12. E-Business Flashcards
What is E-Business?
and
How does it affect strategic Leaders?
E-business / Digital Business is defined as “the transformation of key business processes through the use of internet technologies”.
Strategic leaders need to think about and analyse how technology and e-business will support the businesses objectives, useing the SAF model: -
- Suitability – does e-business support the overall strategy, or does the strategy itself need to change?
- Acceptability – is a new strategy acceptable to stakeholders?
- Feasibility – can we acquire the finances and resources to establish a pricing model.
How can e-business and technology influence and support the strategies of the business?
- Digital business (sales) channel priorities. (Bricks and Click), (shops, websites, mobiles, social media)
- Market and product development strategies. Which products and services should be delivered online and to which target markets? (Ansoff’s matrix)
- Positioning and differentiation strategies. How will the company position its self-online against competitors? (marketing mix)
- Business, service and revenue models. E-business provides an opportunity to innovate and create a new business model. E.g. Amazon, Netflix
- Marketplace restructuring. Technology can change market structures dis/reintermediation (Remove or become a new middleman), counter mediation (established companies setting up their own).
- Supply chain management capabilities. Integrated supply chains.
- Internal knowledge management capabilities. Knowledge management creation and dissemination of knowledge.
- Organisational resourcing and capabilities. Adopting these strategies will require organisational change, which may include the following:
- Strategy process and performance improvement – what are on the business to focus on?
- Structure – where will these capabilities sit within the organisation?
- Senior management buy-in – this is essential for the strategies to be successful.
- Marketing integration – does marketing and tech need to work together.
- Online marketing focus – initiatives needed to exploit the potential of online marketing.
- Partnering with other organisations – what should be outsourced?
Name the stages of a business going online?
How can you apply technology to the value chain of the business?
Management needs to think about
a) linkages between the different activities be improved?
(b) improve the information flow through the primary activities?
(c) Can link be formed with external entities? (supply value chain)
(d) Can IS/IT be used to decrease the cost of any processes?
What are the 6xI’s of e-marketing and how can it be used?
The 6 x I’s summarises the way which can add to customer value and improve marketing
- Interactivity - Traditional marketing is outbound, but with the internet, it tends to be more inbound or two way.
- Intelligence - Web analytics or consumer information can be stored, this allows a business to know the consumer better and the information can be used to improve the company offers.
- Individualisation – Personalised communication or tailored shopping experience.
- Integration – E-Marketing can be used to integrate with other sales channels. E.g. a request for a callback form.
- Industry structure - Can be used to restructure the industry and sales channels.
- Independence of location – a business can deliver goods and services globally.
What’s the difference between an online branding and traditional branding?
and
What types of branding options/strategies can a business take?
Online customers make judgements faster then traditional methods, so a company must have a strong online brand. A company’s entire character, identity, products, and services can be communicated in seconds on the web.
Branding Options
- Domain Name – effective visual identity
- Migrate traditional brand online – Make sense if the brand is already well known, but could risk the reputation of the companies online experience is bad.
- Extend traditional brand –altering the brand image to suit online audiences.
- Partner with existing digital brands – Partnering with other businesses as a joint initiative, one of which can be an established digital brand.
- Create a new digital brand – because a good name is extremely important, some factors to consider when selecting a new brand name are that it should suggest something about the product, be short and memorable, be easy to spell, translate well into other languages and have an available
Define E-procurement
and
What type of options are available?
E-procurement: Is the purchase of supplies and services through the internet and other information and networking systems, such as Electronic Data Interchange (EDI).
Options for implementing e-procurement include:
- - Public Web - e.g Amazon
- - Exchange - e.g Co-part, Suppliers and buyers trade through a third-party open marketplace. They have no structural relationship
- - Supplier Centric - e.g. Dell commercial, An individual supplier gives access to buying organisations for a pre-negotiated product range.
- - Buyer-centric - Individual companies have contracts with several suppliers. The catalogue and ordering system is maintained within the buying organisation.
- - B2B marketplace - e.g. Al-baba, an independent third party has agreements with a number of buying and supplying organisations, this increases the trust in the company and allows companies to deal with new suppliers with very little reputation.
What are the benefits and risks with E-Procurement?
Benefits
- - Cost Reduction
- - Reduced Inventory levels – Just in time buying
- - Improved Control over inventory levels
- - Wider choice of suppliers
- - Improved Manufacturing cycles - e-sourcing speeds up the sourcing process dramatically,
- - Intangible Benefits – staff can better focus on prime functions and increased transparency and accountability
- - Benefits to suppliers – Reduced order processing and admin, improved cashflow and reduced credit control costs.
