Activity answers 5.1 Selecting an e-business strategy process model 1. (a) : Strategy is based on thorough environment analysis, clear statement of vision and objectives, emphasizes the feedback loop necessary for control. 2: Implies protracted, non-responsive strategy development which is not sufficiently dynamic. Strategy development process is not emphasized. (b) : Highlights detailed elements of analysis and strategy development 2: Doesn’t highlight sequence in process. Importance of objective setting and control not emphasized. (c) : A dynamic responsive model that highlights the importance of continuous environment scanning in e-business. 2: Doesn’t emphasize the detailed strategy development elements of (a) and (b). 2. Study of the four models suggests that the following elements are significant: One: Continuous internal and external environment scanning or analysis are required. Two: Clear statement of vision and objectives required. Three: Strategy development can be broken down into formulation and selection. Four: After strategy development, enactment of the strategy occurs as strategy implementation. Five: Control is required to detect problems and adjust the strategy accordingly. In addition, the models suggest that these elements, although generally sequential, are also iterative and require reference back to previous stages. 5.2 Using Portfolio and SWOT analysis to inform e-business strategy at The B2B Company Suggested priorities: P1 – Sell-side e-commerce – transactional web site – Electronic catalogue for standard products – this for smaller business customers. Bespoke orders for larger customers less appropriate via the web site. P2 – Buy-side e-commerce – procurement, stock control and distribution. Reference to Chapter 1 shows that the company already has an ERP system, however, this is based on a software application which needs to be installed on each desktop. It is also has EDI links to suppliers rather than Internet-based EDI links. These facilities could be upgraded to offer a browser-based access to the system. This would offer some efficiencies, but the upgrade to the ERP system can wait until the transactional web site is complete. P3 – Inside e-commerce – HR and Finance systems – these are not strategic although they should give rise to efficiency and cost savings. 5.4 E-business strategies for The B2C Company In brief, it can be suggested that the first three strategies apply to most organizations, and in particular to B2C organizations. The attack e-tailing and defend e-tailing approaches do not have to be mutually exclusive and can be applied to most commodity products such as books, holidays and records. However, it is arguable whether a purchaser of kitchenware in the B2C case would be that price sensitive. In this case the emphasis on trust leading to loyalty as suggested by the defend e-tailing approach would be most relevant. 5.5 E-business investment types 1. You will notice that the categories are not mutually exclusive. (a) E-procurement system. This is an operational system, but as will be shown in Chapter 8, the potential cost savings are such that this could also be considered to be a strategic value investment. (b) Transactional e-commerce web site (Chapter 9). This is a customer facing system which if it increases the customer base of a company can be considered to be a strategic value investment. Within the e-business era, it can be thought of as a threshold investment to remain competitive. (c) Contract with ISP to provide Internet connectivity for staff. An infrastructure investment, with elements of threshold investment and operational investment. (d) Workflow system to manage complex customer orders (e.g. processing orders). This may appear to be an operational investment, but since it is a customer facing system that should improve customer service, it can be viewed as a strategic value investment. (e) Upgrading a company network. An infrastructure investment. If you think it is unrealistic to decide on just two investments, this is a genuine problem faced by many companies. An information system manager at a regional airline described how they had an applications backlog numbering more than one hundred of which only 20 or so could be funded immediately. The eprocurement system and transactional web site are clearly the best strategic value investments.