p5: explain the competitive pressures on selected, contrasting business organisations to develop...
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P5:Explain the competitive pressures on selected, contrasting business organisations to develop their use of e-business
M2: Explain how two selected, contrasting business organisations have responded to competitive pressures to develop their use of e-business
D1: Evaluate how successful a selected business organisation has been in preparing for the growing use of e-business
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Trends in internet development Increasing speed, falling costs, rise of social networking, growing
concerns over data security and increasing worldwide internet usage Operational implications of trends on organisations
Customer and user expectations of web access, Increased competition and
New providers for old services eg: music downloads, VoIP, and online shopping
Strategic implications of trends on organisations Competitive pressures, Closures, Mergers, Takeovers, Relocations,
Refocusing of business Organisational adaptations to trends
Strategic level decisions, location of manufacture, location of service provision, re-engineering of business process, redefining of supply chain, investment in information technology, acquisition or development of appropriate skills
Implications of trends on customers Loss of non-internet outlets and services; need for technical literacy to
access full range of services
Lesson objectives
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TRENDS IN INTERNET DEVELOPMENT
Increasing penetration and speedThe internet is a global phenomenon with six
billion usersThe numbers using it grows day by dayIncreased availability and access to the internet
is a major trend that encourages businesses to get online
Still parts of the world where internet penetration – that is, the percentage of the population who have regular internet access – is relatively low
Connection speed are increasing as technology improves, which makes it
even more desirable for businesses and individuals
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TRENDS IN INTERNET DEVELOPMENT
Falling Cost Other factors can encourage greater access
and use of the internet. The cost of broadband connection is falling
Which encourages more people and business to use the web and get more from it
Businesses see opportunities and realize that greater number of people are accessing the web
As costs, speed and reliability continue to improve, the internet evolution is likely to accelerate
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TRENDS IN INTERNET DEVELOPMENT
Activity Global Internet Penetration
The figures for global internet penetration are growing. Do you think that this presents business opportunities? How?
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OPERATIONAL IMPLICATIONS OF TRENDS ON ORGANIZATIONS
1. Expectations and product fulfilment
2. Customer expectations3. Increased competition4. New providers of old services
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OPERATIONAL IMPLICATIONS OF TRENDS ON ORGANIZATIONS
IntroductionDay-to-day running of a business is know
as operational management A number of factors deserve
consideration before a business sets up a transactional websites
Transactional : Buy and Sell These factors all affect the way an
organisation works.
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OPERATIONAL IMPLICATIONS OF TRENDS ON ORGANIZATIONS
1. Expectations and product fulfilment2. Customer expectations3. Increased competition4. New providers of old services
There can be a number of operational implications for
a business that starts to
trade online
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OPERATIONAL IMPLICATIONS OF TRENDS ON ORGANIZATIONS
Expectations and product fulfilment Having a good-quality website can give an
organisation a real advantage over rivalsIt is crucial that the business considers
operational implicationsFor Instance:Does it have the background systems and processes that can meet an increase in demand
Possibly from a worldwide customer base?
This means there must be stock available at all times and online orders have to be fulfilled
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BREAK
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OPERATIONAL IMPLICATIONS OF TRENDS ON ORGANIZATIONS
Customer expectationsConsumers who shop online are quite
demanding They have expectations that a website will
be quick to load in a browser They will want all site links to work and for
the site to have minimum of annoying pop-ups
References to products in catalogues should be up to date and accurate
Prices should be easily available along with terms and conditions
The web shopper also requires a chance to give feedback or view an FAQ page
Finally the online shopper expects privacy and complete security
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OPERATIONAL IMPLICATIONS OF TRENDS ON ORGANIZATIONS
Increased competitionA business that opens up online
immediately makes itself vulnerable to increased competition
Competitors can see entire product range, promotional offers and prices
changesThe online business will be subject to
online price comparisonsOffline businesses will be attempting to
meet and improve upon prices and services
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OPERATIONAL IMPLICATIONS OF TRENDS ON ORGANIZATIONS
New providers of old services In some business organisation there has
been a change caused by the fact that the business is now operating in new markets on the web
Tesco.com for example, now offers music downloads from its website
Further examples of this include New telecommunications services offered through VoIP and the huge growth of online shopping for everything from undergarment to household groceries.
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STRATEGIC IMPLICATIONS OF TRENDS ON ORGANISATIONS
Introduction: The general direction a business takes involves the bigger issuesThese things are not about whetherFor example: To buy paper from one source rather than another, they are about whether to:
Enter new markets Produce new thingsOpen or close premisesRelocate or trade online
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STRATEGIC IMPLICATIONS OF TRENDS ON ORGANISATIONS
Before opening up a new web presence, a business has to consider certain strategic implications. What will be the effect of a big change in direction on that business?
1. Competitive Pressuresa) Prices b) Recruitment
2. Relocations, takeovers, closures and mergers
3. Refocusing business
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Activity
What other competitive pressures do you think are
brought to a business by the internet?
STRATEGIC IMPLICATIONS OF TRENDS ON ORGANISATIONS
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ORGANISATIONAL ADAPTATIONS TO TRENDS
1. Strategic level decisions2. Location of manufacture3. Location of service provision4. Re-engineering of business process,5. Redefining of supply chain6. Investment in information technology7. Acquisition or development of
appropriate skills.
