MAKING BUSINESS SENSE OF E-OPPORTUNITY

INTRODUCTION:
The web based technology Wide Internet, intranets and
extranets. Offer Universal connectivity with a simple user
interface at an astonishingly low cost.
Therefore creating opportunities to rethin business models.
!rocesses and relationships at every level of supply chain.
One hand the scope of potential for change is daunting. On
the other it is difficult to mae collective sense of where to
start strategic analyses as there exists a "umble of ideas
embedded in unfamiliar technical "argon. # first step to
unraveling the opportunity is constructing a coherent map of
e opportunity. # comprehensive map of eopportunity with
its $ domains.
%Operation, mareting & customer services' can be the basis
of exploring strategic landscape. The eopportunity domains.
(hould be defined with a business oriented perspective and a
language. Underlining the role of new technology in building
and sustaining a competitive. #t same time the
distinguishing between three eopportunity domains is
critical as each domain its own distinctive framewor for
identifying to go in competitive advantage. )ach business
should consider opportunity across all $ domain. Thought it
is tempting to begin with the excitement of e*service but in
practice the coperations and emareting layers re+uire
most urgent attention. This is evident form the experience of
so many dot coms that if there is an evision baced by a
single mareting approach and poor fulfillment capability,
then you don,t really have a business.
-et us now analyse the three eopportunities domains in
detail .
1. EOPERATIONS OPPORTUNITY:
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The eoperations opportunity has potential components.
3. #utomation of administrative processes
- 4usiness are increasing using their intranet information
for low cost administration of activities lie enrolling and
Training new employers, claiming travel expenses etc. #s
demonstrated by 5I(5O system and schlumberger such
applications create a more literate IT wor force and a
more nimble business culture.
6. (upply chain reconfiguration and Integration.
- Web technology can be put use in business process re
engineering and for foster turn around of customer,s
orders, enhanced customer support, improvement in
products unit cost structure, shorter lead time for new
product.
$. 1eengineering of primary Infrastructure
- The performance of individual business units can be
enhanced through help from other 7member of the
family8. 0or i.e. at 4! #9O5O an initiative by center %or
percent company' enables each natural resource
exploration unit %or child' to share learning with it,s peer
%or siblings'.
:. Intensified competitive procurement.
- )lectronic buying can be utilised for competitive
procurement and can result in a order supply base, more
competitive process and lower admin costs.
;. (upply 5hain reconfiguration and integration.
- Technology can be put for use to enable virtual enterprise.
5ompanies can identify ideal networ of provide partners
arrange. 0or the members to have immediate access to
relevant information and give the whole networ
advantage vertically integrated business.
IDENTIFYING THE EOPERATIONS OPPURTUNITY
3. Information content.
- The high level of info content %e.g. in industries lie
publishing, financial services, pharmaceuticals'.
Underlines the importance of reengineering primary
infrastructure of the business. If Info content is high,
infrastructure becomes central to competitive advantage.
6. Information Intensity.
- Information Intensity along supply chain relates to
intensifying company,s competitive or reconfiguring the
supply chain.
$. Information <ispersion.
- /igh levels of information dispersion are re+uired where
one or more of companies activities are performed at
different geographical locations.
EMARKETING OPPORTUNITY:
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Technology can be leveraged to get more effective ways of
selling a business product to existing or new customers. The
three broad categories are
3' )nhancing the selling process.
- )ffective utilisation of sales effort by better product@
better maret targetting@ enhanced expression of product
benefits.
6' )nhancing the 5ustomer,s 4uying )xperience.
- !roviding support services that bring product within easy
reach for an easier buy or developing a product in line
with customer exepectations .
$' )nhancing 5ustomer,s Usage )xperience.
- Increasing customer satisfaction by providing support
services throughout the product life cycle.
IDENTIFYING THE E MARKETING OPPORTUNITY
The basic attributes of )* mareting opportunity framewor
are.
PERCIWED PRODUCT DIFFERENTIATION & FREQUENCY
OF PURCHASE.
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- 4asically identifies the strategic mareting concept of the
business.
0or a product with a level of differentiation the mareter
would emphasiBe enhanced selling process ideas.
Whereas for a product with low level of differentiation the
mareter would select from enhanced. 5ustomer buying
experience and enhanced. 5ustomer usage experience
categories to create overall positioning. The underlying
logic is that buyers of differentiated products will want to
evaluate alternative providers before maing a choice,
where as buyers of undifferentiated products are loss
liely to shop around and set +uicly for a product that
matches their expectations. Therefore is customer does
not share mareter,s view of differentiation the logic
beas down therefore the word 7perceived 7 is ey.
