CHAPTER 14
Presented By:
Samar El-Haddad
Menna Hatem
Dina El-Haddad
Raghda Essam
E-Commerce Strategy and Global EC
Agenda
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Organizational strategy: concepts and
overview Business planning in E-commerce
E-Commerce strategy : concepts and overview
E-Strategy initiation
E-Strategy formulation
E-Strategy implantation
E-Strategy and project assessment
Global E-Commerce
E-Commerce in small and medium - sized enterprises
Organizational Strategy: Concepts and
Overview
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Strategy: A broad-based formula for how a
business is going to accomplish its mission, what its
goals should be, and what plans and policies will
be needed to carry out those goals.
Strategy is also about making tough decisions about
what not to do.
Organizational Strategy : Concepts and
Overview
develop
Customers,
market,
competition
Vision
guide
Strategy
create
Tactic
Products,
Services
N
Organizational Strategy: Concepts and
Overview
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Vision
Your vision is an idealized state for your life and/or
business. It is the big picture of what you want for
the future and encompasses your mission, values,
goals and objectives.
Mission
Your mission is the nuts and bolts of the vision.
Mission is the who, what and why of your business
(or personal) existence.
Organizational Strategy:
Concepts and Overview

E-commerce strategy (e-strategy)
The formulation and execution of a vision of how a new
or existing company intends to do business
electronically
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Strategic information systems planning (SISP)
A process for developing a strategy and plans for
aligning information systems (including e-commerce
applications) with the business strategies of an
organization
The Strategic planning Process
Strategy
Initiation
Strategy
Assessment
Strategy
Formulation
Strategy
Implementation
Strategic planning process
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•
Strategy initiation: The initial phase of strategic
planning in which the organization examines itself
and its environment
Value proposition: The benefit that a company’s products
or services provide to customers, the consumer need that
is being fulfilled
Strategic planning process (cont.)
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Outcomes from strategy initiation phase
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Company analysis (including value proposition)
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Core competencies

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it refers to the unique combination of the resources and
experiences of a particular firm.
Forecasts
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include the vision, purpose, value proposition, capabilities,
constraints, strengths, and weaknesses of the company.
Identify business ,technological, political ,economical and other
trends that are currently affecting the business or might affect it in
the future.
Competitor (industry) analysis

Scanning business environment to collect information about direct
, indirect and potential competitors.
Strategic planning process (cont.)
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Strategy formulation: The development of strategies to exploit
opportunities and manage threats in the business environment in
light of corporate strengths and weaknesses
Specific activities and outcomes from strategy formulation
phase:
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Business opportunities
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Cost-benefit analysis
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It depend if the initiation has been done well several scenarios will be
observes .
any opportunity must be assessed in terms of cost and benefit to the
company, it could be financial or non financial or short-term or longterm.
Risk analysis, assessment, and management
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Any initiative EC project have a risk, this risk should be analyzed,
assessed and managed.
Strategic planning process (cont.)
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Strategy implementation: The development of detailed, shortterm plans for carrying out the projects agreed on in strategy
formulation
Specific activities and outcomes from strategy implementation
phase:
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Business planning
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Resource allocation
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Setting specific project objects creating project schedule and setting
measurable performance targets
Determined what are organizational recourses including humans
,financial, etc…
Project management

Putting life to the EC project through hiring stuff purchasing equipment
licensing and so on
Strategic planning process (cont.)
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Strategy assessment: The continuous evaluation of
progress toward the organization’s strategic goals,
resulting in corrective action and, if necessary,
strategy reformulation
The Strategic Planning Process
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Strategic Planning Tools
SWOT analysis
A methodology that surveys external opportunities and threats
and relates them to internal strengths and weaknesses
competitor analysis grid
A strategic planning tool that highlights points of
differentiation between competitors and the target firm
scenario planning
A strategic planning methodology that generates plausible
alternative futures to help decision makers identify actions that
can be taken today to ensure success in the future
Balanced scorecard
a management tool that assesses organizational progress
toward strategic goals by measuring performance in a number
of different areas.
Business Planning in E-Commerce
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Business plan
A written document that identifies the company’s goals
and outlines how the company intends to achieve those
goals
Outline of a business plan
Executive Summary
 Business Description
 Operations Plan
 Financial Plan
 Marketing Plan
 Competitor Analysis
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Business Planning in E-Commerce
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Business Plan Fundamentals
 Purposes
for business plan
 To
acquire funding
 To acquire nonfinancial resources
 To obtain a realistic approach to the business

