Chapter 11:
E-Business Strategy
For use with Strategic Electronic Marketing:
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Copyright 2003 South-Western College Publishing
Chapter 11 Slide: 1
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.
For use with Strategic Electronic Marketing:
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Copyright 2003 South-Western College Publishing
Chapter 11 Slide: 2
LEARNING OBJECTIVES(2):
• List the advantages that a pioneering firm can gain.
• Explain the importance of brand names for ebusinesses.
• Describe the strategic role of portals.
• Identify the alternative competitive arenas where ebusinesses can find opportunities.
• Describe the measures that businesses can use to
judge e-business success.
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Chapter 11 Slide: 3
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.
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Chapter 11 Slide: 4
Microsoft's Internet Strategic Actions:
Purchases/License/Alliances
• 1994 License Spyglass browser
•
•
•
•
•
•
•
technology.
1995 MS invests UUNet.
1995 AOL.
1996 Purchase Vermeer
Technology.
1996 Purchase Colusa Software Inc.
1996 Purchases eShop, Inc.
1996 Purchases Electric Gravity,
Inc.
1996 Sun Microsystems License.
• 1996 AT&T, Netcom,
•
•
•
•
•
MCI, CompuServe
alliances.
1997 Invests in
Realnetworks.
1997 Purchases HotMail
for $400 million.
1997 Purchases WebTV for
$425 million.
1999 Invests in Nextel.
1999 Invests in AT&T.
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Chapter 11 Slide: 5
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.
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Chapter 11 Slide: 6
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.
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Copyright 2003 South-Western College Publishing
Chapter 11 Slide: 7
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.
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Chapter 11 Slide: 8
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.
For use with Strategic Electronic Marketing:
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Copyright 2003 South-Western College Publishing
Chapter 11 Slide: 9
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.
For use with Strategic Electronic Marketing:
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Chapter 11 Slide: 10
Figure 11.1: Model of Strategy
Development
Strategy
Environmental Forces
For use with Strategic Electronic Marketing:
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Competitive
Threats
Strategic
Drivers
Value Chain
(Strengths &
Weaknesses)
Chapter 11 Slide: 11
Table 11.1: Drivers of
Environmental Turbulence
Environmental
Drivers
Technological
change
Changing
customers
Description
Moore's law more power and lower costs is allowing technology to
be applied across a broader spectrum of products and uses.
Customers around the globe accepting Internet use and on-line
purchasing. Individuals are facing time compression and technology
is being used as an enabler to accomplish more. Customers have
increased power due.
Product life cycles are growing shorter due to the rapid development
Shorter
of new technology, aggressive marketing, and a willingness of buyers
product life
to try new products.
cycles
Distance between competitors is vanishing. causing an increase in the
Number of
intensity of competition.
competitors
Need for speed Instant connectivity is becoming the norm in business-to-business
applications as well as in the way that consumers shop.
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Chapter 11 Slide: 12
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
Distribution
Inbound
Logistics
Extranets:
Lowers costs
increase
speed
Value
Production
Differential
Advantages
Customization
Dynamic
Pricing
Management
Leadership:
Management
Intranets: Lower
costs, better
communication.
Innovativeness:
Speed,
flexibility, new
product ideas
E-Business Communication Platforms
E-Business Technological Infrastructure
Marketing/
Sales
E-commerce:
Lower costs,
new market
entry.
E-business
Promotion
Customer
Targeting &
Support
Databases
CRM
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Competitive
Advantage
Through
Stronger
Customer
Relationships
Chapter 11 Slide: 13
E-Business Value Chain (2)
Distribution
Inbound
Logistics
Extranets:
ERP, Lowers
costs increase
speed.
Inbound
Logistics
Extranets:
Lowers costs
increase speed
Value
Production
Differential
Advantages,
Customization
,
Dynamic
Pricing.
Marketing/Sale
s
E-commerce:
Lower costs,
new market
entry.
E-business
Promotion.
Customer
Targeting &
Support
Databases and
CRM. Internet:
Lower costs,
speeds service.
