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Success Strategies for Electronic Commerce

Success Strategies for Electronic Commerce. e-Business 홍일유 교수. Strategic Opportunities of e-Business. Cost efficiency & speed costs of value chain operations backoffice integration with suppliers: supply chain management frontoffice integration with customers: order entry & processing

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Success Strategies for Electronic Commerce

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  1. Success Strategies for Electronic Commerce e-Business 홍일유 교수

  2. Strategic Opportunities of e-Business • Cost efficiency & speed • costs of value chain operations • backoffice integration with suppliers: supply chain management • frontoffice integration with customers: order entry & processing • Improved customer service • value creation: individualized marketing • convenience: 24-hour access to the company website • Shortened time-to-market • on-line R&D collaboration: Intranet • faster product design e-Biz Strategies

  3. Case 1: Amazon.com • 1995년 Jeff Bezos에 의해 창업된 후, 현재 세계최대 온라인 서점으로 성장 • It sells more than $3 million a day of books/music • In 1999, Amazon.com suffered from a quarterly loss of $323 million on net sales of $676 million • The business is not expected to be profitable until 2001 • Strengths & limitations • Strengths: efficiency (e.g., on-line operations) and customer-oriented service (e.g., content, value, etc) • Limitations: traditional value, weak revenue stream e-Biz Strategies

  4. Case 2: Dell Computer • 1980년대초 UT Austin 대학생인 Michael Dell이 기숙사에서 창업 • “direct sale” model로 기반을 닦은 후, Internet e-Commerce로 성공 • 특히, B-to-B EC의 대표적 성공기업으로 부상 • 인터넷을 통한 컴퓨터 판매가 하루 $12 million에 달함 (1999년 기준) • 매월 매출성장률 20% (#5 PC maker에서 #2 PC maker로 부상) • 인터넷 EC가 Dell사에 제공한 가치: • one-to-one customer interactions [enabled strong customer relationships] • easier and faster access by customers to the needed information [e.g., researching, configuring, ordering, order-status checking, etc.] • improved speed-to-market • cost efficiency, resulting from the improved speed and flow of info. • Dell’s IT Strategy • Internet technology is integrated in the corporate IT strategy. • IT is linked with both suppliers and customers. e-Biz Strategies

  5. Dell의 경쟁력 비결 • A Winner in Speed • 고객이 월요일 오전 9시에 발주하면, 화요일 오후 9시에 배달트럭에 loading • speed 개선으로, 재고를 줄이고 경쟁사에 비해 10~15% 가격 낮게 책정 가능 • Secrets • Custom-ordered PCs don’t sit on the shelf in inventory • Parts are bought when they are needed, reducing costs • Suppliers must be 15 minutes from the Dell factory • Suppliers manage & restock their own inventories • Total systems are assembled by the shipper • Components like monitors never enter a Dell factory • Shape demand by recommending configurations • Selling on the web cut the # people from 700 to 30 • Creating custom home pages for biggest corporate clients e-Biz Strategies

  6. Case 3: Federal Express • 회사 배경 • 세계 택배시장에서 43% 점유 [1998년 기준] • 1980년대부터 정보통신 기술의 혁신적 활용을 통해 강한 고객기반 구축 [운송/물류 최적화] • 1998년 지주회사인 FDX 그룹의 설립 및 JIT 운송관리 시스템업체의 인수를 통해, 전자상거래/공급사슬관리 산업에의 진입을 본격화함 • 주 경쟁사인 UPS와 DHL도 IT업체와의 활발한 전략적 제휴를 통해 계속 추격중 • IT Strategy • Virtual warehousing, electronic commerce, & supply chain management • lower inventory and middleman-related costs, supply chain efficiency, ease of order placement, delivery, procurement, and management of suppliers and customers, and focus on core competencies • Key focus of e-commerce strategy • Allow customers worldwide to place/track an order via the web e-Biz Strategies

  7. Case 4: Cisco • Cisco Connection Online • thousands of documents, features, and services • launched in July 1996, now doing $5M / day • Cisco Marketplace • virtual shopping center to make online purchases of h/w & s/w • Cisco Commerce Agents • speed the process of doing business with Cisco through configuration, pricing, and status agents • Technical Assistance • get online answers to technical questions • easy to find and download software updates • New Marketing Strategies • direct e-mail campaign to key constituents • in-house incentive program for sales reps • Recruiting Online • Hot Jobs markets hard to fill positions • innovative ‘Friends’ ad & matching with new friends e-Biz Strategies

  8. Case 5: Hewlett Packard Empower Key Relationships • HP Parners Online • Targets 10,000 distributors & resellers • Manage cooperative marketing programs • Order HP parts directly online • 24-hour, 365-day access to knowledge base • Electronic Sales Partner • Targets a 5000-person sales force • Over 18,000 current documents • 50 content-rolls per day • 60% of material < 6 months old • Useful hit every 5 seconds • Saves $125 million / year • Electronic Support Center • 15,000 pages of information • 50,000 customers every day • 1 million pages viewed daily • 2 million printer drivers monthly (for downloading) • Manage calls, patches, updates • HP knowledge base e-Services program launched recently e-Biz Strategies

  9. Sample E-Strategies • Make it easy for customers to do business with you • Focus on the end customer for your products and services • Redesign your customer-facing business processes from the end customer’s point of view • Wire your company for profit: design a comprehensive, evolving electronic business architecture • Foster customer loyalty -- the key to profitability in electronic commerce e-Biz Strategies

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