internet on business_print

Information Technology.FSG

www.kizukigroup.com 1

Internet Technology and your Business- Understanding the Aspects of e-Business.

An Introduction and Guide

Francis Stevens GeorgeKizuki Group-



Telecommunications & Internet



Business Value of Telecommunications

Strategic Capabilities Example Business Value

Overcome geographic barriers

Overcome time barriers

Overcome cost barriers

Overcome structural barriers

Use the internet and extranet to transmit customer orders for order processing.

Provide information to remote locations upon request. Credit authorization.

Reduce costs of more traditional means of communication-Videoconferencing

Support linkages for competitive advantage-B2B EC

Reduce delay in order filling, improve cashflow by speeding billing.

Speed sales, less lost sales due to lack of information.

Reduce expensive business trips

Fast. Convinient services locked in customers and suppliers.



Strategic Business Value of Internet based applications

Marketing & Product Research

Sales & Distribution

Support & customerfeedback

InternetCapability

BenefitsTo company

OpportunitiesFor Advantage

Data for MarketResearch

Consumer responseTo new products

Environmentalscanning

Reach new customers

Low cost distribution

Multiple contactpoints at no incremental costs

Access to customerComments online

Immediate responseto customer problems

Increase Market Share Lower cost marginsEnhanced customer satisfaction

Adapted from Mary Cronin-Doing MoreBusiness on the Internet.



eBusiness & eCommerce



The Difference between e-Business & eCommerce

• E-Business is about interaction. It represents a more focused and comprehensive involvement of the organisation. The platform is attitude shift.

• E-commerce is about transaction. It represents one aspect of E-Business. The platform is hardware and software.



eComerce/eBusiness-Strategic Considerations

Business Strategy Technology Strategy Consideration

What is our value proposition? Is e-business an element?

Where are we going, and how long before we get there?

Can the internet accelerate the effort?

Where do we gain strategic advantage?

Can the internet provide additional leverage?

Who are our customers? Are they computer literate? Can the internet improve their buying experience?

Who are our suppliers? Do they have technology interface with our system?

What are the demands of our stakeholders?

Will web enabled commerce improve our valuation?



Investment Approach to eCommerce & eBusiness

Business Value

High

LowTime to Implement High

Short-Term Projects Operations Automation

Short-Term Strategies Long-Term Strategies

Web Storefront& e-catalog

WebBbrochures

InteractiveMarketing

IntergratedWeb Store

Self-servicesWeb Sales

CRM

CollaborativeExtranets

ProcurementAutomation

Customer SelfService

CommunityExtranets

Extranets andExchanges

SCM

E-Business

B2CB2B



How your company can use the Internet for Business

Inventory ManagementSystem

Head Office:Marketing,Electornic Commerce,Collaboration with customers,Prospects .

Business Partners-Email,document transfer,Discussion, extranent

THE INTERNET

Customers-Order, shop, get service/support.

Remote office-Intranet links,virtual teams,Interactive communications,Collaboration, computing

SuppliersExtranet for EC, accessInventory, replenish stock,Send documents, specs.



Example:Intranets-Enterprise Information Portal

Communicate and Collaborate with e.mail,Discussion forums, chatAnd conferencing

Communication and Collaboration

Business Operations And Management

Web Publishing

Intranet Portal Management

Secure, universalaccess to viewand use corporateexternal data

Author, publish,and share documents

ExistingE-mail, VoiceMail Systems

Existing databaseAnd EnterpriseApplications

HTML, MS Office,XML, Java and OtherDocument types

Existing Hardware And Networks

Centrally administerClients, servers,Security, directory,And traffic

IntranentEnterprisePortal

Employees

FIREWALL

Everyone

Internet

Extranet

Customers,Suppliers,Partners



Deriving Business Value from E-commerce Applications

GenerateNew RevenueSources

Reduce costs of doing Business

Develop New Markets & Channels

Attract New Customers

Increase customer loyalty & Retention

Develop New Web based Products



The Process of Discovering e-Opportunities

E-Operations•Automation•Supply chain recon & Int•Re-eng of primary infa•Procurement•Increase Parenting Value

E-Marketing•Improved and enhanced selling process•Improved customer experience

E-Services•Understanding customer needs•Provide excellent customer service•Knowledge•Construct customer options



Possible Benefits of E-Commerce System-Intangibles

Intangible Benefits Example•Improved information availability More timely and accurate

•Improved abilities in analysis OLAP and Data Mining

•Improve customer service More timely CRS

•Improve management decision making MIS/ESS

•Impoved competitive position System to lock in customers.

