2. What Is Strategy
• A strategy consists of a pattern of decisions
that set the goals and objectives that lead to
long run competitive advantages for a firm.
– Undertake a SWOT analysis.
– Determining distinctive competencies.
Determining the competitive arena.
– Develop a plan to reach the business goals.
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3. Definitions:
• A value chain is a way of envisioning the
collection of activities that a business
undertakes to design, produce, market,
deliver, and support products or services.
• The Competitive Arena is the competitive
environment in which a business competes.
• Distinctive Competencies are unique areas
of advantage where a firm can differentiate
itself from competitors.
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4. Steps for Strategy Development
• Undertake a SWOT analysis.
– Evaluate the Strengths, Weaknesses,
Opportunities, and Threats facing a business.
• Determining distinctive competencies.
– Analyze a business’s value chain to help
identify internal strengths and weaknesses that
can help determine how a business can
compete.
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5. Steps for Strategy Development
• Determining the competitive arena.
– Determine the competitive environment in which a
business competes
• Helps set the mission
• Indicates the windows of opportunity to be pursued
• Identifies the competitive environment.
• Develop a plan to reach the business goals.
– Outline the strategic actions and tactics a business must
undertake to move from where and how it currently
competes to where and how it needs to compete given
its distinctive competencies.
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6. Model of Strategy Development
Strategy
Environmental Forces
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Competitive
Threats
Strategic
Drivers
Value Chain
(Strengths &
Weaknesses)
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7. Business Models
• A business model, or commerce model, is
the basic process flow indicating how a
business operates.
• Business process modeling is a systematic
approach to viewing organizations and the
complex relationships that are required to
make the business operate.
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8. Analyzing Business Models
•
Four perspectives:
–
–
–
–
Functional perspectives: identifies the functions
within a business an how they interact.
Behavioral perspective: identifies when and how
functions are performed in a business.
Organizational perspectives: identifies where and
by whom functions are undertaken.
Informational perspectives: identifies what types of
information are identified and how do they flow.
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9. Developing E-Business Models
•
•
Requires a process of identifying the functional process
flows of a business and then modeling how the
application of e-business procedures can result in
competitive advantage.
This requires a six-step process:
1. Identify the functional areas and major player.
2. Indicate how these area are linked and the directions of the flow
process.
3. Determine what e-business tools and techniques can be applied to
the business model.
4. Develop a new e-business model flow.
5. Evaluate the competitive advantages of the model by using a
value chain analysis.
6. Determine the likelihood of acceptance of the new model.
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10. E-BUSINESS STRATEGY
• Low cost and therefore low price
competitor.
– A "frictionless" Internet market implies that
customers have almost perfect information and
can compare prices around the world (by using
intelligence agents to search out the best prices
enhances this process).
• Differentiation strategy by finding a
unique market position against competitors.
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11. Methods of Differentiation
Differentiation
Advantages
Strategy
Gain Speed & This provides a
number of first mover
First Mover
advantages including
Advantages
costs, meeting needs,
lowering risk, and
lower prices.
Gives buyers
Build Brand
assurance when
Name
interacting with a site.
Allows for easy name
recognition.
Disadvantages
Firms need to be
flexible to be fast.
Being first increases
risks and may require
large amounts of capital
to maintain advantages.
Requires a large
amount of capital to
obtain and maintain a
brand name.
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12. Speed and First Mover Advantages
• A pioneering firm has differentiated itself
from competition because it is the first to
enter a competitive arena or it is able help
define the competitive arena.
– Advantages:
• Lower Costs
• Meeting Current Needs
• Lower Consumer Risk Perception
• Charge Higher Prices
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13. Costs Advantages
• May increase the business’ or product's time in a
life cycle, spreading development costs over time
and the number of products produced. Firms that
follow have less time in the life cycle to recover
all costs
• An early entry firm can gain cost advantages
through experience curves and when greater
market shares are obtained they obtain greater
economies of scale.
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14. Meeting Current Needs
• The faster a business can respond to the market,
the more likely that information from areas such
as marketing research will be valid resulting in
actions that could lead to higher market share.
• First, movers have been shown to have a
substantially higher market share than later
entrants. A product that is six months late to
market may miss out on one third of the potential
profit over the product's lifetime.
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15. Consumer Risk Perceptions
• First mover may become the comparison standard for all
rival products by setting the standard for performance.
