INTRODUCTION

 Electronic Commerce
Logically it is Commerce carried out through Electronic
means and methods.
 What is Commerce?
 What are electronic means?
Commerce - Any form of transaction between two parties
is called commerce

eCommerce Comp-201
Imran M. Qureshi
 INTRODUCTION

Definition:
“Electronic Commerce is a general concept covering any form of
business transactions or information exchange executed using
information and communication technology, between companies,
between companies and their customers or between companies and
business administrations. Electronic Commerce includes trading of
goods, services and electronic materials” EU Website

“ Formulating commercial transactions at a site remote from the trading

partner and then using electronic communications to execute that
transaction”
 INTRODUCTION

PERSPECTIVES
• “ From a communications perspective, EC is the delivery of
information, products/services or payments over telephone lines,
computer networks, or any other electronic means”
• “ From a business process perspective, EC is the application of
technology toward the automation of business transactions and work
flow”
• “ From a service perspective, EC is a toll that addresses the desire of
firms, consumers and management to cut service costs while improving
the quality of goods and increasing the speed of service delivery.”
• “ From an online perspective, EC provides the capability of buying and
selling products and information on the internet and other online
services”
Kalakota and Whinston
 INTRODUCTION

 E-Commerce is commonly thought to include e-tailing, online

banking and shopping
 Transactions where buyers actually buy and sellers actually sell
 Some suggest that E-Commerce is any transaction online be it a
support inquiry or a catalogue search
 E-business is much more encompassing
 E-business includes all activities from procurement of raw materials,
to production, to stock, to distribution and logistics, to sales, marketing,
after sales, invoicing, debt collection etc.

 INTRODUCTION

CONNECTED DISCIPLINES
 MARKETING
 COMPUTER SCIENCE
 FINANCE
 ECONOMICS
 MANAGEMENT
 MIS (Management Information Systems)
 BUSINESS LAW & ETHICS
BUSINESS PROCESS
INQUIRY

ORDER

PRODUCTION

SHIPMENT

PAYMENT
 INTRODUCTION
BENEFITS
1) Organizations
 Global Markets
 Decreased Costs of Business
 Specialized Businesses
 Reduced Inventory (Pull type Supply chains)
 Faster Capital Conversion
 Facilitates BPA, BPI, BPR
 Volume and frequency of Transactions
 Increased efficiency and productivity
 INTRODUCTION

BENEFITS
2) Customers
 24/7 Access to markets
 Freedom of choice
 Detailed Information
 Electronic Communities
 Work and Shop from home
 Decreased purchase price
 INTRODUCTION

LIMITATIONS
 Establishment cost
 Security & Privacy
 User resistance
 Legal issues
 Support Services
 Accessibility to the internet
 Acceptability of EC
 INFRASTRUCTURE
INTRANET EXTRANET INTERNET

INTRANET
An intranet is a corporate LAN or wide area network (WAN) that
uses internet technology and is secured behind company firewalls.
The intranet links various servers, clients’ databases and
application programs like Enterprise Resource Planning (ERP).

On a practical line an intranet is a TCP/IP network inside a

company that allows employees to access the company’s
information resources through an internet-like interface. Intranet
can be used to provide its employees email and access to
groupware software, a corporate client/server database, corporate
human resource applications or custom applications and legacy
applications. eCommerce Comp-201
Imran M. Qureshi
 INFRASTRUCTURE

ERP
CLIENTS SERVERS
E LEGACY
F
X
T I
E I R
N INTRANET EMAIL
R
E
N T
A E
L R W
U N A WEB
S E L
E T L
SERVERS
PRODUCT
R DATABASE
S

eCommerce Comp-201
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 INFRASTRUCTURE

FUNCTIONS OF INTRANET

• Corporate/Department/Individual web pages

• Database access
• Search Engines and Directories
• Interactive Communication
• Document distribution and workflow
• Group ware
• Telephony
• Integration with EC
• Extranet

eCommerce Comp-201
Imran M. Qureshi
 INFRASTRUCTURE

INTRANET APPLICATION AREAS

• Electronic Commerce
• Customer service
• Knowledge sharing applications
• Enhanced group decision and business process
• Empowerment
• Software distribution
• Document management
• Project Management
• Training
• Facilitate transaction processing
• Administrative process support
eCommerce Comp-201
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 INFRASTRUCTURE