Value
Production
ERP Software
Differential
Advantages,
Customization,
Dynamic
Pricing.
Management
Leadership: Management
Intranets: Lower costs,
better communication.
Innovativeness: Speed,
flexibility, new product
ideas.
Competitive
Advantage
Through
Stronger
Customer
Relationships
Marketing/Sales
E-commerce:
Lower costs,
eases new market
entry.
Provides ebusiness
promotion.
For use with Strategic Electronic Marketing:
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Chapter 11 Slide: 14
E-Business Value Chain (2)
Distribution
Inbound
Logistics
Extranets:
ERP, Lowers
costs increase
speed.
Value
Production
Differential
Advantages,
Customization
,
Dynamic
Pricing.
Customer
Targeting and
Support
Databases:
Enable better
CRM.
Internet:
Lower costs,
speeds service.
Marketing/Sale
s
E-commerce:
Lower costs,
new market
entry.
E-business
Promotion.
Customer
Targeting &
Support
Databases and
CRM. Internet:
Lower costs,
speeds service.
Management
Leadership: Management
Intranets: Lower costs,
better communication.
Innovativeness: Speed,
flexibility, new product
ideas.
Management:
IT leadership:
Encourages
innovativeness,
speed, flexibility,
new product
ideas.
Intranets: Lower
costs, improve
communication.
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Competitive
Advantage
Through
Stronger
Customer
Relationships
Competitive
Advantage
Through
Stronger
Customer
Relationships
Chapter 11 Slide: 15
Figure 11.3: Coca-Cola
E-Business Value Chain(1)
Distribution
Inbound
Logistics
Extranets:
ERP, Lowers
costs increase
speed.
Inbound
Logistics
Extranets:
Links Coke
with bottling
partners and
suppliers.
Value
Production
Differential
Advantages,
Customization
,
Dynamic
Pricing.
Marketing/Sale
s
E-commerce:
Lower costs,
new market
entry.
E-business
Promotion.
Customer
Targeting &
Support
Databases and
CRM. Internet:
Lower costs,
speeds service.
Value
Production
ERP Software:
Links Coke with
its bottling
partners.
Provides
interconnected
management
system.
Management
Leadership: Management
Intranets: Lower costs,
better communication.
Innovativeness: Speed,
flexibility, new product
ideas.
Competitive
Advantage
Through
Stronger
Customer
Relationships
Marketing/Sales
E-commerce:
Cellular linked
vending machines.
Databases: Used
with decision support
systems. Can
determine the
effectiveness of
marketing efforts.
For use with Strategic Electronic Marketing:
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Chapter 11 Slide: 16
Figure 11.3: Coca-Cola
E-Business Value Chain(2)
Distribution
Inbound
Logistics
Extranets:
ERP, Lowers
costs increase
speed.
Customer
Support
Internet:
Provide more
timely
delivery to
trade
customers.
Value
Production
Differential
Advantages,
Customization
,
Dynamic
Pricing.
Marketing/Sale
s
E-commerce:
Lower costs,
new market
entry.
E-business
Promotion.
Customer
Targeting &
Support
Databases and
CRM. Internet:
Lower costs,
speeds service.
Management
Leadership: Management
Intranets: Lower costs,
better communication.
Innovativeness: Speed,
flexibility, new product
ideas.
Management
Leadership:
Intranets: Management
willing to change and sell
ideas.
Intranets: Worldwide systems
improves communication.
Innovativeness: New
approach in the soft-drink
industry.
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Competitive
Advantage
Through
Stronger
Customer
Relationships
Competitive
Advantage
Through
Stronger
Customer
Relationships
Chapter 11 Slide: 17
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.
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Chapter 11 Slide: 18
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.
For use with Strategic Electronic Marketing:
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Chapter 11 Slide: 19
Figure 11.4: Generic Business
Model
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Chapter 11 Slide: 20
Figure 11.5: Generic E-Business
Model
For use with Strategic Electronic Marketing:
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Chapter 11 Slide: 21
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.
