E commerce strategy


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E commerce strategy

  1. 1. ISSN 1822-6515 ISSN 1822-6515EKONOMIKA IR VADYBA: 2011. 16 ECONOMICS AND MANAGEMENT: 2011. 16 THE MODEL OF E-COMMERCE STRATEGY FOCUSED ON CUSTOMERS Zuzana Němcová1, Jiří Dvořák2 1 Brno University of Technology, Czech Republic, nemcova@fbm.vutbr.cz 2 Brno University of Technology, Czech Republic, dvorak.j@fbm.vutbr.cz Abstract Contribution covers the strategic management of electronic commerce in the company and focuses primarily on customers. This area is to explore the issue of electronic commerce and a comparison with the use of existing e-commerce strategies in companies. Also important will be how to do a survey of the entire company, and how the company decides to obtain information not only about the market, but also internal affairs. Among the research results include will properties of corporate strategy and informative description of properties, which are based on a commercial (business), corporate strategy and corporate quality strategy or other strategies respectively documents were received and processed by the company (the companys vision, mission, business, etc.). The company should benefit from current information technology, approved by senior management of the company, and enforce them to implement it to get all the company staff. The strategy must be constantly at certain intervals to assess and adapt to current customer needs. On the issue of customers build models that will be addressed in the paper. Of course, the aim of these models is the market analysis, identifying needs and requirements. The result of solving this problem is the creation of a model where the selected dynamic processes are examined. Addressing of the strategic management of e-commerce in the company, is focused primarily on customers. This paper aims to analyze a model of e-business, focusing on customer needs. The result of solving this problem is the creation of a model where the selected dynamic processes are examined. Target contribution will therefore be primarily addressing the development and use of e-business model strategy and customer focused. Given the contribution of specific targets and ways of implementing them will be used in the processing of not only the general research methods (analysis and synthesis, induction and deduction, the method of feedback) but also specific methods (modeling, data mining for analysis of the collected data.) Should not be taken lightly, that e-commerce is only a tool that improves existing ways trading a impact on the structure of the company, market and competitive environment. Includes changes in consumer behavior and suppliers and this alone should justify a revision of current strategies. Determine whether the company should propose a new strategy for his involvement in commercial markets or leave unchanged the existing strategy, or simply extend existing strategies offer e- commerce. This survey includes the advantages and disadvantages of adopting e-commerce strategy and modeling and for many aspects of business. The study results show how the model responds to feedback in terms of sensitivity and stability study, which is a prerequisite for the successful resolution of the two strategies, both firms and customers. Further research must be pursued in this area, particularly if they are generated by a new study for e-commerce in enterprises. Keywords: e-commerce, e-business, consumer strategy, strategic planning, crisis, marketing, product, services, e-trading, model of e-business. Electronic commerce, strategy, technology, marketing, e- Marketplace, Business to Customer, Business to Business. JEL Classification: C52, C67, L21, M 15. Introduction More and more businesses are using the Internet to carry out business and to market, buy and sellproducts and services to a wider audience. E-commerce, e-business and e-trading are terms used to describebusiness on the Internet. What is different about this type of trade is that much of the communicationhappens between computers and there is usually no face-to-face or verbal contact between customers and thebusiness. The Internet provides a valuable new form of communication and is a growing source ofinformation that can help people make decisions (for example, where to find information and advice aboutrunning the business or the latest developments in technology and which product to buy). Business Strategyand E-Commerce Introduction with the rapidly advancing technologies that are occurring in modernbusiness, organizations are required to be ready, and able to adapt within their ever-changing environment. Itis true across all diverse industries that in order to stay competitive, organizations must be able to utilize thevarious tools that technology has to offer. Technological factors have been of growing importance,particularly in recent years. A major factor involved in these technology issues is the use of the Internet as amajor issue to modern organizations. The Internet has been rapidly growing since its inception and is nowcommonly used in all sectors of societies, in all corners of the globe. The Internet has quickly become one ofthe most valuable assets in modern technology, and as such, is developing as an integral part of modern 1292