INDUSTRIES ADOPTING INTRANETS

• Financial Services

• Information Technology

• Manufacturing

• Retail

• Services

eCommerce Comp-201
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 INFRASTRUCTURE

CHARACTERISTICS

• Scalability
• Interoperability
• Configurable
• Compatibility
• Manageability
• Availability
• Reliability
• Stability

eCommerce Comp-201
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 INFRASTRUCTURE

CASE STUDIES - Electronic Commerce A Managerial

Perspective Pg 246 - 248

• FedEx – Package Tracking

• Moen – Connected ERP- Plumbing Supplies
• Compaq
• Silicon Graphics
• Coopers and Lybrand – Taxation and consulting services

eCommerce Comp-201
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 INFRASTRUCTURE
EXTRANET

DEFINITION

Extended intranet that connects multiple intranets through a

secured tunneling internet. Extranets combine the privacy and
security of intranets with the global reach of the internet,
granting access to outside business partners, business partners,
suppliers and customers to a controlled portion of the
enterprise network.

An extranet allows external agents to have access to corporate

computing resources. A higher level of security is required on
an extranet.
eCommerce Comp-201
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 INFRASTRUCTURE

O
N
W
L
E
I
B I
E N
N
S X E PURCHASING
T T
E E
R S DEPARTMENT
R A R
E N
V N
E
R E
E
T V T
Customer
R
E
R
FedEx
Cisco Systems
eCommerce Comp-201
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 INFRASTRUCTURE
STRUCTURE

Secure Connection: This can be implemented using a direct

leased line with full control over it linking all extranets.
Internet based connection: A secure link can be created using a
Virtual Private Network (VPN).

BENEFITS
• Enhanced communication
• Productivity Enhancement
• Business Enhancement
• Cost reduction
• Information delivery
eCommerce Comp-201
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 INFRASTRUCTURE
EXAMPLES

• General Motors – Interactive Kiosks, PDA at Dealerships,

Shopping Malls (GM Access Network)

• VHA INC. – Product Catalogues, suppliers, memberships $8 Bn

in products annually

• Adaptec Inc. – Computer Chips, Office, Factory, Suppliers,

Customers connectivity

• Caterpillar Inc. – Connecting Suppliers

eCommerce Comp-201
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 INFRASTRUCTURE
GUIDELINES FOR IMPLEMENTATION

• Find business opportunities by utilizing the intranet and

extranet

• Analyze whether the connectivity requirement suits the

intranet or extranet

• Plan the most secure and economical choice for

implementation

• Select the best outsourcers for implementation

• Selling the intranet & Extranet

eCommerce Comp-201
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 INFRASTRUCTURE
INTERNET

DEFINTION

Internet is a network of networks.

ARCHITECTURE

PC ------------ Router/Switch ----------------------Server

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 INFRASTRUCTURE
BUSINESS PROCESS

Inquiry - Order - Production – Shipment - Payment

Communication – Production – Transportation – Communication

/ Shipment

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INFRASTRUCTURE

Gawadar

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 INFRASTRUCTURE
PROCESS
A request/packet is sent from the web browser, which passes through a series of routers
and servers until it reaches the destination server, which processes the request/packet
and sends a reply. This communication goes on until the browser window is closed
and/or a new URL is requested.

eCommerce Comp-201
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 INFRASTRUCTURE
NETWORK ARCHITECTURE MODEL
USER Application Layer Message

Presentation Layer Encrypted Message

Encrypted Message with

Transportation points and
Transport information
Transport Layer
Encrypted Message with
Transportation points,
Transport information and
Data link Layer Network Address

Encrypted Message with Transportation points,

Transport information, Network Address and
Physical Layer Error Checking Data
 INFRASTRUCTURE
OSI MODEL
• Open Systems Interconnection
• 7 layers

Where the applications using the

Application network resides

Presentation Character conversion, encryption and

decryption

Session Establishing sessions between users and

token management.

eCommerce Comp-201
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 INFRASTRUCTURE

Performs end-to-end error and flow

Transport control.

Creates, maintains and terminates network

Network
connections

Data Link Taking the raw data and transforming it

into a cohesive unit called a frame.