6' 01)CU)25? O0 !U15/#().
- 5ustomers who purchase regularly a product have
different re+uirements from those who do not purchase
regularly. 5ustomers who do not purchase regularly will
have Informational needs and would respond better to a
mareter who provides the desired Info related to
product. 5overs as customers who purchased regularly
have already assimilated re+uired information and loo
transaction corts.
<epending or which segment in the framewor the
product fits in the e mareting strategy should be
decided.
C. ESERVICE OPPORTUNITY
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)(ervice begins with understanding of customers needs
across a given maret space, synthesising the
understanding with data on history and status of individual
customers thereby helping companies in giving customers
advice on their specific needs. ) service can bring together
understanding of customer needs and nowledge of all
relevant provides in real time to present customers with best
choices.
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0irst step to identifying e service opportunity is defining
the target maret. Then the company should decide should
the maret space be built around. 5ustomer,s needs over
time or around an event in customer,s life. Understanding
the customers !sychological state at each stage is critical.
Under the customer is unhappy at some point in the
customer life cycle it is unliely that on opportunity for e
service would emerge. The final issue to be looed at is Who
2eeds ItD The answer should be all sector. #nother
companies which seiBes an e opportunity. Traditional
providers would be reduced to commodity players.
The E-M!"e#$%& O''(!#)%$#* M(+e,
High
Frequency of
Purchase
Low
Frequency of
Purchase
Low Perceived
Product
Differentiation
High Perceived
Product
Differentiation
Achievement Selling
Benefit Selling
Customer Aggregation
Customer Targetting
Customer n!ut
Fastest source
Tailored Su!!ort
Added Service
"ne Sto! Sho!!ing
Product S!ecifies
Tailored Product
System Design
Solutions S!ecifier
I%#!(+)-#$(%
5ompanies are using internet technology to shift the basis of
competition away from +uality features and service and
towards price. Internet is not necessarily a blessing as it
tends to after industry structures, which dampens overall
profitability, has a levelling effect on business practices and
reduces the ability of any company to establish an
operational advantage that can be sustained.
4ut the ey +uestion today is not whether to deploy Internet
technology@ but how to deploy it.
5ompanies that have deployed internet technology have
been confused by distorted mareting signals. (ales figures
of companies using internet technologies have been
unreliable because companies have subsidised their products
and buyers have come to the internet out of curiosity.
(imilarly the cost figures are also under as the companies
have en"oyed subsdised inputs.
Two broad conclusions can be drawn on the impact of
internet on business many business active on the internet
are artificial business competing by artificial means.
!ropped up by capital which was till recently readily available
and creation of true economic value determines the
successful companies from the unsuccessful ones.
(o the basic +uestion is /ow can the Internet be used to
create economic valueD The answer to this lies in two
fundamental factors that determine profitability.
- industry structure which determines profitability of
average competitor.
- sustainable competitive advantage which allows
campaign to out perpot an average competitor.
The internets greatest impact has been reconfiguration of
existing industries that have been constrained by high costs
of communicating, gathering information or accomplishing
transactions. The structural attractiveness of any industry is
determined by five underlying forces as shown in diagram.
(ome of the influences of internet on industry structure may
be positive but most of the trends are regative as is evident
from the diagram.
The F)#)!e & C(.'e#$#$/e A+/%#&e
The deployment of internet technology will continue to pur
pressure on profitability of many industries. 9ost companies
would witness a net increase in no. of competitors and a
more intense mualry than before the advent of internet. The
powers of customers become more familiar with technology,
their loyalty to initial supplies will also decline as they realise
cost of switching is low.
#s the average profitability comes under pressure in many
industries the companies should set themselves apart by
achieving a sustainable competitive advantage operating at
low cost, commanding a premium price or both. 5ost and
price advantage could be obtained by operational advantage
or by strategic positioning.
To conclude internet is not disruptive to existing industries,
or companies as it does not nullify the most important
sources of competitive advantage in an industry but maes
them more important. 4ut as more and more companies
tae to internet, internet itself will be neutrolised as source
of advantage. The strategies that integrate internet and
traditional competitive advantage and ways of competing
would wor best for companies.
Therefore while a new means of conducting business has
become available, the fundamental of competition remains
unchanged. The next stage in internet,s evolution would
involve a shift in thining from e*business to business and
from e*strategy to strategy. #s a bottomline only by
integrating the internet into overall strategy would it became
a powerful force for competitive advantage.