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Chapter 11 Slide: 22
Figure 11.6: The Traditional
Higher Education Model
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Chapter 11 Slide: 23
Figure 11.7: The E-Learning
Higher Education Model
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Chapter 11 Slide: 24
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.
Manufacturer
produces
product to fit
retail orders.
Product delivered through shippers to
retail outlet.
Product sits in retail outlet waiting to
be sold and losing value.
Personal sales backed by
national and local
advertising
Increases sales costs.
Customer has
immediate
possession of
product, and can
possibly return
product and
receive support.
Payments are made through
cash, check, credit card or
invoice.
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Chapter 11 Slide: 25
Dell’s Business Model
Suppliers linked
through Extranet
deliver just-in-time.
Lowers inventory
costs.
Dell
manufactures
customized PC
and sells at low
price.
Product delivered through
independent shippers such as UPS.
Contract low shipping rates, no
fixed costs in assets.
Web page provides
information and
ordering.
Lowers ordering
costs.
Customer gathers
information and
purchases through
Web page.
Lowers
communication
costs.
Payments are made online
through Web page credit card or
invoice.
Lowers bad debt expense and
credit risks.
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Chapter 11 Slide: 26
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.
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Chapter 11 Slide: 27
Table 11.2: Methods of Differentiation
Differentiation
Advantages
Strategy
Gain Speed & This provides a
number of first mover
First Mover
advantages including
Advantages
costs, meeting needs,
lowering risk, and
lower prices.
Gives buyers
Build Brand
assurance when
Name
interacting with a site.
Allows for easy name
recognition.
Disadvantages
Firms need to be
flexible to be fast.
Being first increases
risks and may require
large amounts of capital
to maintain advantages.
Requires a large
amount of capital to
obtain and maintain a
brand name.
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Chapter 11 Slide: 28
Table 11.2: Methods of Differentiation
Differentiation
Advantages
Strategy
Allows for economies of
Portal
Development scale and builds barriers to
entry.
Pursue Niche Very good strategy for
smaller or weaker
Strategies
businesses. Allows a
business to focus and
become an expert in one
competitive arena.
Allows businesses to build
Enhanced
barrier to entry. By staying
Customer
Relationships close to customers business
can meet needs better.
Disadvantages
Requires large amount of
capital, pushing off
profitability.
Having only one niche can
be risky because all of the
"eggs" could be in one
basket or with one
customer.
Could result in a loss of
power by the business
supplying the product or
service.
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Chapter 11 Slide: 29
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
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Chapter 11 Slide: 30
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.
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Chapter 11 Slide: 31
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.
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Chapter 11 Slide: 32
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.
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Chapter 11 Slide: 33
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.
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Chapter 11 Slide: 34
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.
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Chapter 11 Slide: 35
First and Second Movers
• Being the first entrant into a market does not
guarantee a long term competitive advantage.
firm must have:
A
– 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.
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Chapter 11 Slide: 36
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
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Chapter 11 Slide: 37
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.
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Chapter 11 Slide: 38
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.
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Chapter 11 Slide: 39
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).
– Determine how differentiated these sites are from each
other.
– Justify AOL’s use of strategic alliances to maintain its
advantages.
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Chapter 11 Slide: 40
Figure 11.9: Top Domains
18%
AOL
5%
4%
3%
70%
MSN
United Online
Earthlink
All Others
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Chapter 11 Slide: 41
Niche Portals
• Niche portals target specific markets
– The number one sport site targeted toward males 11134 is ESPN (www.espn.com).
– IVillage is a site targeted toward women
(www.ivillage.com).
– E*Trade (www.etrade.com) targets individuals
interested in receiving financial information.
– Snap (www.snap.com) offers "rich-media”.
• International portals target international
markets
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Chapter 11 Slide: 42
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.
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Chapter 11 Slide: 43
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.
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Chapter 11 Slide: 44
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.
• Asay Publishing (www.asaypub.com) serves the
used office equipment after-market.