Handles the transmission of bits over a

Physical communication channel like copper

eCommerce Comp-201
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 INFRASTRUCTURE
INTERNET MODEL

Application Layer FTP, Telnet, SMTP, SNMP, HTTP, DNS

Transport Layer TCP, UDP

Network Layer IP

Interface Layer Conversion of bits to signals

eCommerce Comp-201
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 INFRASTRUCTURE

INTERNET STANDARDS
Internet committees that approve standards for computer networks, data
communication and telecommunication set all internet communication
standards. Other organizations that set standards for the Internet are.

ISO – International Standards Organization

ANSI – American National Standards Institute
ITU-T – International Telecommunication Union- Telecommunication
Standards Sector
IEEE - Institute for Electrical and Electronic Engineers
EIA – Electronic Industries Association

eCommerce Comp-201
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 INFRASTRUCTURE

WEB DESIGN TOOLS

• Website, Database
• Website – HTML, Java, VB.net, ASP, Flash, Dreamweaver, Correl
Draw, Photoshop

HTML Hyper text markup language

• First language developed specifically for internet

eCommerce Comp-201
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 INFRASTRUCTURE

FEATURES

1. Simple and Object Oriented

2. Distributed
3. Interpreted
4. Robust
5. Secure
6. Architecture Neutral
7. Portable
8. Multithreaded
9. Dynamic

eCommerce Comp-201
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 INFRASTRUCTURE

EXAMPLE

class myfirstjavaprog
{
public static void main(String args[])
{
System.out.println("Hello World!");
}
}

eCommerce Comp-201
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 INFRASTRUCTURE

BUSINESS REASONS FOR USING JAVA

1. Ease of distribution
2. Speed of development
3. Developer Critical mass
4. Platform Independent
5. Third-party support

eCommerce Comp-201
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 INFRASTRUCTURE

XML
• Standard Language
for database communication
• Tags

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 INFRASTRUCTURE
VRML
• Interactive 3-D environments on the internet

http://www2.hrp.no/vr/vrml/
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 INFRASTRUCTURE

Real Audio
• Audio and Video Streaming
• Compression Ratio, Buffering

eCommerce Comp-201
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 INFRASTRUCTURE
Mobile Computing
• Changing the way business is conducted
Devices: Laptop, PDA, Pocket PCs, Mobile
Phones, Multipurpose devices, GPS Navigation,
Memory storage devices

• Wireless technology: Bluetooth, Wi-Fi

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 E-COMMERCE LAYOUT

BASIC ELEMENTS

USER INTERNET E-SHOP

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 E-COMMERCE LAYOUT

BASIC ELEMENTS

SEARCH

ORDER
PAYMENTS
TRANSPORT

CUSTOMER SERVICE

USER INTERNET E-SHOP

eCommerce Comp-201
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 E-COMMERCE LAYOUT

CHARACTERISTICS OF E-SHOP
 Visibility
 Ease of Use
 Order Processing
 online Payments
 Security
 Transportation System
 After Sales / Customer Service

eCommerce Comp-201
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 TYPES OF E-COMMERCE
ECommerce is classified based on the nature of
transactions and communications

 Business to Business ECommerce (B2B)

 Business to Consumer Ecommerce (B2C)

 Consumer to Business Ecommerce (C2B)

 Consumer to Consumer ECommerce (C2C)

 Non Business ECommerce

eCommerce Comp-201
Imran M. Qureshi
 TYPES OF E-COMMERCE
ECommerce is classified based on the nature of
transactions and communications

 Business to Business ECommerce (B2B)

 Carried out between businesses

 Intermediate stages
 Raw material, Processed goods

eCommerce Comp-201
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 TYPES OF E-COMMERCE
 Business to Business ECommerce (B2B)

 Inter business: Between Organizations

 Supplier Management – PO, processing cost, cycle times

 Inventory Management – Order-ship-bill cycle, inventory
turns, out of stock occurrences
 Distribution Management – transmission of documents
 Channel Management – product channels
 Payment Management – clerical error, speed and accuracy
of transmission

eCommerce Comp-201
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 TYPES OF E-COMMERCE
 Business to Business ECommerce (B2B)
CASE-EXAMPLE WALMART

