The document discusses e-business strategy and how it differs from traditional business strategy. It provides models for developing an e-business strategy, including analyzing the strategic situation, defining objectives, evaluating options, and implementing strategies. Examples are given of companies developing new online products and services. The key is integrating e-business strategy with existing business and IT strategies to pursue opportunities and stay competitive in a changing business environment.

1. OHT 5.1
E-business Strategy
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2. OHT 5.2
Learning objectives
• Follow an appropriate strategy process model
for e-business;
• Apply tools to generate and select e-business
strategies;
• Outline alternative strategic approaches to
achieve e-business.
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3. OHT 5.3
Issues for managers
• How does e-business strategy differ from
traditional business strategy?
• How should we integrate e-business strategy
with existing business and IS strategy?
• How should we evaluate our investment
priorities and returns from e-business?
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4. OHT 5.4
How does e-business strategy differ from
traditional business strategy?
• In the one-to-many hierarchical information
flow that characterized the Industrial Age,
information flowed one way, from the producer
to the consumers. The Internet has changed
this in three important ways.
– the Internet allows consumers to talk to
consumers
– consumers can find and access information
much easier than before
– enables the information flow to be reversed so
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customer-centric companies can pull

5. OHT 5.5
Michael Porter on the Internet
• ‘The key question is not whether to deploy
Internet technology – companies have no
choice if they want to stay competitive – but
how to deploy it.’
Porter, M. (2001) Strategy and the Internet,
Harvard Business Review, March 2001, 62–78.
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6. OHT 5.6
Different forms of organizational strategy
Figure 5.1 Different forms of organizational strategy
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7. • Corporate Strategy – What business should
OHT 5.7
you be in? Looks at the whole range of
business opportunities
• Business Strategy – Battle plans, tactics
used to fight the competition in the industry
that your company currently participates in
(see Competitive Strategies and Competitive
War Games)
• Functional Strategy – Operational methods
and value adding activities that you choose for
your business (venture strategies, technology
strategies, diversification strategies, marketing
strategies, differentiation strategies, etc.)
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8. OHT 5.8 Relationship between e-business
strategy and other strategies
Figure 5.2 Relationship between e-business strategy and other strategies
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9. OHT 5.9 A generic strategy process
model
Figure 5.3 A generic strategy process model
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10. OHT 5.10 Dynamic e-business strategy
model
Figure 5.4 Dynamic e-business strategy model
Source: Adapted from description in Kalakota and Robinson (2000) © Marketing Insights Limited 2004

11. OHT 5.11 Elements of strategic situation
analysis for the e-business
Figure 5.5 Elements of strategic situation analysis for the e-business
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12. OHT 5.12
What happens where there is
no e-business strategy?
• Missed opportunities for additional sales on
the sell-side and more efficient purchasing on
the buy-side
• Fall behind competitors in delivering online
services – may become difficult to catch up,
e.g. Tesco, Dell
• Poor customer experience from poorly
integrated channels
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13. OHT 5.13 Adoption steps of e-business
services
Figure 5.6 Adoption steps of e-business services
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14. OHT 5.14 Summary applications portfolio
analysis for the B2B Company
Figure 5.7 Summary applications portfolio analysis for The B2B Company
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15. OHT 5.15 SWOT analysis for the B2B
company
Figure 5.8 SWOT analysis for The B2B Company
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16. OHT 5.16 Customer demand for e-marketing
services for The B2B Company
Figure 5.9 Customer demand for e-marketing services for The B2B Company
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17. OHT 5.17 Competitive threats acting on
the e-business
Figure 5.10 Competitive threats acting on the e-business
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18. OHT 5.18
Porter’s five forces
Bargaining
powers of
customers
Power of Threat of of
Threat
The business
suppliers subsitutes
substitutes
Extent of rivalry
Threat of new
between
entrants
competitors
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19. OHT 5.19
Activity – Impact of Internet
• For one of the industries below, assess how
the Internet has changed the competitive
forces, e.g. has it increased or decreased
power of suppliers and customers?
• Industries:
– Banking
– Supermarkets
– Oil industry
– Rail industry
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20. OHT 5.20 Elements of strategic objective
setting for the e-business
Figure 5.11 Elements of strategic objective setting for the e-business
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21. OHT 5.21
Direct and indirect Internet
contributions for fast growth companies in the US
Figure 5.12 Direct and indirect Internet contributions for fast-growth companies
in the USA
Source: PricewaterhouseCoopers (2000) © Marketing Insights Limited 2004

22. OHT 5.22 Grid of product suitability against
market adoption for transactional
e-commerce (online purchases)
Figure 5.13 Grid of product suitability against market adoption for transactional
e-commerce (online purchases) © Marketing Insights Limited 2004

23. OHT 5.23 Elements of strategy definition for
the e-business
Figure 5.14 Elements of strategy definition for the e-business
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24. OHT 5.24 Strategic options for a company in
relation to the importance of the
Internet as a channel
Figure 5.15 Strategic options for a company in relation to the importance of the
Internet as a channel © Marketing Insights Limited 2004

25. OHT 5.25 Assessment of risk for market and
product development for the B2B company
Figure 5.16 Assessment of risk for market and product development for The
B2B Company © Marketing Insights Limited 2004

26. OHT 5.26
New product development – Smile online banking
(www.smile.co.uk)
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27. OHT 5.27 Dabs.com (www.dabs.com)
Figure 5.18 Dabs.com (www.dabs.com)
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28. OHT 5.28 Elements of strategy
implementation for the e-business
Figure 5.19 Elements of strategy implementation for the e-business
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