  2. 2. ISSN 1822-6515 ISSN 1822-6515EKONOMIKA IR VADYBA: 2011. 16 ECONOMICS AND MANAGEMENT: 2011. 16commerce. As with past technologies, the Internet will have future technological advances develop from itsown growth. Realize future opportunities and threats, and base a strategy accordingly. This paper aims to create a model of e-business, focusing on customer needs. The result of solving thisproblem is the creation of a model wher the selected dynamic processes are examined. Addressing of thestrategic management of e-commerce in the company is focused primarily on customers. It is very importantto make a survey of the entire company, to learn its business decisions and obtaining information not onlyabout the market, but also in internal affairs. Among the results belong the characteristics of companystrategy and information characterization, which are based on a commercial (business) corporate strategy andcorporate strategy quality, or other strategies. The strategy is continually evaluated at certain intervals andadapted to current requirements. Using MATLAB software an economic model of electronic commerce isdesigned. For the actual model Simulink as a special toolbox for modeling cybernetic systems is used. Headings Electronic commerce is an important form of marketing and communications, which offers a verywide range. His major actions with positive characteristics include great flexibility, low installation costs.This area has great potential, especially if it is part of the traditional e-commerce business.Implement the strategic direction of the engine to activate the enterprise, and deals, in particular productivity.(Keřkovský, Vykypěl, 1998) In the application management model should be paid attention to customersatisfaction, information quality, process capability to adapt to rapid change, education and manual skills ofemployees. The development of electronic commerce not only reduces shopping time, but also brings newpossibilities of information technology in-house. Increasing customer requirements for product demand, itgives rise to new products, which significantly contribute to rapid return on investment. Recently,significantly increased the activity of companies engaged in the creation of software, amusing, or to helpfocus on solving customer problems and issues. (Donát, 2000). Develop e-commerce customer-oriented, beable to gain customers and quality and flexibility to meet their obligations to them and retain customers, isthe most difficult of business activities both in the virtual environment of the Internet and in the real world.The retail and online store that is especially true, it is necessary to react flexibly to any changes occurring inthe market place. It is necessary to constantly monitor prices and be able to offer competitive and flexible tosuch changes and react very quickly. The biggest incentive is the possibility to implement a strategy forfuture development and need to grow your business. When creating e-commerce is necessary to constantlybear in mind the principle that, despite its simplicity, the process more pleasant shopping. ( Roberts, E.B.2004). Figure 1. -Business Strategy & Planning Among the first patterns of how the strategy is included in the most widely used model of B2C. Forthe purpose of understanding the meaning, the term B2C imagine a software application on the web sitewhere customers can select products, view and also order and buy and then by trading opportunities and pay.It is a similar shop in the traditional form of trade. If the trader sells goods or services, this form of 1293
  3. 3. ISSN 1822-6515 ISSN 1822-6515EKONOMIKA IR VADYBA: 2011. 16 ECONOMICS AND MANAGEMENT: 2011. 16commerce suitable supplement. At a fundamental level, one of two options. Either entity sells through retailchains (an indirect sale) so you can establish a single and direct sales through electronic commerce. In thelatter case, the company owns its store and will put you in addition to expansion and electronic commerce.(Fredericks E. 2005). Another option is a B2B model, which also intersects the strategy. This is a classictrade between firms. Currently, however, becoming one of the most progressively growing segments ofelectronic commerce. Thats because it is closely connected with the use of the Internet as a tool forfacilitating communication in the marketing chain. The core is essentially a B2B database, to which can beaccessed via the Internet and a simple interface - a commercial application (Dvořák. 2004), a businesspartner who accesses this virtual space has its conditions under which trade can take place. Businessapplications are then able to respond to any changes in business relationships, such as the size of a closedshop. Of course there is an automatic order processing and inclusion in scent-company information system. Itis connected to each other cooperating modules (such as inventory management, procurement module ofmovement, etc.). The system can automatically track the status of goods in stock and automatically ordersubcontracted items are low and it is choosing the best terms and prices. Some B2B solutions to enable theentire process through a built-ordinate logic tied to the manufacturer so that the requirements of thedistributor may directly influence the product being manufactured. The result is certainly eye-catching cutcosts. The smaller part of them involved the reduction of administrative burdens, but much more favorable tothem reflect inventory optimization and low cost of capital. Estimates of operating cost savings range fromfifteen to fifty percent. Also significant is the contribution consists in finding new business partners, whichmeets the comfort of new trade routes, and not forgetting the opportunity to create a loyal customercommunity. (Ash, C.G., & Burn, J.M. 2003). Described and most widely used trade models e-business are tested and evaluated as described instrategy linkages economic methods. Figure 2. Reference model for e-business Planninghttp://www.softwaremag.com/archive/2001feb/images/E-businessPlanning.jpeg Referring The mentioned system is composed of the subsystems, which are not exhaustive in description of thebehavior. This is not an accurate description of the behavior of particular subjects. The identification itself isin the middle of Economics a difficult task. The MATLAB software contains several toolboxes that makework easier by modeling of particular subsystems. Neural networks, fuzzy sets, etc. can be used. The simplest way to address these needs, is to map the dynamic properties of a strategy and todetermine the transient response. In cases in which it is impossible to get re-course characteristics, thefrequency response can be used. The acquirement of it is more difficult. To obtain the transient response ofregulated system an abrupt change in the so-called action variables and fall is used. The response of theregulated system - the course of the controlled variable - is measured. From this step response can be 1294