• Consumers may lower the risk involved in purchasing by
choosing a product with an established image or brand.
• Innovators and early adopters may try first mover products
first and influence others through the diffusion process.
• Advertising and publicity aids in consumer search, but
given the lack of alternative products in many innovative
markets, advertising may have the effect of setting
relevant product attributes the consumer uses in the
evaluation process.
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16. Comparison Standard
and Switching Cost
• A comparison standard is what the customer
uses to judge a product.
– For example, if a customer had first gained their online
search experience with Yahoo!, they will evaluate all
other search engines against Yahoo.
• A switching cost is the additional "costs" involved
in learning something new.
– The costs involved in adopting a new software package
would include the software expense, support, training
costs, and slowed productivity costs.
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17. First and Second Movers
• Being the first entrant into a market does not
guarantee a long term competitive advantage.
A firm must have:
– Expertise, resources, and creativity necessary to
exploit first mover opportunities.
• Pioneers must find ways to forestall or neutralize
the efforts of later entrants or they will not gain
first mover advantages.
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18. Building Barriers
• Entry Into an Industry Can Be Limited by:
– Gaining Economies of Scale
– Cost Advantages
– Developing High Switching Cost
– Brand Names
– Strong Customer Relationships
• Development of Portals
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19. Brand Names
• A brand is a sign, symbol, design, term, name or
combination that allows for easy recognition of a
product or company.
– Brand names often give assurance to the
purchaser because they believe that the risk of
using a brand name is lower.
• Build online brand names by:
– Online and offline advertising
– Ease of navigation and overall experience that a
user has with the Web Site.
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20. Portals
• A portal is an entranceway onto the Internet.
• They are often the preferred starting point for:
– Searches
– Entertainment
– Information,
– Email,
– Or any other Internet based product.
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21. Alliances & Acquisitions
• The creation of an e-business value chain
may come from forming alliances or
through the acquisition.
– Alliances are formal or informal relationships
between independent companies that work
together for a common purpose.
– An acquisition exists when one corporation
purchases all or a controlling part of another
company.
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23. Learning Objectives
•
•
•
•
•
To understand –
Role of backend systems in implementation of ebusiness.
Technological expectations from e-business
framework
Fundamentals of essential technologies as a
background for e-businesses
Internet protocols and their comparison
enterprise middleware management, database
management, and dynamic web programming
24. Backend System Support
Requirements
• e-business needs to continuous change in its
processes and expertise to cope up with
changing technology and customer needs
• It is crucial to be well-acquainted with the web
technology and keep track of new web
developments
• An e-business should possess enterprise
computing and a solitary, completely integrated
information and communication system, which
needs infrastructure / platform / framework at
the back-end that is flexible enough to alter
25. E-business Framework Characteristics
An e-business framework needs to possess
characteristics such as –
- Security
- Flexibility
- Scalability
- Availability
- Adaptability
- Manageability
- Maintainability - Assurance
- Inter-operability
- Load balancing
- Fault Tolerant Systems
26. Internet—Technology
Background
• Allows computers to connect to cell phones,
cell phones to broadband Internet or
wireless Internet etc.
• Build with web services, peer-to-peer
applications, grid computing, etc.
• A broad understanding of WWW
architecture and Internet technologies is
very essential for developing e-business
applications in order to run the business
successfully.
27. The Internet
• An interconnected network of thousands of
networks, which are made up of millions of
computers
• Consists of different types of networks,
physically separate and connected only at
particular points
• Every network connecting to Internet should
follow a set of communication protocols
known as Internet protocols
• Every network consists of nodes and channels
28. Internet Protocol
• A protocol is a set of rules and standards to be
adopted by a system for data transmission on the
network
• Internet protocol is a set of rules and techniques
that are used to transmit data between nodes
over the Internet
• Data are transmitted across the packet switched
network using TCP/IP, which is also known as
an Internet Protocol Suite (IPS)
• These protocols are based on the OSI/ISO
30. TCP/IP Protocol
• TCP/IP is a communication protocol developed
to govern the formatting, ordering, compressing,
and error evaluation of a message on the
network
• It specifies the speed of transmission and the
means that enable network devices to indicate
that the sending or receiving of a message has
been completed.
