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Leverage the wealth of e-business transformational case studies within IBM to highlight the potential of e-business to IBMs customers
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Types of strategy
Strategic planning Strategic response Strategic innovation
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Strategy landscape
Strategy initiation Strategy formulation Strategy implementation Strategy assessment
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Strategy Initiation
First step is to review the organizations business and IT vision and mission Then, a vision and mission for EC can be generated Although these statements are usually very vague, they provide a springboard for generating more specific goals and objectives Begin with industry and competitive analysis
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Industry Analysis
Analyze position of the company in its industry and the competition Required for assessing the changes that EC project may introduce and its chances for success
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Industry Assessment
What industry is the EC initiative related to? Who are the customers? What are the current practices of selling and buying? Who are the major competitors? (How intense is the competition?) What e-strategies are used, by whom? How is value added throughout the value chain? What are the major opportunities and threats? Are there any metrics or best practices in place? What are the existing and potential partnerships for EC?
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Strengths (S)
SO Strategies Generate strategies here that use strengths to take advantages of opportunities ST Strategies Generate strategies here that use strengths to avoid threats
Weaknesses (W)
WO Strategies Generate strategies here that take advantage of opportunities by overcoming weaknesses
Opportunities (O)
Threats (T)
WT Strategies Generate strategies here that minimize weaknesses and avoid threats
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Strategy Formulation
Strategy formulation
Development of long-range plans
Organizations mission
Purpose or reason for the organizations existence
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EC Opportunities
3 common mistakes in allocating EC investment
Let a thousand flowers bloomfund many projects indiscriminately Bet it allput everything on a single high-stake initiative Trend-surffollow the crowd toward the next big thing
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EC Opportunities (cont.)
Approaches to finding individual EC initiatives
Problem-drivenattempt to solve a problem such as:
Excess inventory Delivery delays
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EC Opportunities (cont.)
Approaches to finding individual EC initiatives
(cont.)
All can fail Market-drivenwaiting to see what the competitors will do Fear or greed-driven
Afraid if they do not practice EC they will be big losers Think they can make lots of money going into EC
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Figure 9-5
Approaches for Finding EC Opportunities
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Risk Analysis
Risk analysis program should
Identify all potential risks Assess potential damage Evaluate possibility of protection (insurance) Evaluate cost of protection vs. benefits
E-business risks
Strategic risks (e.g., competitive environment, wrong strategic direction) Financial risks (e.g., currency management and changes, unclear tax situations) Operational risks (e.g., technological changes and use of poor technology, security)
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EC Scenarios
Scenario planning is a methodology used in planning situations that involve much uncertainty, like that of EC (what-if)
Several different scenarios are created A team compiles several future events as possible influences on the outcome Securities are assessed and future projections are made Scenarios are compared
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EC Scenarios (cont.)
Four scenarios described by Hutchinson:
Open, global commerce scenarioremoval of intermediaries flattens the value chain Members-only subnet scenarioapplies mostly to B2B EC Electronic middlemen scenariobusiness and consumer market suppliers can make products/services available through independent third-party distribution channels
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EC Scenarios (cont.)
4 scenarios described by Hutchinson (cont.)
Consumer marketing channels scenario traditional methods collapse into a unified consumer-centric EC medium on the Internet
Broadcasting Advertising Consumer telephony
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Defensive strategies takes place in the firms own current market position as a defense against possible attack by a rival Raise structural barriers Lower the inducement for attack
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Strategic Alliance
Partnership of two or more corporations or business units to achieve strategically significant objectives that are mutually beneficial
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Value-Chain Partnership
A strong and close alliance in which one company or unit forms a long-term arrangement with a key supplier or distributor for mutual advantage
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Implementation EC Plan
Starts with organizing a project team Undertake a pilot project (help discover problems
early)
Implementing EC
Redesigning existing business processes Back-end processes must be automated as much as possible Company must set up workflow applications by integrating EC into existing accounting and financial back-ends
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Searches should not replace in-depth background research Business intelligence companies offer packaged competitive analysis
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Evaluating Outsourcing
Factors to consider:
Ease of configuration and setup Database and scripting support Payment mechanism Sample storefronts Workflow management Documented database support Integration into existing accounting and financial back ends Which services to outsource
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How to coordinate B2B and B2C Selling direct is creating a B2C business Coordination between the two can be done in different ways
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Exploding application requests from various functional areas in the company may follow
Review requirements and design documents Develop thorough checklist Pose a set of questions to assess impact of EC project
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Managerial Issues
Considering the strategic value of EC Considering the benefits and risks Integration is critical Metrics are beneficial Pilot projects are useful Implementing policies and strategies must be written
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