In the 1980’s Wal-Mart Inc. implemented a pioneering system of inter organizational

electronic commerce. Wal-Mart invested half a billion dollars in computer and satellite
communication networks, bar code systems, scanners and other equipment linking
each point-of-sale terminal to distribution centers and headquarters in Bentonville,
Arkansas. Many believe that this system enabled Wal-Mart to manage the explosive
retail sales growth that catapulted the company to the number one position in the US
retail business. The system enabled the company to maintain high service levels and
increase sales, while reducing inventory costs by three fourths. Further, Wal-Mart
empowered individual stores to order directly from even overseas suppliers reducing
inventory-restocking time from an industry average of 6 weeks to 36 hours. Moreover
by tracking every sale through point of sale devices (shopping cart data), Wal-Mart
stores are better able to keep their stores well stocked, while maintaining tight
inventories at low prices.

eCommerce Comp-201
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 TYPES OF E-COMMERCE
 Business to Business ECommerce (B2B)

 Inter business: Between Organizations

 Supplier Management – PO, processing cost, cycle times

 Inventory Management – Order-ship-bill cycle, inventory
turns, out of stock occurrences
 Distribution Management – transmission of documents
 Channel Management – product channels
 Payment Management – clerical error, speed and accuracy
of transmission

eCommerce Comp-201
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 TYPES OF E-COMMERCE
 Business to Business ECommerce (B2B)

 Intra business: Within an organization

 Work group communication – email, video conferencing,

bulletin boards
 Electronic publishing – product specs, manuals, strategic
and tactical decision making, updates, reduced costs
 Sales force productivity – market intelligence, competitor
information

eCommerce Comp-201
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 TYPES OF E-COMMERCE
 Business to Business ECommerce (B2B)

 Corporate Intranets

• Human Resources
• Employee Communications
• Product Development
• Project Management data
• Internal Catalogs
• Sales Support data
• Equipment and shipment tracking
• Corporate databases

eCommerce Comp-201
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 TYPES OF E-COMMERCE
 Business to Business ECommerce (B2B)
 Entities

 Selling Company – with marketing management perspective

 Buying Company – with procurement management perspective
 Electronic intermediary – a 3rd party intermediating service
provider.
 Deliverer – who should transport the JIT (Just in time) product.
 Network Platform – Internet, intranet, extranet.
 Protocols and communication – such as EDI and comparison-
shopping using software agents.
 Back-end information system – possibly implemented using
the intranet and ERP system.
eCommerce Comp-201
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Selling Company Buying Company
Extranet
Intranet
Electronic ERP
ERP
Intermediary

Website
Database
Database
Database

Extranet / Internet
Physical
transfer
Transportation Company Electronic
transfer
 TYPES OF E-COMMERCE
 Business to Business ECommerce (B2B)
 Models

 Supplier Oriented Marketplace

 Buyer Oriented Marketplace

 Intermediary Oriented Marketplace

 Virtual Corporation Networking

 Networking b/w headquarters and subsidiaries

eCommerce Comp-201
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 TYPES OF E-COMMERCE
 Business to Consumer ECommerce (B2C)

 E-Shop Functional Features

 Customer Registration
 Dynamic Web Pages
 Personal Web Pages
 Shopping Basket/Cart
 Multiple Payment Options – Credit card, Debit card, E-cash,
E-Cheque, Loyalty card
 Encryption
 Transportation – Online, Physical

eCommerce Comp-201
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 TYPES OF E-COMMERCE
 Business to Consumer ECommerce (B2C)

 Advantages of B2C

 Home Shopping
 World-wide 24/7 trading
 Trends and Price
 Home Delivery
 Online Sales Support
 Reduced costs
 Hi-tech image

eCommerce Comp-201
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 TYPES OF E-COMMERCE
 Business to Consumer ECommerce (B2C)

 Disadvantages of B2C

 Privacy and security

 Transportation – time, trust

 Goods Inspection

 Return

eCommerce Comp-201
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 TYPES OF E-COMMERCE
 Business to Consumer ECommerce (B2C)

 Industries on board

 Travel & Tourism Industry

 Real Estate Industry

 Stock Brokerage – 70% less full service trader, 35% less

discount service trader

 Cyber Banking and Personal Finance

eCommerce Comp-201
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 TYPES OF E-COMMERCE
 Consumer to Consumer ECommerce (C2C)

 Advantages

 Larger market and more options

 Physical distances

 More informed decisions (research)

eCommerce Comp-201
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 TYPES OF E-COMMERCE
 Consumer to Consumer ECommerce (C2C)

