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Chapter 5 E-business strategy 281

From the review above, it should be apparent that the extent of the threats will be depend-
ent on the particular market a company operates in. Generally the threats seem to be greatest
for companies that currently sell through retail distributors and have products that can be
readily delivered to customers across the Internet or by parcel. Case Study 5.1 highlights how
one company has analysed its competitive threats and developed an appropriate strategy.

Co-opetition

Jelassi and Enders (2008) note that while the five forces framework focuses on the negative
effects that market participants can have on industry attractiveness, the positive interactions
that competitors within an industry can have a positive effect on profitability. Examples of
Co-opetition interactions encouraged through co-opetition which Jelassi and Enders mention include:
Interactions between
competitors and Joint standards setting for technology and other industry standards. For example, competi-
marketplace tors within mobile commerce can encourage development of standard approaches such as
intermediaries which can
mutually improve the 3G which potential customers can be educated about and to make it easier to enable
attractiveness of a customer switching.
marketplace.
Joint developments for improving product quality, increasing demand or smoothing
e-procurement. For example, competing car manufacturers DaimlerChrysler, Ford and
General Motors set up Covisint, a common purchasing platform (Chapter 7).
Joint lobbying for favourable legislation, perhaps through involvement in trade associations.

Competitor analysis

Competitor analysis Competitor analysis is also a key aspect of e-business situation analysis, but since it is also a
for e-business key activity in producing an e-marketing plan which will feed into the e-business strategy;
Review of e-business
services offered by this is also described in more detail in Chapter 8.
existing and new
competitors and adoption Resource-advantage mapping
by their customers.
Once the external opportunities and internal resources have been reviewed, it is useful to
map the internal resource strengths against external opportunities, to identify, for example,
where competitors are weak and can be attacked. To identify internal strengths, definition of
Core competencies core competencies is one approach. Lynch (2000) explains that core competencies are the
Resources, including resources, including knowledge, skills or technologies that provide a particular benefit to
skills or technologies,

that provide a particular customers, or increase customer value relative to competitors. Customer value is defined by
benefit to customers. Deise et al. (2000) as dependent on product quality, service quality, price and fulfilment
time. So, to understand core competencies we need to understand how the organization is
Customer value
differentiated from competitors in these areas. Benchmarking e-commerce services of com-
Value dependent on
product quality, service petitors, as described in Chapter 8, is important here. The cost-base of a company relative to
quality, price and its competitors’ is also important since lower production costs will lead to lower prices.
fulfilment time.
Lynch (2000) argues that core competencies should be emphasized in objective setting and
strategy definition.

Strategic objectives

Strategic objectives Defining and communicating an organization’s strategic objectives is a key element of any
Statement and strategy process model since (1) the strategy definition and implementation elements of
communication of an
organization’s mission, strategy must be directed at how best to achieve the objectives, (2) the overall success of
vision and objectives. e-business strategy will be assessed by comparing actual results against objectives and taking
action to improve strategy and (3) clear, realistic objectives help communicate the goals and