Strategic Planning for EC

1. Strategic Planning for EC

2. The strategic Planning Cycle • Industry & Competitive Analysis • Strategy Formulation • Implementation • Performance Assessment, Strategy reassessment

3. Industry & Competitive Analysis • Monitor, evaluate and disseminate information from external and internal environments • Identify critical factors that will determine success • SWOT analysis MATRIX

4. Strategy Formulation • Examine\Redefine the corporate mission Develop strategies • Set Implementation Guidelines

5. Examine\Redefine the corporate mission • by specifying achievable objectives • measurable • what does the company intend to achieve?

6. Develop strategies • Must be clear and not superficial • People, organisation, processes and technology

7. Develop strategies (cont) • A value chain approach • Relationship Marketing • ROI & Risk Analysis • Critical Success Factors • Four EC Scenarios • Competitive v’s Cooperative • Competitive Intelligence on the Internet

8. A value chain approach • Clarify Value Chain Statements • Create New Values

9. Clarify Value Chain Statements • Can I realise significant margins by consolidating parts of the value chain? • Can I create significant value for customers by reducing the number of entities they have to deal with in the value chain? • What additional skills do I need to develop in order to take over the functions of others in my value chain? • Will I be at a a competitive disadvantage if someone else moves first to consolidate the value chain?

10. Create New Values • Can I offer additional information regarding transaction services to my existing customer base? • Can I address the needs of new customer segments by repackaging my current information assets or by creating new business propositions using the Internet? • Will my current business be significantly harmed by other businesses providing some of the value that I currently offer? • Will my current business be significantly hared by other companies providing some of the value I currently offer on an a la carte basis?

11. Relationship Marketing • Differentiation by superior service at the point of contact with the customer • customer acquisition • customer retention • customer extension • customer selection

12. ROI & Risk Analysis • ROI = ratio of cost of resources required to the benefits generated • Includes both quantifiable and non-quantifiable items • Non-quantifiable items • effective marketing channel • increased sales • increased customer service • competitive advantage • organisational design • organisational learning

13. ROI & Risk Analysis (Cont) • Risks • technological • inherent in business reorganisation • demographic changes

14. Critical Success Factors • Top Management support • cross functional teams • technical infrastructure • customer acceptance • user friendly web interface • Integration with legacy systems

15. Critical Success Factors (cont.) • security and control of the EC system • pilot project • corporate knowledge • promotion and internal communication • cost • level of trust between buyers and sellers

16. Critical Success Factors (cont.) • Specific product or services traded • Does the business have a product that is a good candidate for EC? • Can the business develop new products for EC? • How can I use the information I have about individual customers to make it easier for them to do business with me?

17. Critical Success Factors (cont.) • Specific product or services traded (cont.) • What help can I give customers by using the experience of other customers or the expertise of my employees? • Will I be at a significant disadvantage if my competitors provide these capabilities to customers before I do?

18. Four EC Scenarios • Open Global Commerce Scenario • Members Only Subnets Scenario • Electronic Middlemen Scenario • New Consumer Marketing Channels Scenario

19. Competitive v’s Cooperative • A competitive strategy assumes fighting against all competitors for the purpose of survival and to win • A cooperative strategy plans for working together with specific competitors to gain advantage against other competitors.

20. Competitive Strategies • Frontal assault • attacks competitor in all areas • the attacker must have superior resources and a willingness to persevere • Flanking manoeuvre • attacks where the competitor is weak • attacker must be patient and willing to carefully expand

21. Competitive Strategies (cont.) • Raise structural barriers • full product lines • switching costs • low entry costs • Lower the inducement for attack • lower the expectation of profits by attackers

22. Cooperative strategies • Joint venture • pooling of resources • new, separate entity formed • involves loss of control • Value chain partnership

23. Steps to maximise success • Education and Training • Review Current Distribution and Supply Chain Models • Understand What Your Customers and Partners Expect From the Web • Re-evaluate the Nature of Your Products and Services • Give A New Role to Your Human Resources Department • Cross Functional Job Descriptions • Establish Corporate Intranet \ Internet Policies

24. Steps to maximise success (cont.) • Extend Your Current Systems to the Outside • Track New Competitors and Market Shares • Develop A Web-centric Marketing Strategy • Participate in the Creation and Development of Virtual Market Places • Instil EC Management Style • Constant environmental scanning

25. Competitive Intelligence on the Internet • Review Competitors Web Sites • Analyse Related News Groups • Examine Publicly Available Financial Documents • Corporate Research Companies • Solicit Opinions in Chat Rooms • Interactive Customer Questionnaires • Avoid Over Reliance • Push V’s Pull Information Technology

26. Set Implementation Guidelines • Pilot Project • Uncover Specific EC Opportunities and Applications • Create Web Team • Evaluate Outsourcing • Web site design • Assessment

27. Uncover Specific EC Opportunities • Brainstorming • Consultants • Vendors • Review Competitors • Literature

28. Create Web Team • Transformational Leadership • Define Roles • Assign Functional Skills to Subprojects • Cross Functional Staffing • Documentation

29. Evaluate Outsourcing • Cost • Expertise • Benchmarking against vendors other clients • Loss of control • Core competencies

30. Assessment • Measure • Collect information • Re-evaluate • Recommence planning cycle

31. Collect information • Staff • Customers • Suppliers

32. Re-evaluate • Did it deliver what it was supposed to • Is it still viable in an ever changing environment • Reassess initial strategy to learn from mistakes and strengthen advantages • Identify failing projects ASAP and determine reasons for failure • Identify control and administrative issues

33. Change Management

34. Need for Change Management • Environment is always changing • Change is Natural • 70% of IT projects fail

35. Change does not occur in isolation Task Technology People Structure

36. Stages of Change • Unfreeze Present Behaviour • Creating motivation and readiness for change • Change the organisational system • Enabling people to see things differently and react differently in the future • Re-freeze • Ensuring that the new behaviour will be secure against reversion

37. The Managing Change Model (Siegal) Evaluating Change Managing the people side of change Managing the organisation side of change Planning change Individual response to change General nature of change

38. Critical Success Factors • Executive Support • Transformational Leadership • Communicating the Vision • Inspiring • Sound Implementation Strategy • Transition Management Team • Moral authority • Legal authority

39. Critical Success Factors (cont.) • Trust • Communication • Recognise Resistance • Normal • Understand sources and motives • May derive benefits from the dysfunction • Maintain personal homeostasis • Reflects poorly upon past performance

40. Critical Success Factors (cont.) • Ownership • Empowerment • Monitoring • Feedback