 Disadvantages
 Time to realize product, instant gratification
 Trust, Fraud
 Taxes
 Computer literacy

 Ebay
 Online Auctions, Zero Liability
eCommerce Comp-201
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 E-BUSINESS MODELS
PORTERS’ VALUE CHAIN

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 E-BUSINESS MODELS
PRODUCTION
Porter’s Value Chain
- Manufacturer focused model
- Control firmly with manufacturer
- Customers buy whatever is produced
Customer driven value chain
- Customer focused model
- Customers involved in product designing directly
influencing production

eCommerce Comp-201
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 E-BUSINESS MODELS
CUSTOMER DRIVEN VALUE CHAIN

Manage
Procure Produce
Market New Product Market Selling and
Materials Products
Research Development Products Fulfillment

eCommerce Comp-201
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 E-BUSINESS MODELS
PROCUREMENT

Buyer Oriented Marketplace - GE

Supplier Oriented Marketplace – Cisco Systems

Intermediary Oriented Marketplace – Intel

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 E-BUSINESS MODELS
SELL-SIDE DISTRIBUTION
Disintermediation
Manufacturer Wholesaler Retailer Customer

Manufacturer Retailer Customer

Manufacturer Customer

eCommerce Comp-201
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 E-BUSINESS MODELS
SELL-SIDE DISTRIBUTION
Reintermediation
- Traditional Intermediaries

- Outsourcing

- Non-physical intermediaries
Portals, Hubs, Meta-market, Switchboards,
Infomediaries, Shopping bots, Affiliates
Affiliates – Customers as sales agents eCommerce Comp-201
Imran M. Qureshi
 ELECTRONIC PAYMENT
TRADITIONAL PAYMENT
LIMITATIONS
1. Physical presence of transacting parties
2. Delay due to fraud detection and over draft or bank
confirmation
DISADVANATAGES
1. Lack of convenience 5. Micro Transactions
2. Lack of Security
3. Lack of Coverage
4. Lack of Eigibility eCommerce Comp-201
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 ELECTRONIC PAYMENT
ENABLERS
1. Decreasing Technology Cost
2. Reduced operational and processing cost
3. Increasing online commerce
INNOVATIONS
Consumer side: Credit cards, debit cards, automated teller
machines(ATM), stored value card, electronic banking
Online Commerce: Digital cash, electronic cheques, smart
cards, encrypted credit cards
Business side: Automated clearing house
eCommerce Comp-201
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 ELECTRONIC PAYMENT
ONLINE SHOPPING PROCESS (financial perspective)

Step 1 Step 2 Step 3 Step 4

Browsing Selection Fill form Mode of
payment

Step 6 Step 7 Step 9

Step 5
Payment Seller sends Step 8 Seller
Send Form requests
Authorization Shipment
Confirmation and
Cust. Bank receives
payment
from bank

eCommerce Comp-201
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 ELECTRONIC PAYMENT
FINANCIAL INSTRUMENTS
ELECTRONIC TOKENS
• Prepaid and Postpaid
• Digital cash, debit card, electronic purses like stored value
cards electronic cheques, third party e.g. Verisign
ELECTRONIC CASH
• Monetary Value
• Interoperability
• Retrievability
• Security eCommerce Comp-201
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 ELECTRONIC PAYMENT
FINANCIAL INSTRUMENTS
• Digital Cash
• Encryption, digital signature
• Public key, private key