business case
A business plan for a new initiative or large, new
project inside an existing organization
E-Commerce Strategy : Concepts and
Overview
E-Strategy Initiation
The organization prepares the initial steps needed for
starting the cycle.
Initial steps:
 Renew the organization’s vision and mission.
 Analyze organization’s industry, company
 Consider initiation issues.
Issues in E-Strategy Initiation
Be a first Mover not a Follower
Opportunities
Risks
Make first and lasting impression
on customers
High cost of pioneering EC
initiation
Make Strong brand recognition
Make mistakes
Success
The size of opportunity
The nature of the product
Whether the company can be the best in the market
Determining Scope
When determining scope, the organization considers:
The number of products it sells.
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The most efficient way to expand the scope to introduce new
products into existing market without increase production
facilities or staff.
Have a separate online company?
Separating company’s online operations into new
company.
Advantage
Disadvantage
Reduction/Elimination of internal
conflicts.
Very costly, risky or both
More freedom for online company’s
management in pricing
New company will not benefit from
expensive & spare capacity
Ability to create new brand quickly
Have a separate online brand?
A company faces a similar decision when deciding
whether to create a separate brand for its online
offering.
Example
E-Strategy Formulation
In strategy formulation, the firm must decide which initiative to
implement & in what order.
Activities:
Selecting EC opportunities, productive strategy selection
approach can be used.
o Problem-driven Strategy: may be best when an organization
has specific problem that an EC application can solve.
o Technology-driven Strategy: occur when a company owns
technology that it needs to use.
o Market-driven Strategy: can occur when company waits to see
what competition in the industry do.
Determining an Appropriate EC
Application Portfolio
The BCG Model (Boston Consulting Groups)
The model used to show the growth-share matrix.
2. An Internet Portfolio Map for Selecting
Applications
The Internet portfolio map is based on company fit
and project viability.
1.
Cont’d
Internet Portfolio Map
Viability of Project
High
Low
Sell
project
Adopt
project
Reject
project
Redesign
project
Company Fit
High
Risk Analysis and Management
•
e-commerce (EC) risk
The likelihood that a negative outcome will occur in
the course of developing and operating an electronic
commerce strategy
E-Strategy Implementation
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The execution of the strategic plane takes place in
the Strategy Implementation phase, in which
detailed, short-term plans are developed for
carrying out the projects agreed on in the strategy
formulation.
Decision makers evaluate options, establish specific
milestones, allocate resources, and manage the
projects
Cont’d
Create a Web Team
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Carefully define the roles and the responsibilities of
the team leader, team members, webmaster, and
technical staff
project champion :The person who ensures the EC
project gets the time, attention, and resources
required and defends the project from detractors at
all times
Cont’d
Start with a Pilot Project
Pilot projects help uncover problems early, when the
plan can easily be modified before significant
investments are made
Cont’d
Allocate Resources
 Resources depend on the information requirements
and the capabilities of each project.
 Some resources will be new and unique to the EC
project
Manage the Project
Variety of tools , Microsoft project determining project
tasks, milestones, and resource requirements
DFD can help
Strategy Implementation Issues
 Application
development
Number of decisions of whether to build, buy, or
outsource various construction aspects of the application
implementation process face the company
 Partners’ strategy
 outsourcing
The use of an external vendor to provide all or part of the
products and services that could be provided internally
Cont’d
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Business alliances and virtual corporations
- B2B e-marketplace
- Virtual corporation (VC)
An organization composed of several business partners
sharing costs and resources for the production or utilization
of a product or service
o Permanent,temporary
- co-opetition
Two or more companies cooperate together on some
activities for their mutual benefit, even while competing
against each other in the marketplace
Cont’d
 Redesigning
business processes
 business
process reengineering (BPR)
A methodology for conducting a comprehensive redesign of
an enterprise’s processes
Is the analysis and design of workflows and processes within
an organization
 Business
process management (BPM)
Method for business restructuring that combines workflow
systems and redesign methods; covers three process categories
people-to-people, systems-to-systems, and systems-to-people
interactions
E-Strategy and Project Assessment
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The Last phase of e-strategy begins as soon as the
implementation of EC application or project is complete
The Objectives of Assessment
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Measure the extent to which the EC strategy and ensuing projects
are delivering what they were supposed to deliver
Determine if the EC strategy and projects are still viable in the
current environment
Reassess the initial strategy in order to learn from mistakes and
improve future planning
Identify failing projects as soon as possible and determine why
they failed
Cont’d
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Each company measures success or failure by different set of
standards
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One way to measure a project's performance is to use metrics
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Measuring Results and Using Metrics
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Metric
A specific, measurable standard against which actual performance is compared
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Corporate (business) performance management (CPM, BPM)
Advanced performance measuring and analysis approach that embraces
planning and strategy
Is a set of management and analytic processes that enable the management of
an organization's performance to achieve one or more pre-selected goals.
Cont’d
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3.
4.
The Major steps of the process:
Setting goals and objectives
Establishing initiatives and plans to achieve those
goals
Monitoring actual performance against the goals
Taking corrective action
Cont’d
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Web analytics
The analysis of clickstream data to understand
visitor behavior on a Web site
It is often done without the permission or knowledge
of the user, in which case it becomes a breach of
web browser security.
Global E-Commerce
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Benefits and Extent of Operations
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The major advantage anywhere of the global EC are the
ability to do business at any time, from anywhere, and at
a reasonable cost
Barriers to Global EC
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Despite the benefits and opportunities offered by
globalization, there are many barriers to global EC.
We will use (CAGE) framework to identify areas in
which barriers hinder global EC.
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Cultural Issues
Administrative Issues
Geographic Issues
Economic Issues
Culture Issues
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Doing business globally requires cultural marketing to
meet the needs of a culturally diverse population.
 Language
 Information
formatting
 Time standards
 Currency
Administrative Issues
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One of the most contentious area of global EC is the
resolution of legal issues.
International trade organizations attempt to reduce EC
trade barrier in areas
 Pricing
regulation
 Customs
 Import/Export restrictions
 Tax issues
 Product specification regulations
Geographic Issues
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The geographic issues of shipping goods and
services across international borders are well
known.
Barriers posed by geography differ based on the
transportation infrastructure between and within
countries and the type of product and services
being delivered. ( geographic distance is almost
irrelevant with online software sales )
Economic Issues
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Economic and financial issues in global EC include
government tariffs, customs and taxation.
 EC
electronic payment system
 Pricing is another economic issue
Global E-Commerce
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Breaking Down the Barriers to Global EC
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Be strategic
Know your audience
Localize
Think globally, act consistently
Value the human touch
Clarify, document, explain
Offer services that reduce barriers
EC in Small and Medium-Sized Enterprises
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Critical Success Factors for SMES
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Product is critical
Payment methods must be flexible
Electronic payments must be secure
Capital investment should be kept to a minimum
Inventory control is crucial
Logistics services must be quick and reliable
High visibility on the Internet
Join an online community
A Web site should provide all of the services needed by consumers
Key Points
Questions
Thank you 