  4. 4. ISSN 1822-6515 ISSN 1822-6515EKONOMIKA IR VADYBA: 2011. 16 ECONOMICS AND MANAGEMENT: 2011. 16obtained the possibility to determine the quantities characterizing the dynamic properties ¬ degradingstrategies such as - for example - time and speed of adaptation response to new conditions. In the case of the frequency response a harmonic signal is applied to the input of investigated member.The model examines in which extent the steady state of response by selection of goods Unit jump can beseen for example as a reaction to the news in the market. An entry into the model depends on the needs andrequirements of the customer due to his understanding, A strategy of purchase follows. Transmissionproperties of individual subsystems, in particular customers demands, should be expressed as a result of thestatistical examination of the two segments (ie, production and customer needs). This approach characterisesa new point of view on the possibilities how to model the needs of the strategic management of e-commercein the company. Analysis of the data is one of the most difficult activities consisting of several stages andusing various, especially method. Pro initial statistical analysis and data processing were used MicrosoftExcel. Findings of the statistical date processing is an important factor in the decision-making model.According to the proof or rejection will be admitted either as an input into the model or not. Scale, which Iwill present them in a model derived from the strength of their dependence on the model.Firm to succeed in the strategic management of e-commerce should follow the recommended strategies andrealize that a significant part of company information, which is one of the key sources of its long-termprosperity. Therefore, they should be considered employees of the company the most valuable part of thedecision-making strategy. It is necessary to lay the question of how all workers are familiar with theprinciples of the art information technology and marketing practices of these technologies. The decision doesnot lose the importance of the treatment strategy of the principles. The management company must focus onobtaining broad support for the implementation of all prepared for ordinary employees-fir us.It is necessary to comply with the consistent implementation of company strategy as it was scheduled to beput to work and serve us effectively. Among other prerequisites of successful strategy is reasonable when thecompany invests heavily in developing an information system that not only spend money on hardware andsoftware, but also to educate and train staff in information that will be required to implement thefunctionality of the entire strategy and comply with international Standards for the information system. The proposed model describes the behavior of consumer and company by transfer function of the firstorder. Transfer functions of consumer´s subsystems and subsystems of the company have only a demonstration transmissions. It is not a case where the behavior of these subsystems are precisely identified. Figure 3. Simplified model depicting the involvement of a time lag (Source: Own processing ) General description of the blocks used • Step (pulse input) The element that generates a step signal of the change from zero to one or to a demanded value. In 1295
  5. 5. ISSN 1822-6515 ISSN 1822-6515EKONOMIKA IR VADYBA: 2011. 16 ECONOMICS AND MANAGEMENT: 2011. 16 the economic model, this element generates a signal of the customer who has already chosen the company (business) and runs the whole model. • Transfer Function (Customer / Company) A part of the model, which defines the behavior of a firm and a customer, using transfer functions. When creating a model, the behavior description of several options, such as neural network and fuzzy logic, can be used. • Summation The element that ensures the implementation of the feedback. • Time Delay The element that creates a time delay. In this model it realizes the waiting time of the company before a modificatio of offer according to customer needs starts. • Scope Element, which graphically shows the changes of the parts of the whole model that depend on time. Priority is given to the customer, restrictive terms of production values in this business segment for theproducts in the menu to meet customer requirements are described. This model has the transfer functions in asimplified form to be able to examine how consumers can influence the dynamics in terms of production,how rapidly production can be adapted to customer requirements.Graphs show the behavior of a cybernetic model of electronic commerce in various stages. Stocks represent apart of a system variables, depending on the time. The amount of the customers must be assessed on the basisof system throughput. For the companys strategy it is complicated to satisfy customers needs by electroniccommerce in real time. Modelling based on analysis of test problem is the first specification to an economicmodel. The model allows the formulation of words pop theoretical assumptions and