Risks
- - Control Procedures - if there is a lack of control procedures, it could lead to unauthorised buying.
- - Organisational Risk – In moving to e-procurement tool, the adopting company may have issues with the implementation and consumers may not like using it.
- - Data Security – how is my data being used by suppliers, is it being sold to third parties?
- Management loses spending control. If the purchasing system is placed in the wrong hands.
- - Supply chain problems – if e-sourcing increases the speed of the supply chain, can the rest of the chain keep up with the pace?
How can a business acquire new customers through E-Business Technologies?
- (a) Search engine optimisation
- (b) Newsgroups, Forums and professional reviews
- (c) Newsletters, Mailout campaigns
- (d) Link building and partnership campaigns exchange of links between two sites (Affiliate networks)
- (e) Viral Marketing
- (f) Banner advertising and retargeting.
- (g) Social media influencers
Define sticky customers?
and
How can a business manage its customers, so they return?
‘sticky customers’ customers who will repeat business (this is a crucial goal for many online businesses.)
Managing repeat customers?
- Offering Promotions
- Extranets - allows users to have further access to company data in a controlled way.
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online communities - Types of online communities:-
- Communities of practice e.g Accountingweb
- Communities of circumstance e.g Mumsnet
- Communities of purpose
- Communities of interest
- Communities of geography e.g local issues.
- opt-in emails - email campaigns based on what customers would like to to be notified about. e.g Nike’s next exclusive sneaker drop.
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Data mining
- Predictive - of future outcomes
- Descriptive - identifying patterns and relationships
- Cookies - data packets saved on computers, remember past history on the website. Used to personalise website experiences.
Define innovation? and How can this be a source of competitive advantage?
Innovation: Involves the conversion of new knowledge into a new product, process or service and the putting of this new product, process or service into actual use.
Being the first mover can be a major source of advantage.
- Ability to establish economies of scale before anybody else
- Products or services can become locked in, as the industry standard and comers find the cost of switching unpractical
- The learning (or experience) curve effect may bring cost advantages.
- may gain easier access to scarce resources than followers.
- It can lead to an enhanced reputation.
Late Movers can also be a significant competitive advantage
- imitating technology, usually cheaper than being the pioneer.
- Allows businesses to improve on the pioneer and give a better experience. e.g. Yahoo search left behind by googles simple search page.
How do managers deal with the innovation dilemmas? (How do manager make the choices on how to innovate?)
What is actually driving innovation?
- Technology Push - new R&D creating inventions or capabilities of tech.
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Market Pull - user demands are the source of innovation
- Lead Users - Users who push the tech to the limits and want performance improvements
- Frugal Innovation - invocation is driven to serve poorer communities.
Where the focus of innovation is going to be?
- Product innovation
- Process innovation
How to approach the process of innovation?
- - Closed innovation - development managed internally to maintain secrecy.
- - Open innovation - a collaboration with external Orgs e.g Universaties
- - Opensource/Crowdsource - asking the public to develop service and products e.g Wikipedia or Hyperloop.
What three elements are involved in business model innovation?
A business model: Describes a value proposition for customers and other participants, an arrangement of activities that produces this value, and associated revenue and cost structures.
- - Value Creation - How does the business create value for customers?
- - Value Configuration - The way resources and activities in the value chain are combined?
- - Value Capture - How will the company manage to monetize the products, apportion values to the cost structure and to capture a profit for the business.
Define Disruptive innovation?
How does it affect companies?
How can companies avoid it from affecting them?
Disruptive innovation: Describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves upmarket, eventually displacing established competitors.
Most Innovation is sustaining innovation, defined as improving existing products for current customers. Firms do not respond to brand new technologies focused on different markets, because they are attached to their current business model.
Disruptive firms take current technologies and seek to find a new market use, which they ultimately develop to the point they overtake the pioneers.
e.g - Kodak developed the first digital camera but decided not to move ahead, this created space for competitors to move forward.
There are two ways firms can avoid this:-
- Develop a portfolio of real options. That allows the business to keep their options open.
- Develop new venture units. which develop business models that are separate to the core business.
Define Blockchain?
Blockchain: Is a public form of bookkeeping that uses a digital ledger to allow individuals to share a record of transactions.
it is a type of an incorruptible distributed ledger that allows information to be recorded and shared with a network of individuals. Public nature of blockchain means that every individual can view the transactions made by participants. it means you can view the date, time, value of transactions, and the individuals involved, creating a shared record of events