• TCP establishes a connection between the
sender and the receiver nodes, and ensures that
the packets that are transmitted by the sender
31. IP given to every node on the internet
Address
A unique IP address is
•
• An IP address comprises of a set of four numbers separated
by a ‘.’ e.g. 129.25.0.217
• Each number in this set is between 0 and 255
• First three sets of numbers recognize the local area network
and the last number denotes a specific computer in that
network
• IP addresses are associated with domain name to remember
it easily
• The Domain Name System automatically translates the web
address or the name typed by the Internet users into the
corresponding numeric IP address
32. IP Address Cont..
• A Uniform Resource Locator (URL) is used by browsers to
identify the location of a computer on the web
• URL consists of the protocol to be used when accessing the
address (e.g. HTTP), and followed by its location
• Network Address Translation (NAT) allows an
organization’s Intranet to use a range of IP addresses not
visible outside the company’s Intranet
• Sometimes, one node can have more than one IP address
• Internet Protocol Version 4 (IPv4) can address four billion IP
addresses.
• Internet Protocol Version 6 (Ipv6) uses 128-bit addresses,
which allow address space of 2128 addresses!
34. Other Internet Protocols
In addition to TCP/IP, Internet protocols also
include –
• HTTP
• FTP
• SSL
Few Utility Programs on internet • PING
• TraCert
35. Internet Software
• It is a basic software that runs on every computer / node that
needs to connect to the Internet
• Used mainly to implement Internet protocols
• Can be independent, stand-alone software, inbuilt application
software, or system software
• Web browser is a commonly used software interface to
exchange business information between client and server
• Additional functions are implemented in routers and servers
to allow routings / other processing in the network
• Typical tools used to implement e-business application
software include Java Script, XML, Flash, PHP, Asp.Net, c#,
VB.net, etc.
36. •
Network and System
An appropriate network and system
Administration
administration has become a critical criterion
of success to meet the challenges in an ebusiness.
• A network / system management structure
should –
1.Allow to keep track of every single component
of the network centrally
2.Be able to gather the information from every
part of the network quickly
3.In case of a failure, should be able to correct it
37. 5.
Network and System
Needs toAdministration Cont.. hardware,
handle different types of
software, operating systems, platforms, and
network protocols
6. Be open-ended, that it should be able to add
new organizations and their infrastructure into
the overall infrastructure
7. Address all types of resources, such as
various databases, applications, networks,
systems, etc.
8. Network management and Internet business
system software include OpenView by HP,
38. Security Implementation in e-businesses
• Additional security measures have to be
implemented in internet communication to
maintain privacy, confidentiality,
availability, integrity of e-businesses
• Security attacks are mainly due to wrongly
constructed software, human errors, or
missing processes
• Number of technologies are available to
ensure information security, such as –
• A firewall
39. •
Database Management Systems and
Database on the web server canProgramming
Dynamic Web offer e-business websites a
powerful mechanism to store and retrieve database from
anywhere
• Database can consist of products and services that are
provided by an e-business or a client’s data input through the
website
• Dynamic websites utilize data stored on the web server
• Database management system for implementing dynamic
websites should possess the following characteristics • It should be a multiuser DBMS.
• It should help in supporting a distributed, concurrent
environment.
• It should be secure
41. Learning Objectives
•
•
•
•
•
•
To understand –
Importance of planning a site, its contents and designing
attractive as well as effective business websites
Issues and steps involved in building and launching an ebusiness website
Role of ISP in hosting and maintaining the websites
e-business solutions available in the market and the
selection criterions that best suit the business req.s
Security issues involved in websites
Website traffic tracking and analysing how it helps to take
better business decisions
42. Introduction
• Innovations in the business operations to improve the
services to be provided to the customers
• Continuous updations in business processes to meet the
needs of changing technology
• Success or the failure of an e-business depends on lots
of technical factors
• To start a business, what is needed is high quality,
innovative products / services to offer, innovative
internet marketing strategies by taking advantage of the
state of the art technological advancements
43. Issues involved in designing a
website
• A presence of an organization on the Web
can be established through its website
• The website is known as the ‘visiting card’
of the company in cyberspace
• Websites becoming more and more secure
places to do business and commerce, with
technological advances
• Designing a business website has to be
handled very professionally to attract
valuable customers and retain them
44. In house Website Design
• In-house website design and development has to observe few
customs to utilize advantage of having a business website
• Hire best personnel
• Maintain the balance between aesthetics and technology in
business websites
• Take care of the following aspects as - Ease of navigation,
optimal use of graphics and multimedia, page loading time,
memory usage / requirements, facilities provided on the
website, security issues, ease of purchasing, and ease of
payment
45. In House Design of Website
• Organization needs to buy/own a complete set of website
designing tools, such as HTML editors, image and graphics
software, scanners, and so on
• A readymade software can also be used to readily build ecommerce enabled websites
• There can be a few limitations to use such solutions – All the websites created with such templates may look and
work on similar lines
– They may lose that special and unique touch of the
company
– The level of customization is always limited with such
ready-made tools
46. Steps Involved in Website Development
The complete procedure of getting ready the
website for a self-owned e-business can be
viewed as a sequence of five steps.