Intangible Benefits Example•Improved information availability More timely and accurate

•Improved abilities in analysis OLAP and Data Mining

•Improve customer service More timely CRS

•Improve management decision making MIS/ESS

•Impoved competitive position System to lock in customers.



Possible Benefits of E-Commerce System-Tangibles

Tangible Benefits Example•Increase in sales or profit EC based Products

•Decrease in information processing costs Eliminate unnecessay

document

•Decrease in operating Costs Reduction in inventorycarrying costs

•Decrease in required investment Decrease in inventory investment required

•Increase operational efficiency Less spoilage, waste, idle tume.

Tangible Benefits Example•Increase in sales or profit EC based Products

•Decrease in information processing costs Eliminate unnecessay

document

•Decrease in operating Costs Reduction in inventorycarrying costs

•Decrease in required investment Decrease in inventory investment required

•Increase operational efficiency Less spoilage, waste, idle tume.



Overview of E-Business Applications

E-BusinessApplications

TelecommunicationsNetworks

The InternetIntranetsExtranetsOther Networks

Enterprise Communicationand Collaboration

Internal Business Systems

Electronic Commerce

-Electronic Mail-Voice Mail-Discussion Forum-Data conferencing-Videoconferencing-Electronic Meeting

-POS-Web retailing-Online Auctions-Interactive Marketing-SCM-Electronic Fund Transfer-Online Banking

-Transaction Processing-Intranent Ent. Info. Portal-CRM-Workflow Systems-Activity Monitoring-Process Control-Management Support Systems



Business Model



Business Model

What is a Business Model?A system which defines how a firm will build and use its resources to offer its customers superior value profitably.

Business modelCustomer Value

ScopeRevenue sources

Connected ActivitiesImplementation

CapabilitiesInternet

EnvironmentFive Forces

Industry DriversIndustry Dynamics

Macro

Performance



Key Questions for your Business Model.

• Under what business model does my company operate? • How do we develop a model to ensure success?• Which business models are taking hold in my industry

and why? • Is my organisation capable of adapting to the required

business model /business model changes?



Business Models-Topography

Agora

DistributiveNetwork

AggregationValue Chain

Alliance

HierarchicalLow Value Integration High

Self Organizing

Con

trol

lin

g



Business Model-Questions

Component Questions for all models Questions specific to Internet business models

Customer value Is the company offering something distinctive?

What unique features of the internet allows you to offer something distinctive? Can we solve a specific problem

Scope To which customers are we offering our value?

What is the scope of customers that the internet enables us to reach? Does the net alter my product/service mix.

Pricing How do we determine price? Does the internet make pricing different?

Revenue Source Where do the mullah come from? What are the margins?

Are revenue sources different?

Connected Activities What set of activities do we have to perform to deliver value?

How many new activities must be perform? Can we perform existing activities better?

Implementation Organizational structure, systems, people and environment.

What does the internet do?

Capabilities Capabilities and capabilities gaps.

What new capabilities?

Sustainability How difficult for others to copy us? How do we keep making money?

Sustainability- easier or more difficult?



Practical Business Question,Why you cannot wait,

What you must do and know.



Practical Business Questions: We can work with you to answer some of them.

How do I move my traditional business to e-business? We have lot of information coming from various

sources. How can we collect, analyse and use it to support our business?

We are small company and do not have the resources to invest in e-commerce. what can we do?

We want to see the big picture. How? My business needs to get easy-to-use, analytical tools

to create good customers profiles. How can we do this?

We do not know the use of order Management? We sell and deliver tangible goods. What can the

internet do for us?

How do I move my traditional business to e-business? We have lot of information coming from various

sources. How can we collect, analyse and use it to support our business?

We are small company and do not have the resources to invest in e-commerce. what can we do?

We want to see the big picture. How? My business needs to get easy-to-use, analytical tools

to create good customers profiles. How can we do this?

We do not know the use of order Management? We sell and deliver tangible goods. What can the

internet do for us?



Why you cannot wait?