findings. Afterexamining the model is mathematically speci-fied and transformed into a deterministic mathematical modelof Economics. Addictions entering the model is mathematically formulated by economic variables, whichallow the next phase of the model to quantify the measured data. Quantification is based on the modelparameter estimation, which determines the intensity and direction of the interaction of variables involved.After estimating the following verification that the estimated parameters are consistent with the underlyingtheoretical assumptions. The result is an application variables in the model. Evaluation is a practical use ofmodel for analyzing the question under consideration. Based on the results of testing the model is modifiedand improved. (Spirko, Krupka, 2008) Conclusion The system created by using MATLAB software and toolbox SIMULINK creats an economic systemmodel of e-commerce focused on the customer´s feedback. The aim of the company is, by using feedback, toadjust its current offer to customer requirements. The system does not address the customer´s choice of thecompany. It only enables the company offer specification and reduces the difference between customerdemand and company offer. The problem of economic systems is the large number of measurable andunmeasurable inputs and sensitivity to the changes in initial conditions. It is important to quantify the systemto the sufficient extent. The created model allowed the description of subsystems of the company and of thecustomer by transfer functions of the first and second order. On this level of the description complexity, thesystem has settled down in real time and the company has found a common plane with the customer tooptimize the offer/ supply. On the higher level of the description complexity of the behavior, the system hasbegan to show instability. The economic systems should be quantified enough for mathematical modelling.The system works only with model descriptions of company and customer behavior. Further precising ofvaluation of this model can be achieved by application of neural networks and fuzzy logic to identify thebehavior of firms and customers. The model shows the combination strategies can be stable, but only for low complexity of the systemthen becomes unstable. The model was created by a time delay, which was introduced by a member of thetransport delay, which represents the exponential expression e-ts. This time delay is a member of theparticular characteristics of the controlled system. Characteristics of the controlled system are described in arelationship which includes an exponential function. The customer leaves the so-called footprint, of whichthe company then evaluates the appropriate strategy. A customer leaves feedback for the adaptation strategy 1296
  6. 6. ISSN 1822-6515 ISSN 1822-6515EKONOMIKA IR VADYBA: 2011. 16 ECONOMICS AND MANAGEMENT: 2011. 16based on the needs of existing customers. It is necessary to quantify the economic system that has thestability of the model. Also, there must be to filter data from an economic point of view, that the safetysystem. Should not be taken lightly, that e-commerce is only a tool that enhances the existing ways of doingbusinessand impacts on the structure of the company, market and competitive environment. Includes changesin consumer behavior and the contractor and this alone should justify a revision of current strategies.Determine whether the company should propose a new strategy for his involvement in commercial marketsor leave unchanged the existing strategy, or simply extend existing strategies offer e-commerce. This surveyincludes the advantages and disadvantages of adopting e-commerce stretegy and modeling and for manyaspects of business. Since e-commerce has the potential to change the competitive environment, allparticipants in the business market, which could be affected by e-commerce. A framework for analyzing theimpact of marketing information and applies to most companies that need e-commerce strategy, includingthe business case for their participation in commercial markets. The study results show how the model responds to feedback in terms of sensitivity and stability study,which is a prerequisite for the successful resolution of the two strategies, both firms and customers. Firmbehavior and the customer is required to quantify a certain level in order to stabilize.With the passing of time, the model becomes unstable. Testing this model have been identified other generalquestions that would be useful to specialists for further research. Further research must be pursued in thisarea, particularly if they are generated by a new study for e-commerce businesses. References1. Ash, C.G., & Burn, J.M. (2003). A model of e-business transformation. Inf Technol Organ Trends issues challenges solutions, 2:266–9.2. Fredericks E. (2005). Infusing flexibility into business-to-business firms: a contingency theory and resource-based view perspective and practical limitations. Ind Mark Manage, 34, 555–65.3. Ghandour, F.A., & Swartz, P., & Grenek, HM., & Roberts, E.B. (2004). E-business transformation via alliance clusters. Technol Anal Strateg Manag, 16,435–55.4. Keřkovský, M., Vykypěl,O. (1998) Strategické řízení – teorie v praxi. 1. vyd, PC-DIR, spol. s r. o. Brno. 172 s. ISBN 80-214-1111-25. Špirko Š, Křupka J (2008) Základy technickej kybernetiky. Akademia ozbrojených síl generála M.R. Štefánika. Liptovský mikuláš. s. 286. ISBN 978-80-8040-375-76. Donát, J. (2000) E-business pro manažery. 1.vyd.Praha: Grada Publishing,. 84 s. ISBN 80-247-9001-77. Dvořák J. (2004) Elektronický obchod. Skripta VUT v Brně, FP..ISBN 80-214-2600-4.8. Frimel, M. (2002) Elektronický obchod, 1. vyd. Praha: Prospektrum, 321 s. ISBN: 80-7175-114 1297
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