Creating an Integrated E-commerce Strategy
- Chapter 2 Creating an Integrated E-commerce Strategy
- The Bonds of an E-commerce Strategy
- Four Positional E-strategic Directions
- Summary
Chapter 1 considered some of the issues that underlie e-commerce strategy formulation and noted that the strategy employed will vary depending upon
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The nature of the organization-born on the net or move to the net
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The nature of the product-service based, manufacturing, or mixed
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The online model the organization wishes to adopt-B2C, B2B, and so forth
In order to understand the process of e-commerce strategy better, a more systematic examination of the strategic factors involved has to be considered. To do this we'll use a model, which with modification can ultimately be utilized across the differing portal environments such as B2C and B2B.
Seven Dimensions of an E-commerce Strategy
The e-commerce strategy of over 40 leading U.S. and European organizations has been closely examined for this book. They represent a variety of industry sectors ranging from manufacturing to service; whose origins range from the most established and traditional of blue chip companies to born-on-the-net start-ups; with revenues ranging from $1 million to over $100 billion; in groups we could label e-commerce leaders to those we could label laggards. It became clear that the differentiation between those companies that have a successful e-commerce strategy and those that do not is a function of achieving balance among seven major factors (see Figure 2.1):
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- Four positional factors
1. Technology
2. Service
3. Market
4. Brand
- Three bonding factors
1. Leadership
2. Infrastructure
3. Organizational learning
It can be argued that the model in Figure 2.1 can be applied to all forms of organization in the traditional industrial and service sectors. This is in fact true, and it is an intentional component of the model's construction. The model is based upon the understanding that all organizations need to continuously address these seven issues, whether they are traditional organizations addressing an investment decision regarding the deployment of a new technology required to speed up a production line, a specialized financial services company on Wall Street determining its ability to operate in the electronic market, or a company born on the Internet that needs to assess its branding. Organizations will always be adjusting their strategies to meet the changing environment in which they operate, and the model aims at assisting executives in understanding the importance and weighting that need to be applied to each factor. However, the model is especially applicable to assisting the needs of e-commerce strategists and is applied to that domain throughout this book. The model is flexible enough that it can be used by giant traditional organizations in their e-strategy formulation processes as they move to the Net, just as it aims to meets the needs of start-up entrepreneurs looking at defining their marketspace and e-strategy from scratch. Furthermore, the nature of the model allows an organization to map its strategy onto any form of vendor-client relationship, whether that relationship is between two businesses, a business and a customer, or any other entity. The basic building blocks are consistent in their structure once the target relationship is determined. For example, should an organization be in a vertical B2G relationship, the dimensions of strategy formulation are no different from those of a B2B relationship. The decisions still involve branding, service levels, marketspace, and technology, but the balance and focus of their interactions change. For example, branding may be less of an issue in a B2G environment than in a B2B environment. However, global fulfillment and the ability to satisfy the agency's service levels may be more of an issue. Thus the aim is to present a flexible framework for e-strategists that facilitates their gaining an understanding of the interactions of the environment within which they are to operate and then developing a successful counterstrategy for their organizational entity.
First let's consider the bonding factors of leadership, infrastructure, and organizational learning. This will enable us to understand both their importance as foundations upon which an organization's e-commerce strategy is based and as a springboard from which all development emanates. This will pave the way to consideration of the four focal points around which a balanced strategy is created: technology, brand, market, and service. Each of these areas presents complex and intricate issues of its own, compounded through the need to achieve a balanced, integrated solution overall-a complete analysis is presented in subsequent chapters. Finally, in order to show how the strategy works in action, we step through a real-world case study of Royal Caribbean International Cruise Lines and its successful online e-commerce strategy through the lenses of this model.