e-Commerce
spread" the eect o state regulation can be ambig
Technology: (the topic o the previous section,
The +abour #aret: e-Commerce - need special s$ills%
e-Commerce can result in do#nsi7ing%
Culture:
e-Commerce varies across countries%
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Business capability ,a$ analysis:
‘A knowledge of the resources and an organisation
what can be done with them, is a prerequisite for f
establishes whether a gap exists between what manlike to do and what they can do.’
e-Commerce needs ne# s$ills and" in all probability" a
#hich business is done%
&)isting %usiness Strategy:
/ery possibly the organisation already has a busine
this can and should be part o the evaluation o t
strategy%
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Strategy Formulation 8 Implementation P
The Strategy Formulation is based on the in$uts:
Technology
Business Environment
Business Capability
Eisting Business Strategy
Strategy Formulation then involves discussion an
stages can include:
Identiying 9ptions
Evaluating 9ptions Selecting Strategy
The out$uts are:
The e# Business Strategy
'n e-Commerce Strategy
St t F l ti 8 I l t ti Pl i
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Strategy Formulation 8 Implementation Planning
Fig.: e-Commerce Strategy Formulation
StrategyFormulation
e-CommerceStrategy
e-Commerce
Plan
BusinessImplementation
TechnicalImplementation
Evaluation
update
revise
improve
TechnologyEvaluationBusiness
EnvironmentBusinessCapability
BusinessStrategy BusinessStrategy
C I l t ti
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e-Commerce Implementatio
The approach to technical implementation o an
system depends on the business ob!ectives" busines
and the technologies that have been selected%
Technical im$lementation:
Ease o :se
Functionality
Bac$ 9ice Systems
%usiness Im$lementation:
Business Inrastructure
;ar$eting
C I l t ti (
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e-Commerce Implementation (co
Technical Im$lementation
The ease of use of the system by the intended end us
It is al#ays an important actor in system design but
users are to be members o the public #ith perhaps
literacy and the option to s#itch to an alternative #ebsi
Functionality:
This has to be #hat the users #ant rather than #hat
thin$ they need% :sers o e-commerce are not a capt
can be intervie#ed and evaluated li$e the users o
development%
C I l t ti (
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e-Commerce Implementation (co %ac .ffice Systems:
Customers o an online service 1uite reasonably e
response and the bac$ oice systems need to be ab
re1uirement% For a volume e-commerce system this
the customer ront end integrates #ith the IS systems
%usiness Im$lementation
Put in $lace the business infrastructure to su$$o
commerce facility*
#aret the new e-commerce facility to the intended u
C E l ti
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e-Commerce Evaluation
&valuate:
Feedbac$ rom :sers
Feedbac$ rom those #ho gave up
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e-Commerce Evaluation (cont +oo$bac from the evaluation is shown in three levels
Im$rove it:
• Implementing an e-commerce site remains an ineact scien
customers and testing using people not involved in the sit
indicate #here changes are needed> the site can be im$rove
Revise it:
• Business results rom the use o e-commerce may indicate the
e-commerce strategy 8 the implementation plan> the $lanning
/$date it:
• 2evelopments in the competitive position" changes in th
emergence o ne# e-commerce technologies may indicate th
strategic process> the strategy can be u$dated %