In-depth Reflection 3: e-Commerce Strategy

This review will be on the important concept of how e-Commerce impacts on overall business strategy and planning, including just how e-Commerce application is initially formulated justified and lastly prioritised.

Initially a description of exactly what e-Commerce strategy concerns is stated by (Turban, E et al. 2008) as: “The formulation and vision of how a new or existing company intends to do business electronically.”

Ezine Articles gives us another version to the description of e-Commerce strategy: “There are many definitions to what e-Marketing is, the simplest and shortest one being formulated by Mark Sceats: e-Marketing is Marketing that uses the internet as manifestation media. A working definition is that coming from a group of CISCO specialists: e-Marketing is the sum of all activities a business conducts through the internet with the purpose of finding, attracting, winning and retaining customers.”

Overall it sounds quite straight-forward. But for businesses this matching of strategy and e-Commerce, I feel to be even increasingly important as the Internet and electronic methods of business become more prominent and increasingly available to access for the public.

I think obviously the importance of implementing e-Commerce strategy is dependent of how much of the businesses income is made from the Internet. A “Bricks & Mortar” business which dabbles with an online presence just needs to be able to manage their portal online, but for a company of the online revenues generated with such significance as for example e-Bay or any major bank, successfully marrying a physical business plan and strategy with an online strategy could make or break a business.

A prime example for this would be ING Direct. This Netherlands bank has decided that the Internet is such a low cost, powerful tool that they have become the largest “branchless bank” in the World. Their entire presence in Australia is no more than advertising on the Internet and TV. Within their very large corporation, their overall strategy and electronic strategy is that only offering banking online would prove to the best move.

And such decisions do pay off when implemented carefully and whole-heartedly.
ING Direct offers some of the highest savings accounts and interest rates of any bank in the marketplace. I personally am deciding when the time is right to open one of their savings accounts online since they offer such good rates. With no “real” infrastructure costs, it allows them to offer such competitive savings and rates.

As with all types of strategies along with their implementation to a new or existing business strategies, a planning process exists. (Turban, E et al. 2008) gives us the SISP model (Strategic Information Systems Planning) consisting of;

1. Initiation
2. Formulation
3. Implementation
4. Assessment

Overall this type of process is similar in fashion to other implementation models, as e-Commerce is simply another marketing and revenue channel. I found it interesting the how (Hardy, C. Dyki, M. 2006) stated that “there is no clear sure fire way to ensure success.” In relation to this statement, I really thought that there would have been a recipe for such success. But since the Internet and e-Commerce are such a young marketing, revenue and business tools that we have not seen significant trends and proven methods of success?

But these theories need to be coupled with an effective guide or business plan. Anyone can outline the theory of identifying what needs to be done, but how will it be placed in the larger scheme of things? Where will e-Commerce be strategically positioned within the business overall plan? Scaling from just enhancing another business SBU, all the way up to influencing a business so much to changing completely over to a virtual business.

Is the online sales World simply another marketing and sales channel? According to Ezine Articles, no. A business that incorporates e-commerce into its business strategy can offer much more. “What gives e-Marketing its uniqueness is a series of specific functions, relational functions, that can be synthesized in the 2P + 2C+ 3S formula: Personalization, Privacy, Customer Service, Community, Site, Security, Sales Promotion.”

But what is the point for the implementation of e-Commerce? The use of e-Commerce business strategies provides businesses with a competitive advantage over their rivals. I think that this is the one clear point, integrating e-Commerce into a businesses strategy, even allowing it to become a strategic business unit by itself.

(Turban, E et al. 2008) importantly notes that “e-Commerce in strategy development does not radically change the process, but it does impact the outcome.” A business that decides that entering the World of online trading and e-Commerce needs to importantly identify what they exactly want from the Internet. Does the business only want another channel in which to sell a few items through, or do they wish to fully integrate an Internet business strategy similar to examples such as amazon.com? Look at where you are now, compare where you would like to be and implement accordingly while never loosing sight of your businesses capabilities.

The Internet has proved itself to be an almost unlimited market and profit maker. Google is the biggest demonstration plain and simple. But in the parameters of the topic, how utilising good e-Commerce strategy can transform a normal “bricks & mortar” business. A prime transformation example I think would be any banking or real estate business.

But even in wake of the power and success of such businesses, (Hardy, C. Dyki, M. 2006) states that “e-Commerce still does not have total global reach.” The spreading fingers of the Internet cannot touch everyone. The factors listed below are stated as the reasons for why:

1. Cultural
2. Administrative
3. Geographical
4. Economic

Reference List:

· Turban, E. King, D. Viehland, D & Lee, J. 2008. Electronic Commerce: A Managerial Perspective 2008, Pearson Education, USA.

· Hardy, C. Dyki, M. 2006. Charles Sturt University MGT220 e-Commerce Study Guide.

· Ezine Articles: http://ezinearticles.com/?e-Marketing-Strategy:-7-Dimensions-to-Consider-(the-e-Marketing-Mix)&id=21976