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Information Systems/Technology Management e-Business Focus Key Strategic Choices: :04 Presented by Professor Dan Remenyi [email protected] 24 May 2017 1 Internet Savvy Organisations An Internet Savvy Organisation is one which understands the potential of using the Internet and the Web and has been prepared to unsure that it has obtained a suitable degree of benefits from their use. 24 May 2017 2 Definitions How do you define the best web site and how do you define the worse web site? It has been claimed that the best web sites are Dell, Hothothot, EasyJet, Danni Hard Drive, Intuit, Harry and David, DoveBid, Intel? 24 May 2017 3 Strategy and the Web The web can be used to enhance strategy in a number of different ways One-way Information Dissemination Focus Two-way Communications Focus Transactional Ability Focus Distribution Capability Focus 24 May 2017 4 The Four Virtual Spaces:Albert Angehern Channels for economic agents to display and access company product and service related Virtual information information space VIS Virtual communication space VCS Channels for economic agents to engage in relationship building activities Traditional market space Virtual transaction space VTS Channels for economic agents to initiate and execute business related transactions 24 May 2017 Virtual distribution space VDS Channels for economic agents to distribute products and services 5 Evolution of Internet strategies - Albert Angehern 4 2 VIS 1=Simple, generic presence 2=Advanced, generic presence 3=Simple, customised presence 4=Advanced, customised presence VCS 3 2 1 4 3 1 Traditional products & Services 1 4 1 2 3 VDS VTS 2 24 May 2017 3 4 Initial internet strategy adopted by the large majority of providers of traditional products and services Specific Internet strategy adopted by providers of digital goods such as media and software publishers 6 One-way Information Dissemination Focus Using internet technology for one-way information dissemination: Sales materials Product information Service details Staff particulars Terms and conditions of sale 24 May 2017 7 Benefits of one-way information dissemination Centrally updateable Minimal distribution costs Tight version control Reduced costs especially development, printing and stationery costs 24 May 2017 8 Competencies for information dissemination focus Determination of material to be published Creative presentation skills Web-database technologies Ensuring information is always up to date 24 May 2017 9 One-way information dissemination costs Relatively inexpensive to set up depends on volume of information involved Substantial costs involved in maintaining the system and keeping upto-date Changes in products, staff, conditions of sale etc. 24 May 2017 10 Two-way Communications Focus Using internet technology for two-way communications - provides a channel for conversation with stakeholders: e-Mail and conferencing Product and service feedback Suggestions of new ideas Possibility for strategic alliances 24 May 2017 11 Benefits of Two-way Communications Facilitates corporate learning by allowing easy access to a conversation between the organisation and its stakeholders Nature of benefits delivered by two-way communications is dependent on the market the product the type of industry etc... 24 May 2017 12 Competencies for Two-way Communications Focus Staff with appropriate technical competencies Business communications staff An understanding of the value of sharing and of course an active will to achieve this 24 May 2017 13 Two-way communications costs Relatively inexpensive to set up - in fact likely to be less expensive that information dissemination Cost is related to the two-way traffic between the organisation and the stakeholders Replying to feedback, criticism etc can absorb very substantial amounts of time 24 May 2017 14 Transactional Ability Focus Using internet technology for transactions Allows offers for sale to be made, sales to be concluded and payments to be received for most products and services. Especially the case with homogeneous (airline seats) and commodity (textbooks) type products Processing goods returned documentation will also be handled by the same systems 24 May 2017 15 Transactional Focus Benefits Primary benefit is speed of processing and reduction in administrative costs 24 May 2017 16 Competencies for Transactional Focus Staff with appropriate technical competencies Staff with appropriate administrative, financial and negotiating competencies 24 May 2017 17 Transaction focus costs Depends on whether sales process is fully integrated into the organisations inventory, transport and ledger systems On a standalone basis – i.e. no backward integration the cost is relatively low - but leads to logistic nightmares Fully integrated systems with connections to physical distribution require extensive tailoring of software with the inevitable costs 24 May 2017 18 Distribution Capability Focus Using internet technology for distribution