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Chapter 11 Slide: 45
Table 11.3: SME E-Business Strategy Guide
Small and Meduim Sized Enterprise Strategies*i
Strategy
% of
Advantages
Respondents
Over 80% Online systems allow channel members and consumers
Customer
to gain access to product and inventory information.
service
Over 60% This allows SMEs access to larger markets without the
Electronic
cost of setting up new distribution systems and target
commerce
narrow markets faster. Lower overhead costs can be
carried over to lower prices to customers.
Over 50% Online connections between the SME and its customers
Customerincrease the speed of response and allow for close to
relationship
instant communication. Linked Extranets allow SMEs to
management
act as virtual partners with other businesses.
applications
Over 40% SMEs can act as a virtual marketing intermediary linking
B-to-B
larger businesses with very small suppliers. Online
connections
access to inventory and supplies helps control costs.
(extranets)
i
Natalie Engler, “Small But Nimble,” Information Week, January 18, 1999, pp. 57-62.
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Chapter 11 Slide: 46
Low Resource
High Resource
Table 11.4: E-Business Strategy Matrix
Low Differentiation
Characterized by: High brand
name recognition. Large portals
and general e-commerce sites
Keys to success: Heavy brand
name advertising.
Examples: Yahoo,
Amazon.com, Disney, WalMart, Schwab.com.
Characterized by: Low brand
name recognition.
Keys to success: First mover
advantages. Enhance customer
relationships.
Examples: adagio.com,
wine.com, SMEs with Web site
support.
High Differentiation
Characterized by: High brand
name recognition with niche
markets.
Keys to success: Develop vertical
portals. Serve niche community.
Examples: iVillage, VerticalNet,
ESPN.com.
Characterized by: Low brand
name recognition outside of niche
market.
Keys to success: First mover
advantages. Serve niche markets.
Enhance customer relationships.
Examples: Asay Publishing,
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Chapter 11 Slide: 47
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.
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Chapter 11 Slide: 48
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.
For use with Strategic Electronic Marketing:
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Copyright 2003 South-Western College Publishing
Chapter 11 Slide: 49
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 longterm viability and how a company can make a
profit offering this service.
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Copyright 2003 South-Western College Publishing
Chapter 11 Slide: 50
Figure 11.x: Greeting Card Traffic, Valentine’s
Week Traffic (2002 – 21 Million Users)
YahooGreetings
35%
AmericanGreeting.
com Sites
45%
Hallmark.com
20%
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Copyright 2003 South-Western College Publishing
Chapter 11 Slide: 51
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.
For use with Strategic Electronic Marketing:
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Chapter 11 Slide: 52
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
For use with Strategic Electronic Marketing:
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Chapter 11 Slide: 53
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.
For use with Strategic Electronic Marketing:
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Copyright 2003 South-Western College Publishing
Chapter 11 Slide: 54
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.
For use with Strategic Electronic Marketing:
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Copyright 2003 South-Western College Publishing
Chapter 11 Slide: 55
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.
Strengths:
Weaknesses:
Opportunities:
Threats:
• Given this SWOT analysis, propose an e-business
strategy that could be pursued to reach the
opportunity and limit future threats.
For use with Strategic Electronic Marketing:
Managing E-Business 2e
Copyright 2003 South-Western College Publishing
Chapter 11 Slide: 56
Exercise 11.3: Evaluating
Differential Advantages
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Free
Home
Pages
Other
Finance
Weather
Personalization
Shopping
Chat
Games
Sports
Free
Email
News
Major
Portal
Sites
Search
• 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.
Chapter 11 Slide: 57
Exercise 11.4: Strategy Analysis Matrix
• Identify strategic positions of a number of ebusinesses. (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.
Table 8.5: E-Business Strategy Analysis Matrix
High
Characterized by:
Characterized by:
Resource Keys to success:
Keys to success:
Low
Characterized by:
Resource Keys to success:
Low differentiation
Characterized by:
Keys to success:
High differentiation
For use with Strategic Electronic Marketing:
Managing E-Business 2e
Copyright 2003 South-Western College Publishing
Chapter 11 Slide: 58
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.
For use with Strategic Electronic Marketing:
Managing E-Business 2e
Copyright 2003 South-Western College Publishing
Chapter 11 Slide: 59