IT6305 e-Business Applications eCommerce Business Strategies

Upekha Vandebonaupe.vand@gmail.com

Strategic Management Process Strategy - a course of action,

including the specification of resources required to achieve a specific objective.

Concerned with the Decisions Enhance the Competitiveness

Scope

TimeCost

A Strategy

“Based on current performance in marketplace”

“Defines how we will meet our objectives”

“Sets allocation of resources to meet goals”

“Selects preferred strategic options to compete within a market”

“Provides a long-term plan for the development of the organization”

No e-Strategy?

Missed Opportunities Inappropriate Direction Isolation of information in different

systems. Resource wastage

eBusiness Strategy Development Step by Step

Planning• e-

Business strategy

• Implementation plan

Implementation

Operation

Planning

What type of eBusiness?

Why you want to developthat type of e-business ?

How to develop the

chosen eBusiness type?

eBusiness

Strategy

Implementation Plan

Propose Your Future Situation Should be specific (time and figures)

Profit Oriented (Improve Revenue Models)

Cost Oriented (Be efficient) Client Oriented (Improve customer

services)

“Increase revenue by 30% in 2 years”

“Reduce cost by 20% in 1

year”“Increase client satisfaction by 50%

in 2 years”

To be a First Mover rather than a Follower?

ADVANTAGES Chance to capture

large markets Establishing a

brand name Exclusive strategic

alliances

DISADVANTAGES High Cost Chance of failure is

high System may be

obsolete No support services

at the beginning Competitors may

follow the strategy quickly

SWOT Analysis

Internal Factors

Strength

Weaknesses

External Factors

Opportunities

Threats

(2009 - 2015) Case Study is given to carry a SWOT Analysis

SWOT Analysis

What is your business sector? Who are the customers? What are the current practices of selling

and buying? Who are the major competitors?

How intense is the competition? What e-strategies are used, by whom? What are the existing and potential

partnerships for developing e-Business?

SWOT Analysis for a General Organization

Opportunities Easy Accessibility for global

market New trends Availability of B2B market

places

Threats Competitors

Strength Original product Popular product Reputation for high

quality

Weaknesses Lack of IT

expertise No WEB presenceIn

tern

al

Fact

ors

Exte

rnal

Fa

ctor

s

SWOT Diagram

Strength (S) Weaknesses (W)

Opportunities (O)

SO StrategiesGenerate strategies

here that usestrengths to take

advantages ofopportunities

WO StrategiesGenerate strategies

herethat take advantage

ofopportunities by

overcoming weaknesses

Threats (T)ST Strategies

Generate strategieshere that use

strengths to avoidthreats

WT StrategiesGenerate strategieshere that minimizeweaknesses and

avoid threats

InternalExternal

What should consider when joining with an eBusiness Portal

Benefits? Costs? Limitations? Marketing? Infrastructure? (Sell side & Buy side) Which portal to join?

Identify Organization’s PositionSurvival -Companies in deep trouble

and need re-engineering, they have no choice.

Sustainability - Not yet in trouble, but, has the foresight to see trouble coming. They need to be proactive.

Growth - Ambitious and aggressive. Reengineering is an opportunity to further their lead over the competitors.

Critical Success Factors which give the Competitive Advantage

Effective BusinessProcesses

Hig

h Q

ualit

y

On

tim

e D

eliv

ery

Com

peti

tive

Pr

icin

g

Hig

h Pr

oduc

tivi

ty

State-of-the-Art Technology

SWOT Analysis

Cost – Benefit – Risk Analysis

Porter’s 5 Forces

Analysis

ûVirtual Colloboration

Business A

Information

Business B

Information

Business C

Information

Virtual Organizat

ion

Customer

Customer

Customer

For SME, is it difficult to trade internationally? When a small company plans to import or export

products for the first time they often face a range of complicated procedures, regulations, legislation and other barriers.

Small companies with 5-10 employees do not have the resources to support a dedicated foreign trade department

As a result, many SMEs feels trading internationally is very discouraging. They may be forced to use an external consultant (very

expensive) or lose a potentially valuable business opportunity.

Global Trade Platform for SMEs

An Innovative Global Trade Platform For SMEs, Giordana Bonin

Ref : https://books.google.lk/books?id=TzUYxvwW51EC&lpg=PP1&pg=PA1380#v=onepage&q&f=false An Innovative Global Trade Platform For SMEs, Giordana Bonini

Often LOCs that are compiled by hand/manually often contain errors. GTP will facilitate the exchange of LOCs using traditional paper documents as well as by electronic means.

Architecture System architecture is based on modules that will

allow a range of actors from the foreign trade value chain to integrate with the portal. Involving different types of users such as import and

export companies, banks and other foreign trade sector operators

The service providers (transport and logistics companies, credit institutions, insurance companies, lawyers/legal consultants, foreign trade advisors, inspection institutions, forwarding agents, customs offices/agents, public authorities, financial institutions, etc.) can dynamically integrate to the platform through on-line interactive web tools.

Architecture Allows participant companies that use any kind of

application software to be easily integrated with the system. (From web services which uses XML)

High level of flexibility where features can be either be partly or wholly used.

Well organized portal and contents are clear and precise.

Provide effective support to companies who wish to trade internationally.