facilitates access to products and services that lend themselves to digitisation. Currently constitutes Financial institutions - banks, insurance and betting Airline, hotel, theatre reservations Software To some extent music and video (bandwith restrictions which will increasing be removed) 24 May 2017 19 Benefits of Digitised or Virtual Distribution Fast access to the marketplace Inexpensive (potentially) global presence Tax free Reduced paperwork 24 May 2017 20 Competencies for Distribution Focus Entirely dependent on the product or service being distributed which could range from books, music, consultancy or help or call desks 24 May 2017 21 Distribution Costs May be relatively inexpensive with the final amount spent being affected by the sophistication of the product or service, the amount of control required and degree of automation and integration into the corporate systems 24 May 2017 22 Potential strategic impact Extracting value from market space Reach out to a greater market Get to know the client base better Add new products and services Combine products and services Create experiences e-Business 24 May 2017 23 In the Eye of the Public e-Business happens in the eye of the public It is therefore strategic in the sense that it directly affects your market place Make sure you are showing the best face of your company 24 May 2017 24 e-Business and marketing e-Business opens up new marketing opportunities which can make a big difference 24 May 2017 25 Traditional Richness Vs Reach Dilemma Richness Reach 24 May 2017 26 E-Business Richness Vs Reach Richness Reach 24 May 2017 27 The RRA Cube High Richness Medium High Low Medium Low Low Medium High Reach 24 May 2017 28 Old principles don’t work so well any more? Interruption marketing has reigned in the media for the last half century Consumers have had enough! It is estimated that an average consumer sees about one million marketing messages a year – that is 3,000 per day A trip to the supermarket can offer you 10,000 marketing messages 24 May 2017 29 Old principles don’t work We have a finite amount of attention We have a finite amount of money The more products we are offered, the less money there is to go around In order to capture our attention and get us to spend more, marketers spend more money And the more that is spent, the less effective is the result …….. 24 May 2017 30 Marketing speak for the Webage Permission marketing One-2-One marketing Personalised marketing Opt-in versus opt-out Viral marketing Customer relationship management 24 May 2017 31 Permission Marketing on the Web The marketer offers the prospect an incentive for participating Having got the consumers attention, the marketer offers a curriculum over time, teaching the consumer about the product or service The incentive is reinforced to guarantee that the prospect maintains the permission The marketer offers additional incentives to get even more permission from the consumer Over time, the marketer leverages the permission to change consumer behaviour and turn it into profit 24 May 2017 32 Permission marketing Anticipated People look forward to hearing from you Personal Messages directly related to the individual Relevant Marketing is about something the prospect is interested in 24 May 2017 33 Incentives to participate Must be overt, obvious and clearly delivered Information Entertainment Free gifts Money 24 May 2017 34 Remember the user “Amazon sends me newsletters when it wants, not when I want them. I receive about 100 e-mails a day. At least fifty of them are commercial. I don’t even want to open them, never mind read them” Clearly there is no permission here! 24 May 2017 35 Use attention gained over time Use the attention gained to teach the consumer about the product or service over time Every step must be relevant, interesting and useful 24 May 2017 36 Reinforce the incentive Adjust the incentives being offered and finetune them for each individual prospect and Begin to increase the level of permission To gather more personal data To offer a new category of product To provide a product sample Range of permission is really only limited by its relevance to the customer – get this wrong and you are out! 24 May 2017 37 Permission marketing at work Kids camp owner in the US knows parents won’t choose a summer camp for their kids from a newspaper ad. She advertises at camp fairs and in magazines for permission to send a video and/or brochure about the camp The only goal of the video/brochure is permission to have a meeting The consumer, now fully qualified, having seen testimonials, photos, camp facilities and happy campers is ready to be sold the camp, … in person 24 May 2017 38 What is the cost of permission Nothing comes for free! A brokerage house on Wall Street pays $15 in media acquisition costs for permission to call a potential customer on the phone 24 May 2017 39 One-2-One marketing Focus on increasing sales to existing consumers as opposed to finding new ones Know the lifetime value of your customers 24 May 2017 40