• Plan the website, select/ finalize the domain
name, register it
• Design the business website
• Finalize ISP and host the website
• Test it thoroughly
• Promote it and maintain it
47. Deciding the Website Contents
• Most important step in planning for a business website
• Planning the contents should mostly depend on –
– What the customers are interested in
– What the value added services are that should be focused upon
– What the objective behind starting the e-business
– Type of website and so on
• Website contents can be primary and secondary contents
• Interesting contents, attractive graphics, multimedia, news,
statistics attract customers as well as retain them
48. Website Contents
• Website contents should satisfy few requirements, as– the language used should be easy–to-understand
– contents should not be lengthy and verbose
– multiple language facilities should be provided
– Genuine, well-written contents can help the search
engines to locate the website quickly
• Business website contents can be categorized as – Informative Contents
– Interactive Contents
– Multimedia Contents, and
– Software Contents
49. Informative Contents
• Informative contents can be further classified
as –
–
–
–
–
–
–
–
–
–
Product description
Images of the products
Graphs & Statistics
FAQs (frequently asked questions)
News
Reviews
Newsletter
Guest columns
Database etc.
50. Interactive contents
• Interactive contents are top-ups, based on
the basic contents of a website
• Interactive contents include –
–
–
–
–
–
Chat rooms
Message boards
Contests
Polls
Web boards etc.
51. Multimedia Contents
• Multimedia makes websites colourful & interesting
• Allows in conveying dynamic and interactive contents to the
customers
• A very effective means of advertising a business
• The only care that is needed is to check the memory and
bandwidth requirements to view these files
• It includes a variety of media contents that are used together,
such as –
– Audio
- Video
– 3-D graphics - Animation
– Flash media components
52. Software Contents
• Software contents include software
programs which can be downloaded from
the site
• It may include the demos or restricted
version of the software products and give
the customers a chance to try the product
without actually buying it
• Few free types of software can also be made
available for downloading
• These include screen savers, wall papers,
etc.
53. Website Contents Guidelines
The contents on the website • Can be made informative by creatively arranging for the contents
• Should be arranged so that the most important / frequently needed
information can be made available with one-two key strokes
• Should be relevant, accurate, licensed, knowledgeable & innovative
• Should be updated regularly to avoid invalid data on the website
• Generally, the most neglected areas are in the upper left corner and
the lower right corner. The best website contents should be placed
by keeping such points in mind
• Should maintain a balance between the interest of the business and
the interest of the customers as well as information content and
entertainment content
54. Designing the Business Website
• With a clear vision & a solid plan in hand, the task
of designing an e-business website can be started.
• There are two ways to design a business website –
– Designed with the in-house designing team
– Outsource to some web designing company
• A large number of free and paid software solutions
available in the market
• They solutions offer an easy way to build,
maintain and promote the websites quickly and
easily without actually writing any code
55. Internet Service Provider (ISP)
• A company / organization that provides Internet
connection to its customers
• Connections can be dial up, cable Internet, broadband,
Wi-Fi, etc. OR dedicated high-speed internet leased
line connections, Integrated Services Digital Network
(ISDN), DSL, etc.
• Provides space on the web server, allows to use server
software, high-speed Internet connection and other ebusiness features
• Upstream ISP have a larger network & provides access
to the typical ISPs
56. Internet Service Provider (ISP)
Cont..
• To finalize among various ISPs, one can
compare against the facilities they provide –
–
–
–
–
–
–
Email Accounts
Auto Responding Service
FTP or telnet Facility
Mailing Lists
Secure server
Web statistics
57. Internet Service Provider (ISP)
Cont..
