internet strategies for existing firms final1

8/6/2019 Internet Strategies for Existing Firms Final1

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Presented by: Sayli ParingeLei Wang



y What is Business Strategy?

Johnson and Scholes (Exploring Corporate Strategy)

define strategy as f ollows:

"Strategy is the direction and scope of an organisation

ov er the long-term: which achie v es advantage f or the

organisation through its configuration of resources within

a challenging environment, to meet the needs of markets

and to f ulfill stakeholder expectations".



Strategy at Different Le v els of a Business

y Strategies exist at se v eral le v els in any organisation -

ranging fro

m th

eov

erall bu

siness (o

r grou

po

f businesses) through to indi v iduals working in it.

� C orporate Strategy

� Business Unit Strategy

� Operational Strategy



Strategic AnalysisThis is all about analyzing the strength of businesses' positionand understanding the important external factors that may influence that position.

y PE ST

EL

y Scenario P lanningy Five Forces Analysisy Market Segmentationy Directional P olicy Matrixy C ompetitive strategyy C ritical Success Factor Analysisy SWOT



e-commerce

y The Sharing of business inf ormation. Maintaining the

business relationships and conducting the business

transaction by means of internet based technology.

(Poon & S watman, 1999).



electronic commerce

y R etailers bring their Internet strategies many ad v antages in

going online.

I. Becoming multichannel retailers

II. A v ailable resources (financial or in terms of market

knowledge)

III. Minimize the cost

IV. In order f ulfillment and distribution infrastructure

(Doolin et al, 2003).



Strategy is about winning, Internet

Strategy is about winning online.

Source: http:// www. web wings.com.au/internet-strategy.html



Two types of existing firms needs

Internet strategy

y Ne w Firm W ho entering

in a market directly using e-commerce.

y Also known as e-tailers.

y Ex: boo.com

y Existing Firm using e-

commerce as a tool f orenhancing the business.



A two dimensional framework for

companies adopt Internet

technology (Doolin et al., 2003).

1. Channel Management

2. Business Transf ormation



Channel managementy The use of the Internet as a marketing channel to

support and reinf orce existing traditional saleschannels

y The separate de v elopmentof an Internet-based saleschannel, recognizing the different competenciesrequired f or Internet retailing, or to exploit a differentproduct

y The integration of Internet-based sales into theexisting retail operation, prov iding customers with aseamless retail storefront that enables them to mov efrom one channel to another (Doolin et al., 2003).



Business Transformationy Three major approaches

1. E volutionary change2. An experimental strategy

3. R e volutionary change



The c bi ati f ty es f I ter et cha el a agement and

the sc e f business transf rmati n involved

Source: Doolin et al, (2003).



Two comparison case study ta les (1) A lpha Co Beta Co Gamma Co Delta Co

R etailMarket

Apparel ConsumerElectronics

GeneralMerchandise

Groceries

R e v enueNZ $million

100 130 800 1,600

ProductsOnline

600 10,000 600 14,500

ChannelManagement

Integrated SupportIntegrated

SupportSeparate

Separate

BusinessTransf ormation

Experimental

R e volutionary

E volutionary E volutionary Experimental



Internet Strategy: Spectrums for existing

Business



Spin Off

y A separate di v ision, Altogether different entity of

business.

y Able to speed up its decision making.

y Maintain a high degree of flexibility.

y Disad v antageous

y Ex: Barnes and Noble



Strategic Partnershipy Strategic Partnership bet ween R ight Aid andDrugstore.com

y R ight Aid bought 25% od Drugstore.

y Help to promote each other.

y More flexibility to the customer.

y Maintain indi v idual brands and share a huge amount of traffic both

online and in stores.



Joint Venture y Joint Venture bet ween KB to ys (80%) and

BrainPaly.com(20%)

y Kbkids

y Joint v enture with existing e-tailer.

y

Le v erages KB brand name without losing flexibility

y Independent management teams

y Online store prov ide growth and Ph ysical store: Scale.



Exampley Ne w Zealand companies

Group online shopping websites www.grabone.co.nz

www.groupy.co.nz



Exampley Amazon.com

Internet strategy: long tail (Pareto principle or 80-20rule).

Picture from

http:// www.escapethematrix

.net/blog/the-long-tail-

theory/569/



Exampley Protect online trade safety

www.taobao.com

SellersBu yers

he third arty



W h y mov e to the Internet?R easons to not mov e to TheInternet

y Properly applied as a business tool,the Internet has the capability to:y Make y our emplo yees more

producti v e and effecti v ey R educe y our cost of doing

businessy Increase y our competiti v e

ad v antagey Improv e communications within

y our company y Improv e communications

bet ween y our company and itssuppliersy Improv e communications

bet ween y our company and itscustomers

y If y ou do not ha v e a strategy, and just allow the Internet to seep into y our business practice, theInternet can ha v e negati v e

impacts on y our bottom line,because the Internet:y Has a lot of data, but the rele v ant

inf ormation can be hard to findy Can cost a lot of money to get

startedy Can cause people to waste a lot of

time by just surfing the Internety Can allow outsiders to sneak into

y our companys datay R equires skills that y our present

staff may not ha v e

Source: http://management.about.com/library/ weekly/aa022498.htm



Conclusiony Increased integration of clicks and bricks process is inhibited by

business and technology barriers.

y non clear objecti v es f or adopting Internet strategies.

y Technology, social and economic barriers.

y Tends to automate the existing business strategies rather than

replacing.

y Direct or Indirect relations can be f ound bet ween bricks and

clicks.



Activity (Answer the questions)y Handout

y Quiz



Referencey Doolin, B. et al. (2003) Internet strategies f or established retailers: f our Ne w Zealand case studies.

Journal of Information Technology Cases and Applications 5(4): 3-20

y Barnes, D., et al. (2004) Managing the transition from bricks-and-mortar to clicks-and-mortar: abusiness process perspecti v e. K nowledge and Process Management 11(3): 199-209.

y Gulati, R . & Garino, J. (2000) Get the right mix of bricks & clicks. H arvard Business Review 78(3): 107-114.

y Prasarnphanich, P. & Gillenson, M.L. (2003) The h ybrid clicks and bricks business model.Communications of the ACM 46(12): 178-185.

y http:// www.escapethematrix.net/blog/the-long-tail-theory/569

y http:// www. web wings.com.au/internet-strategy.html

y http://management.about.com/library/ weekly/aa022498.htm

internet strategies for existing firms final1

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