Lower costs today to develop and implement. Early investment for better pay back in the future. Leadership role rather than follower. Certain cost savings are immediate-so called ”hard costs”. Early starters create electronic structural barriers for

followers. Companies implementing technology are more likely to

meet customer needs than those who do not. Unprecedented market reach at home and abroad. Possible elimination of costly intermediaries.



The New Paradigm

Agri/Commodities

Industrial GoodsS

ervi

ces

Telecommunications

Logistics Banking Sofware Systems



A ”must” for Managers

Conceptual understanding of the technologies.

Application Integration. Listen, learn, understand and respond. Appreciate that e-business is a long

term proposition. Understand that e-business is evolving.



Its not the technology but its applications that counts!

Technology in itself will not create value. Focus on the big picture. Build a little, use it, build a little more. Your people MATTER

Key Advice



The Stakeholders-eBusiness Strategic Partners:

Partners who are planning for the future of your business. Operational Partners:

Partners helping you run your business today. Governance:

The individual applying the rules and regulations that are relevant to your business stakeholders.

Customers:The end purchasers.

Community:The people who are interested in your products and services, people who may or may not include your business customers.

Shareholders: Employees:

Strategic Partners:Partners who are planning for the future of your business.

Operational Partners:Partners helping you run your business today.

Governance:The individual applying the rules and regulations that are relevant to your business stakeholders.

Customers:The end purchasers.

Community:The people who are interested in your products and services, people who may or may not include your business customers.

Shareholders: Employees:



Management Information Systems



Why Management Information Systems

Competition in World MarketsGlobal Work GroupsKnowledge and informationKnowledge-now a key assetProductivityNew Product and ServicesFlat organisationsVirtual CompaniesIncreasing decentralizationLower transaction and coordination costsCollaborative work and Team work



Management Information Systems-Types

OperationalLevel Systems

TransactionProcessing

KnowledgeLevel Systems

Office Automation,Knowledge work

ManagementLevel Systems

Decision Support,(DSS)Management Infor (MIS)

StrategicLevel Systems

ExecutiveSupport (ESS)



Link between information Systems

ExecutiveSupportSystem

ManagementSystems(MIS)

ManagementSystems(DSS)

KnowledgeSystems

TransactionProcess



Management Information Systems-Uses

Mapping Structured, Semi-Structured and Un structured DecisionsBetter linkage between activities in the value chainPromote Quality (TQM)Manage Strategic TransitionsImprove product and servicesReduce Cycle Time



Systems Development & Organisational Change

Information Technology Organisational Change

Global Networks No longer constrain by location; transaction costs decline. Everyone linked through intranets.

Enterprise networks Collaboration, cross functional teams; customer focus increases, business process reengineering.

Distributed Computing Decentralization, empowerment

Mobile Computing Anywhere, anytime, work is portable, increases flexibility.

Digital Work Processes Accessibility, work flows automated, shared documents,conference calls



Who we are and what we do



What we do? Calculate ROI and related financial ratios/analysis

on eCommerce & eBusiness venture Analyse your customers' expectations related to

eBusiness/ecommerce Track the impact of technical innovations on your

industry Determine the best eCommerce strategy for your

specific industry Determine your back end logistics/supply chain

management Define the steps you can take to Webify your

business

Calculate ROI and related financial ratios/analysis on eCommerce & eBusiness venture

Analyse your customers' expectations related to eBusiness/ecommerce

Track the impact of technical innovations on your industry

Determine the best eCommerce strategy for your specific industry

Determine your back end logistics/supply chain management

Define the steps you can take to Webify your business



E-Business/IT Strategic Planning Process

Customer and Business ValueVisioning

E-BusinessStrategies andModels

E-Business/ITStrategies and Architecture

E-Business ApplicationDevelopment andDeployment

Key Insights Key Objectives Priorities

Feedback FeedbackMore Questions



Applications Development

PrototypingCycle

Identify an end usersE-Business Requirements

Develop E-BusinessSystems Prototypes

Use and Maintian the Accepted E-businessSystems

Revise the Prototypesto better meet End userrequirements

MaintenanceCycle

Investigate/Analysis

Analyses/Design

Design/Implementation

Implementation/Maintenance



Feasibility of E-Commerce/E-Business Systems

OrganizationalFeasibility

EconomicFeasibility

TechnicalFeasibility

OperationalFeasibility

•How well a proposedE-commerce systemsfits the companyplans

•Capability, reliabilityand availability of hardware, software and applications management

•Acceptance of employees•Management support•Customer and Supplier acceptance

•Savings in labour costs•Increase sales revenue•Decreased investment ininventory•Increased profits



Who are we? Young Consulting company with a team that has

25 years of combined experience in technology, Business Management and Development issues in Africa.