• Few criterions against which one can select the most
suitable ISP can be –
– network topology, technology, connection speed
– site availability, shared or dedicated server
– future needs of storage space on the server
– email accounts with the same extensions as that of
the domain names
– technical staff, organization, range of services,
unrestricted site updates or time taken for site
updates
– round-the-clock support, guaranteed availability,
cost calculations, security means supported, etc.
58. Testing the Website
• Websites needs to be tested thoroughly, rigorously, and
exhaustively
• A checklist to test the website before launching – Check whether everything on the site works/loads properly.
– Check that downloading from every link has no problem.
– Read page by page and go through the entire content.
– Check images, graphics are placed / displaying correctly
– One / many items can be successfully ordered using the
shopping cart
– Check whether payments can be done successfully and can
receive the acknowledgement
59. Testing the Website
Cont..
– Check for the loading time of the website with
various types of slow / fast connections
– Check all this on different computers, and even
check for various computer configurations
– Check feedbacks / reviews links working
properly or not
– Whether anybody is able to write, and add to
them
– Everything is working in its predefined way,
even if is being used many a times sequentially
– The website has to be tested again and again,
60. Promote the Website
• Its an essential task of marketing to spread
about the business website among the
people interested in the products / services
• A fully built and thoroughly tested website
has to be added to various search engines,
directories, and guest books
• Use various marketing and advertising
schemes to promote the website
• Needs to be maintained frequently and
regularly to ensure proper functioning of the
business
61. Maintaining the Website
• To maintain the proper functioning of the
business website –
– Frequently visit the website and test it as if
testing a newly designed website
– Check all the links and sub-links to ensure that
no link is broken
– Remove all outdated information as well as
products
– Maintain and update news, newsletters,
reviews, and feedbacks
62. Maintaining the Website
Cont..
– Change the overall look/display of the site once
in a while. It gives a different view to the
visitor
– Stay informed about the new social networks
arriving; and try to get registered there to check
for the latest happenings and accordingly make
arrangements on the website
– Check for the good quality traffic to the
website, and accordingly decide about the
marketing strategies
63. e-business Solutions
E-business solutions are web applications which helps –
• Enable the business organizations to start and operate
all their business as well as monetary transactions
online, using the Internet or internal network
• Quick start-up of an e-business
• Overall operation of the supply chain
• Operating the database centrally and analysing it to
take better business decisions
• Thus reaching to a wider customer base and improve
success rate of the business
64. Advantages of using an e-business
solution
– Easy to use, easy to later upgrade, content wise or
technically, as and when needed
– Provide the tools that help to customize as per
individual needs
– Payment processing tools helps in accepting various
payment modes such as credit cards, debit cards, online
banking etc.
– Facilities, such as customer-of-the-day, etc., can be
implemented easily driving more customer traffic to the
online shop
– Measuring website traffic and other tracking
capabilities help measuring and analysing the success of
65. Selection of Suitable e-business Solution
Solutions available are categorized into two
categories –
1. Solutions for small/medium-sized businesses
2. Solutions for larger/high end businesses
While choosing an e-business solution, certain
aspects can be considered as i. Estimated size of the organization
ii. Allocated budget for the next few months
iii.Estimated sales volume of the business
Cont..
66. Selection of Suitable e-business Solution Cont..
iv. The number and variety of products on sale
v. The set of features to be incorporated, such as shopping
cart, payment accepting options, guest columns,
newsletters, etc.
vi. Back end office integration, database integration
vii. Frequency of updating the website
viii.Multi-language/multiple currency support needed or not
ix. Capability to interface with other organizations, such as
suppliers, financial institutes, customers, etc.
x. Scalability against product range and sales volume
67. Security Issues Involved in Websites
Few important practices which help in keeping the business
website away from electronic crimes • Follow the fundamental security practices, such as assigning
user name / passwords to the regular customers
• Apply encryption to transmit every private and important data
• Insist upon security on every aspect of establishing e-business
and convey that to the technology partners too
• Educate the customers regarding how to use the websites
securely for protection
• Add questions and answers regarding security issues in the
FAQ section of the website
• Always remain fully aware of Internet security issues,
solutions available, and take advantage of them
68. Analysing the Website Traffic
• Visitors to a business website are the key to the success
of the business
• User preferences that are used while surfing the
internet can help in understanding the behavioural
pattern of the site visitors
• Managing, analysing and cautious monitoring this data
in the right way significantly improve further traffic to
the website, revenues
• It can also help in getting an edge over its competitors
• Web traffic analysis software can be used which can
access the logs and create various reports