eCommerce Comp-201
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 ELECTRONIC PAYMENT
Digital cash
PURCHASING DIGITAL CASH FROM CURRENCY SERVERS
This involves two steps, the establishment of an account and maintenance of sufficient money. Currently
most digital cash systems require that customers have an account with a central online bank. Once
the account has been established, consumers use the digital cash software on the computer to
generate a random number, which serves as a “note”. IN exchange for money debited from the
customer’s account the bank uses its private key to digitally sign the note for the amount requested
and transmits the note back to the customer. In effect the network currency server is issuing a bank
note with a serial number and a dollar amount. Through its digital signature the back commits itself
to back that note with its face value in real dollars.
This method of note generation is very secure as neither the customer nor the merchant can counterfeit the
back’s digital signature. Payer and payee can verify that the payment. The bank is protected against
forgery, the payee is protected against the bank’s refusal to honor a legitimate note and the user is
protected against false accusations and invasions of privacy.
DigiCashm, a company that has implemented digital cash systems. Every customer has an account at a
digital bank. Using that account people can withdraw and deposit digital cash. When a digital cash
withdrawal is made the digital cash users PC calculates how many digital coins of what
denominations are needed to pay the requested amount. The result of these calculations is sent to the
digital cash bank. The bank debits the client’s account for the same amount. The authenticated cash
is sent back to the user. The serial number plus the bank’s digital signatures are now digital coins
and their value is generated by the bank.
eCommerce Comp-201
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 ELECTRONIC PAYMENT
Electronic Cheque
• Digital Signature, Digital Certificate
Benefits
• Modeled on traditional cheques
• Micro payments
• More effective for corporate markets (Files)
• Integrated into electronic payments networks
Examples
Netcheck, NetBill
eCommerce Comp-201
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 ELECTRONIC PAYMENT
Electronic Cheque Usage
Electronic check users must register with a third party
account server before they are able to write electronic
checks. The account server also acts as a billing
STEP-1 service. The registration procedure can very depending
on the particular account server, and may require a
credit card or a bank account to back the checks.

Once registered a consumer can then contact a

STEP-2 seller of goods and services.

Using email or other transport methods the

buyer sends an electronic check to the seller
STEP-3 for a certain amount of money.

When deposited the check authorizes the

transfer of account balances from the account
STEP-4 against which the check was drawn to the
account to which the check was deposited.
eCommerce Comp-201
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 ELECTRONIC PAYMENT
Credit Cards
1. Payment using plain credit card details
2. Payment using encrypted credit card details
3. Payment using third party verification

Debit Cards at Point of Sale

• Instant payments

eCommerce Comp-201
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 E-CUSTOMERS

Motivations (B2C)
• Socialization
• Product search and info regardless of buying
• Entertainment
• Yahoo! Google
Company Response
• Aspirations and Expectation of Customers
• Reflect reasons, aspirations, expectations in communication

eCommerce Comp-201
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 E-CUSTOMERS

Motivations (B2B)
• Cost effectiveness
• Selling
Online Expectations
• Higher standards in terms of service
• Convenience
• Speed of delivery
• Competitive price
• Choice eCommerce Comp-201
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 E-CUSTOMERS

Purdue University Survey on why customers change suppliers

1) Product Issues 17%
2) Price 10%
3) Customer Service 63%
Customer Service Problems
1) Rude Employees 20%
2) Unaccommodating 20%
3) Slow to respond 13%
4) Poor access to right person 41% eCommerce Comp-201
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 E-CUSTOMERS

ONLINE BUYING PROCESS (Buyer’s perspective)

• Problem Recognition
• Information Search
• Evaluation
• Decision
• Action (Purchase)
• Post Purchase

eCommerce Comp-201
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 E-CUSTOMERS
AWARENESS
• Featured products
REWARDS SEARCH MODES
• On-site banner ads
• Loyalty schemes • Keyword
• Opt-in email
• Competitions • Product search

SUPPORT • Newsletters • Browse

• Email notices • Reminder Service
• FAQs • Extranet EVALUATION
• Order History • Online product guides

• Knowledge base • Product configurations

• Diagnostics tools DECISION • Detailed infosheets

PURCHASE • Security guarantee • Product picture
• Personalized • Price, availability,
• Service Promise
• Re-buys delivery info.
• Discounts
• 1-click
• Store Locator
• Call to action
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STRATEGIC PLANNING
Industry and Competitive Analysis

Strategy Formulation

Implementation

Performance Assessment, Strategy Assessment

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 STRATEGIC PLANNING
INDUSTRY AND COMPETITIVE ANALYSIS
• SWOT Analysis
• Competitive Intelligence
 Review Competitor’s Website
 Analyze related news groups
 Examine publicly available financial documents
 Use an information delivery service like Info Wizard, My Yahoo,
Point Cast
 Give prizes to visitor’s who give best review’s of strengths and
weaknesses of competitor’s products
 Corporate Research companies like Gartner.com
 Solicit opinions in chat rooms
eCommerce Comp-201
Imran M. Qureshi
 STRATEGIC PLANNING
STRATEGY FORMULATION

