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Guided tour

2 Strategy and
Part applications
Part introduction Each part of the
In Part 2 of the book approaches to developing e-business strategy book is summarised with a brief list of
and applications are reviewed for the organization as a whole
(Chapter 5), with an emphasis on buy-side e-commerce (Chapters 6
chapter contents and ‘focus on’ issues.
and 7) and sell-side e-commerce (Chapters 8 and 9).
5 E-business strategy p 255
What is e-business strategy? Strategy implementation
Strategic analysis
Focus on …
Strategic objectives Information systems strategy
Strategy definition and e-business strategy
6 Supply chain management p 330 Supply chain Chapter at a glance This
What is supply chain Supply chain management 6
management? implementation management feature summarises the
Options for restructuring the Focus on …
supply chain The value chain
Using e-business to restruc-
ture the supply chain main topics of the chapter
Chapter at a glance Learning outcomes
7 E-procurement p 380 Main topics and the case studies.
What is e-procurement? Focus on … After completing this chapter the reader should be able to:
Drivers of e-procurement Estimating e-procurement What is supply chain Identify the main elements of supply chain management and their
management? 335
Risks and impacts of cost savings Options for restructuring the relationship to the value chain and value networks
e-procurement Electronic B2B marketplaces supply chain 356 Assess the potential of information systems to support supply
Implementing e-procurement Using e-business to restructure chain management and the value chain.
The future of e-procurement? the supply chain 358 Learning outcomes These
Supply chain management
implementation 368 Management issues
Focus on … are set out clearly at the
The value chain 348 The issues for the manager:
Which technologies should we deploy for supply chain
Case studies
management and how should they be prioritized? start of each chapter.
6.1 Shell Chemicals redefines its Which elements of the supply chain should be managed within
customers’ supply chains 341 and beyond the organization and how can technology be used to
6.2 Tesco develops a buy-side facilitate this?
e-commerce system for supply What are the practical issues with online supply chain
chain management 363
management?
6.3 RFID: keeping track starts its
move to a faster track 374 Management issues These
Links to other chapters
Web support The main related chapters are: list the strategic and
The following additional case studies Chapter 1 introduces the supply chain as a key element of
are available at e-business;
www.pearsoned.co.uk/chaffey Chapter 7 considers the e-procurement part of the supply chain in
A short history of the Sainsburys more detail. practical implications of
approach to e-fulfilment models
The telecoms supply chain
The site also contains a range of each topic and case study.
Web support To highlight study material designed to help
improve your results.
additional support material on
Links to other chapters To
the Companion Website.
highlight the connections
between chapters.
Chapter 8 E-marketing 443
Different OVPs can be developed for different products or different segments. For Citibank
UK, the OVP for its Internet banking service is:
Bank whenever you want, from wherever you are. Citibank Internet Banking gives you the
freedom and flexibility to manage your day-to-day finances. It’s secure, convenient and
very easy to use.
Many strategic e-marketing planning decisions are based around the OVP and the quality of
online customer experience delivered by a company. Interactive Web 2.0 features can be partic-
ularly important for transactional sites in that they may enhance the user’s experience and so
encourage conversion and repeat sales. Examples of how companies have developed their OVP
through interactive features include customer reviews and ratings, podcast product reviews, a
blog with customer comments enabled, buyers’ guide and video reviews. Figure 8.13 gives one
example of a company that has put Web 2.0 customer reviews including the capability for cus- Focus on ‘Focus on’ sections
tomers to upload videos and photos at the heart of its OVP. You can read more detailed articles
on developing the OVP through searching at www.davechaffey.com or www.google.com.
Once e-marketing strategies have been developed as part of the e-marketing plan, tactics
need to be implemented to achieve these strategies. These tactics, and in particular the pro- contain more detailed 58
motion or communications tactics, will be informed by the special marketing characteristics Part 1 Introduction
of electronic media. The Focus on section below summarizes some of the key differences
before we review tactics.
coverage of key areas. Mini Case Study 2.1 The Marine Corps demonstrates strategic agility
Professor Donald N. Sull is an Associate Professor of Management Practice on the Strategy and International
Focus on Characteristics of new-media marketing communications Management faculty at the London Business School.
In this section, we explore the main differences between marketing communications in the
traditional media such as TV, print and radio and new digital media such as web sites, inter-
active TV and mobile commerce. This section is based on the summary presented in Chaffey
(2000). Recognizing the differences between the Internet and other media is important to
achieving success in channel promotion and channel satisfaction, and will lead in turn to
positive channel outcomes and profitability.
A useful summary of the differences between the new media and traditional media has
been developed by McDonald and Wilson (1999) as the ‘6 Is’ of e-marketing. The ‘6 Is’ are
useful since they highlight factors that apply to practical aspects of Internet marketing such
as personalization, direct response and marketing research, but also strategic issues of indus- Mini Case Study Extra smaller
try restructuring and integrated channel communications. By considering each of these
facets of the new media, marketing managers can develop marketing plans that accommo-
date the characteristics of the new media. This presentation of the ‘6 Is’ is a new case studies have been added
interpretation of these factors using new examples and diagrams to illustrate these concepts.
1 Interactivity
Deighton (1996) was one of the first authors to explain that a key characteristic of the Inter- to give students more
net was the opportunities that the Internet provided for interactivity. Figure 8.14(a) shows
how traditional media are predominantly push media where the marketing message is
broadcast from company to customer and other stakeholders. During this process, there is
limited interaction with the customer, although interaction is encouraged in some cases examples of e-commerce
such as the direct-response advert or mail-order campaign. On the Internet, it is usually a
customer who initiates contact and is seeking information on a web site. In other words it is
a ‘pull’ mechanism unless e-mail is used (this can be considered as a push technique). Figure within business.
8.14(b) shows how the Internet should be used to encourage two-way communication; these Professor Donald Sull of London Business School talks about
may be extensions of the direct-response approach. For example, FMCG (fast-moving con- Figure 2.2 strategic agility
Source: www.ft.com
sumer goods) suppliers such as Nestlé (www.nescafe.co.uk) use their web site as a method
In the first video tutorial, ‘Fog of the Future’ on strategic agility (visit www.ft.com/multimedia and search for
‘London Business School’), he asserts that traditional management models of creating a long-term vision
are flawed since our knowledge of the future is always imperfect and marketplace conditions are changing
continuously. Rather than being the captain of a ship surveying the far horizon, analogous with the top-down
model of strategy, the reality for managers is that their situation is more akin to that of a racing car driver on
a foggy day, constantly looking to take the right decisions based on the mass of information about their
surroundings coming through the fog. He believes that having a clear long-term vision, particularly where it
isn’t based on environment analysis isn’t practical in most industries. Instead he says that companies should
‘keep vision fuzzy but current priorities clear’. He gives the example of the failure of Microsoft to respond
sufficiently fast to the growth of the Internet.
In a second video tutorial, ‘Strategic Agility’, he explains the basis for strategic agility. He explains that all
knowledge of the future is based on uncertainty, but that managers must act now so they need to put in place
US Marine Corps-style reconnaissance missions as an army would in order to make their battle plans. He gives
the example of Dell, explaining how they spend relatively little on research and development, but are instead
constantly probing the marketplace, trialling new ideas with multiple probes into the approach. He stresses the
importance of finding anomalies in the marketplace where it doesn’t appear as expected and these may repre-
sent learnings or opportunities. Detailed customer insights and business performance are necessary to iden-