The main characteristic of this managerial software is the integration into a unique technological platform of all the actors involved in the import/export cycle.

Characteristics It is an innovative web based portal

dedicated to foreign trade Provides solutions to the major problems faced

by organizations when they are carrying out import/export transactions.

GTP is for SMEs who intend to start or expand international trade activities by guiding them through the stages of importing or exporting a product and highlighting any relevant regulations and taxes that apply.

It allows organizations (SMEs) to manage and carry out their B2B transactions on the Internet

Characteristics

It is a easy to use support tool to improve SMEs foreign trade activities because it fully integrate the foreign trade value chain.

Through a user-friendly interfaces, the portal supplies both the types of SMEs; who wish to start trading internationally as well as those who want to enter new markets.

Business Processes Facilitate Includes the business processes involved

in the import-export cycle. This web based portal supports the SMEs to

manage the whole import/export process by integrating all the steps from order to payment to delivery.

Deal with all the information regarding taxation calculations and details of service providers necessary to carryout a foreign trade transaction.

It also includes order confirmation, price determination, digital transfer of documents, agreement of the transaction’s terms and conditions, and selection of service providers.

Success Factors Should be based on state of the art

technologies as well as intelligent technologies. Should incorporate all the necessary security

features to achieve data protection, integrity and security.

It should not be just a simple marketplace. Should be easy to use to retrieve information,

especially by non expert users such like SMEs. Should include following major functional areas;

marketing, legal, informatics, international payment and logistics.

Features Offer buyer/seller contacts and related

information to obtain the best available offer.

Intelligent systems that highlights the most competitive service providers

Calculate total price for a product when it arrives at the export destination taking into account charges such as insurance, freight, import taxes, port fees.

Features Users can obtain export advice on the tax,

customs duties, legal and administrative requirements for a specific product depending on the country of origin and destination.

The exporter/importer can select relevant delivery and payment terms. Facilities to negotiate and manage different

payment methods and manage foreign exchange. Produce and manage all the necessary

transport documents Easily manage shipment requests

Value Addition

Could provide number of value added features(negotiation and consultancy) that will attract and retain SMEs and allow suppliers to gain market access and reduce transactions costs by ensuring the transparency and security of international transactions.

Additional facilities include such as e-learning facility to learn the process, foreign trade related discussion forums.

Value Addition

Facilities to overcome language barrier Support from an online export guide

containing export assistance, operational tools, financing, information sources and commercial information about potential foreign customers.

Consultancy support to help organizations overcome the key barriers which prevent them from entering to the international markets.

Security Need high security environment both physical

& digital. Digital security mechanisms should be

properly in place (protocols [HTTPS/ SSL], encrypted information transmission, password protection, user id system, digital signatures and acquire necessary digital certificates.)

CIA Features in Digital Security Confidentiality – ensure that information is not

accessed by unauthorized parties Integrity – ensure that information is not altered by

unauthorized people in a way not detectable by authorized users

Authentication – ensure that users are the people they claim to be

Security and Data Protection Security is an important issue for the successful

implementation of the portal. To guarantee the maximum level of trust, the

system should take the necessary measures to ensure both high performance and system protection. Digital signatures and proper mechanisms to allow

users to manage and exchange electronic documents. (in order to certify the validity, the authenticity and the ownership of any document transmitted over the platform)

Security of the sensitive data

Benefits to Seller / Manufacture The SMEs get virtual participate in bigger global

market. Could be a global provider easily. No marketing needed individually Improve the competitiveness of exporters

involved in foreign trade Facilitate exporters to create and publish their

product catalogue online, thus increasing their company visibility.

With dashboards which display current customer order status, new orders, new quotation requests, previous orders.. etc., exporters can easily get an overview of their business performance.

Benefits to the Buyer One stop shop concept Users can obtain a list of approved suppliers as well

as competitive service providers who can provide the necessary export services such as shipping, hauliers, insurance, etc.

Importers can request a price quotation for the displayed products and once the offer request is received, exporters can generate a counter offer through the portal.

Facility to posting an offer and carry out the international sale contract in a coordinated manner which conforms with international legislation.

Benefit Areas Costs Savings

Portal provide the most competitive quote from a range of service providers.

Portal simplifies the international trade process. Reduction in the risk related to the loss or delay

documents Savings in customs costs because goods will remain

in customs for a shorter period of time. Time Savings

Enable users to speed up the exchange of documents and streamline their foreign trade business processes.

Benefit Areas Reduction of errors

Platform supports the secure integrated and coordinated management of documents necessary for the execution of any foreign trade transaction.

The system ensures the authenticity and accuracy of every document exchanged online.

In particular users will be able to create, amend and change LOCs online, thus reducing the costs of using external consultants to prepare and dispatch such documents.

Another major benefit is achieved in the reduction of errors in LOCs missing documents or delays in presenting the correct paperwork which were often experienced by importers and exporters.

Conclusion

GTP will provide an important contribution because it meets a large number of identified user needs and provides a complete export service to SMEs

Provide importers/ exporters with the contacts and references to obtain the best available offer and to better integrate the value chain of their import/export operation.

2014, 2013, 2011, 2009 – 2. a) Illustrate and describe the benefits of the following eBusiness models to the manufacturer/seller and the customer separately.

i. Global Trade Platform for SMEs(20 Marks)