SWOT DIAGRAM

Internal/Ex
ternal
Factors Strength Weakness
Opport SO Strategies WO Strategies
unities Generate strategies that use Generate strategies to
strengths to take advantage of opportunities by overcoming
opportunities weaknesses

ST Strategies WT Strategies
Threats Generate strategies that use Generate strategies that
strengths avoid, overcome threats minimize weaknesses by
avoiding threats

eCommerce Comp-201
Imran M. Qureshi
 STRATEGIC PLANNING
VALUE ANALYSIS APPROACH
What criteria determines who Customer How can we acquire this
will be our most profitable Acquisition customer in the most effective
customers and efficient way

Customer Customer
Selection Relationship Marketing Retention

How can we increase the How can we keep this customer

loyalty and profitability of the Customer as long as possible
customer Extension

eCommerce Comp-201
Imran M. Qureshi
 STRATEGIC PLANNING
COMPETITIVE STRATEGIES
1. Frontal Assault
2. Flanking Maneuver
3. Raise Structural Barriers
4. Lower the inducement for attack

COOPERATIVE STRATEGIES
1. Joint Venture
2. Value Chain partnership

eCommerce Comp-201
Imran M. Qureshi
 STRATEGIC PLANNING
IMPLEMENTATION
• Plans & Execution
• Pilot Project
PROJECT & STRATEGY ASSESSMENT
• Why need assessment
 Find out if the project has achieved intended results.
 Determine if the project is still viable in an ever-changing
environment.
 Reassess the initial strategy in order to learn from mistakes and
improve future planning.
 Identify failing projects as soon as possible; determine reasons
for failures to avoid the same problems in the future.
eCommerce Comp-201
Imran M. Qureshi
 STRATEGIC PLANNING
• Measuring Results
• Collecting Information
• Finalization
ROI
Reasons For establishing websites
 Marketing
 Customer Support
 Sales
Which product is a good candidate
 Can be shipped easily and transported electronically
 Targets knowledgeable buyers
 Price falls within a range eCommerce Comp-201
Imran M. Qureshi
 STRATEGIC PLANNING
CRITICAL SUCCESS FACTORS
 - Specific products or services traded.
 - Top management support.
 - Project team reflecting various functional areas.
 - Technical infrastructure
 - Customer acceptance.
 - User friendly web interface
 - Integration with the corporate legacy system
 - Security and control of the EC system.
 - Competition and market situation.
 - Pilot project and corporate knowledge
 - Promotion and internal communication
 - Cost of the EC project
eCommerce Comp-201
 - Level of trust between buyers and sellers. Imran M. Qureshi
 STRATEGIC PLANNING
GUIDELINES FOR A SUCCESSFUL EC STRATEGY
1. Conduct Necessary education and training
2. Review current distribution and supply chain models
3. Understand what your customers and partners expect from the
EC system
1. Reevaluate the nature of your products and services
2. Give a new role to your human resource department
3. Extend your current systems to the outside
4. Track new competitors and market shares
5. Develop a web-centric marketing strategy
6. Participate in the creation and development of virtual marketplace
7. Instill EC Management style
eCommerce Comp-201
Imran M. Qureshi
 STRATEGIC PLANNING
DECIDING ON APPLICATIONS
• Brain storming by a group of employees
• Soliciting the help of experts such as consultants
• Reviewing what the competitors are doing
• Asking vendors to provide you with suggestions
• Reading relevant literature
• Using analogies from similar industries or business processes
• Using a conventional requirement analysis approach

eCommerce Comp-201
Imran M. Qureshi
 STRATEGIC PLANNING
CREATING A WEB TEAM AND ASSIGNING FUNCTIONAL SILLS

SUB PROJECTS

Website Building system Business process Securtiy and

Design infrastructure reengineering Control

Marketing ♦ ♦
F
U
N
C Finance ♦ ♦ ♦
T
I
O Accounting ♦ ♦ ♦
N
S
  Information ♦ ♦ ♦ ♦
technologies

Human ♦ ♦
Resources
Management

eCommerce Comp-201
Imran M. Qureshi
 STRATEGIC PLANNING

EVALUATING OUTSOURCING

 Build itself

 Develop from other firms (Outsourcing)\

 Buy a suite of software that gives a basic structure

which can be modified to fit the company’s needs.

eCommerce Comp-201
Imran M. Qureshi