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ORGANISATIONAL ADAPTATIONS TO TRENDS
Strategic level decisions
Strategic decisions at organisational level have a big impact on which direction a business takes and, of course, on whether it succeeds or fails in its marketplace. The Leeds business Card Corporation took a strategy decision based on e-commerce that intended to make full use of internet technology.
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Location of manufacture and service provision:
www.leeds.gov.ukThe Card Corporation website illustrates another
aspect of the Internet.
People can access data and interact with designs from a distance
This means that the potential for online collaboration is significant, as location does not matter.
ORGANISATIONAL ADAPTATIONS TO TRENDS
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Location of manufacture and service provision:
In manufacturing,Global businesses are increasingly giving
consideration as to where is the best location to carry out production activities.
It is often felt that these businesses will relocate only in areas where labour is cheap.
One of the major business functions capable of relocation is customer
services.
ORGANISATIONAL ADAPTATIONS TO TRENDS
A big incentive to do this is the availability of a large local supply of
personnel. The mobile telecoms company. Three Network, offers its
customer service provision from India.
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Location of manufacture and service provision:
Some businesses adopted an e-commerce website Outsourced their customer service functionExample:Kingfisher Group’s DIY.com outsourcing product
enquiries and customer service to another company called Spark Response, at Follingsby Park, Gateshead Customers surfing to www.diy.com placed an order.
Made an enquiry or a request and all of these were dealt with by Spark Response
personnel, although there were also B&Q managers on site.
ORGANISATIONAL ADAPTATIONS TO TRENDS
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Re-engineering of business process: The re-engineering of business processes
is a systematic method of examining everything a business does, from top to bottom.
Why are particular processes done?What is the reason for them?
Are they still needed?
ORGANISATIONAL ADAPTATIONS TO TRENDS
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Redefining the supply chain: Supply chains differ for different
products. A supply chain for the factory:
ORGANISATIONAL ADAPTATIONS TO TRENDS
The Internet allows firms working together in a supply chain the chance to become
much closer in the ways they work. There can be a process of *disintermediation where distributor or wholesalers are no
longer needed. The supply chain becomes integrated and shorter. Ideally, customers
benefit.
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Investment in information technology:Obviously, businesses must invest in IT if they
are to succeed in making productive use of the opportunities from e-business.
This investment can include:1. Hardware and software requirements2. Security issues to consider3. Website design and maintenance4. Network technologies to weigh up
ORGANISATIONAL ADAPTATIONS TO TRENDS
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Acquisition and development of appropriate skills:
If a business is to go ahead with an e-business strategy, it is even more important that its employees are IT literate.
Many employees can learn on the job by training at their desk.
IT contractors can train staff as part of the initial contract.
IT contractor will be consulted with staff users before a computer system is implemented
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ORGANISATIONAL ADAPTATIONS TO TRENDS
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Acquisition and development of appropriate skills:
One of the methods by which a business could become more prepared for e-business
Is By
Setting up individual Personal Development Plans (PDPs)
For Staff
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ORGANISATIONAL ADAPTATIONS TO TRENDS
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Acquisition and development of appropriate skills:
The following sections and questions need to be answered in designing a person’s PDP.
Objective – what do I want the staff member to be able to do, or do better?
Success criteria – how will I measure how successful they have been?
Actions – what actions will I take to get them to achieve the learning objectives in the plan?
Implementation – how will I get the staff members to implement the things they have learned?
ORGANISATIONAL ADAPTATIONS TO TRENDS
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Loss of non-internet outlets and services Need for technical literacy to access full range of
services
The Internet offers great opportunities for those who have the skills and understanding, or the cash, to be able to take advantage.
For those who do not have such opportunities, there is disadvantage.
Many people, mostly those already poor or socially disadvantaged in some other way, cannot or do not
have access to the new technologies and the opportunities they bring.
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IMPLICATION OF TRENDS ON CUSTOMERS
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The ‘socially excluded’ – are said to be on the wrong side of the ‘digital divide’
Because they lack the technical literacy skills to access the range of full digital
services available to others.
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IMPLICATION OF TRENDS ON CUSTOMERS
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Income, education and age are the biggest factors in creating the digital divide, according to a European Union report (‘e-inclusion revisited: the local dimension of the Information Society’).
It reveals that women are taking to technology in greater numbers than ever, and the over-55s are also gaining computer skills.
But poor, badly educated people are still lagging behind.
IMPLICATION OF TRENDS ON CUSTOMERS
Those who do not have Internet access are the ones with the most to
lose if high street businesses are forced out of operation.
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Activity 1. Research the report ‘e-inclusion revisited:
the local dimension of the information Society’ (you can find a link to this on www.einclusion-eu.org) Summaries its findings and write a report offering your own conclusions.
2. ‘Poorly educated people have no chance of accessing the Internet properly’. Do you agree with this statement? Explain your response.
IMPLICATION OF TRENDS ON CUSTOMERS
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Thank You:
You have completed P5, M2, & D1
If you have any queries\questions, ask your instructor