A diverse team in age, educational, professional experience and nationalities.

A company that has key strategic partners leveraging knowledge in all aspect of business, development and technology.

A company that has as much to learn as it has to share.

Young Consulting company with a team that has 25 years of combined experience in technology, Business Management and Development issues in Africa.

A diverse team in age, educational, professional experience and nationalities.

A company that has key strategic partners leveraging knowledge in all aspect of business, development and technology.

A company that has as much to learn as it has to share.



Transform Ideas to Reality

An idea, perhaps a thought

The path from Idea to a service,product or project is like a plane flight. Everything has to be planned for, includingthe unknown….

The rest is history…..



Our Information Kizuki Group. Kongens Gate 24. 0153 Oslo.

Norway.Tel: 47 24 14 99 53/ 47 916 88 270. Fax: 47 24 14 99 98. ePost: [email protected]

Represented in South Africa Nigeria, Cameroon, Ghana, Sierra Leone

Kizuki Group. Kongens Gate 24. 0153 Oslo. Norway.Tel: 47 24 14 99 53/ 47 916 88 270. Fax: 47 24 14 99 98. ePost: [email protected]




Sources Consulted Our Research Cyberstrategy-Pauline Bickerton, Mattew Bickerton,Kate Simpson-

Holley. Published in Association with the Chartered Institute of Marketing.

Business Data Communications and Networking. 6th Edition. Jerry FitzGerald & Alan Dennis.

Essentials of Information Management Systems. 3rd Edition. Kenneth C. Laudon & Jane P. Laudon.

E-Business Readiness-A customer –focused framework. James Craig & Dawn Jutla.

E-Commerce: Formulating Strategy, Robert Plant Introduction to Information Systems-Essentials for the Internet worked e-

Business Enterprise. James A. O’Brien

Our Research Cyberstrategy-Pauline Bickerton, Mattew Bickerton,Kate Simpson-

Holley. Published in Association with the Chartered Institute of Marketing.

Business Data Communications and Networking. 6th Edition. Jerry FitzGerald & Alan Dennis.

Essentials of Information Management Systems. 3rd Edition. Kenneth C. Laudon & Jane P. Laudon.

E-Business Readiness-A customer –focused framework. James Craig & Dawn Jutla.

E-Commerce: Formulating Strategy, Robert Plant Introduction to Information Systems-Essentials for the Internet worked e-

Business Enterprise. James A. O’Brien



Selected Industry

The Internet effect on these Industries



The Pharmeuctical Industry



Pharmaceuticals-The Reality

• The internet is already changing the way pharmaceuticals companies deal with each other and their customers.

• Internet related R&D is already having far reaching implications in the industry according to 50 R&D executives from large pharmaceuticals.

• Companies will have to move quickly and decisively if they are to stay ahead of the technology driven changes in the industry.



Pharmaceuticals-Action

• Design web-enabled strategies for owing and trading in three key assets:

• Capability Assets-operational excellence• Science assets-insight & knowledge

management• Consumer value assets-feedback from

consumers in creating new drugs. xxxxxx have a choice in investing in these assets now,

while the healthcare sector on the internet is still forming (particularly in Africa) OR being caught by those who have already done so.



Pharmaceuticals-A New Concept (e-

detailing)

• E-detailing is using internet-based communications to provide a value added marketing channel to reach prescribers and complement the activities of sales reps.

• The key goal is to maximise the effectiveness of marketing and detailing efforts and offer physicians a range of convenient interactive channels.

• Aventis is one of the well known companies that is pioneer with this new concept.



The Banking Sector


www.kizukigroup.com 49Transport

Maintenance, Infr. Operations

Basic Services

Server hosting, Data Backup, System Integration

Transaction Support

Payments, Billing, Alerts, 2-sidedpayments flow, Security,

Presentation Services

Content conversion, Suitability for small & low resolution screens in mobile phones

Personalization Support

End-User information mgmt., profiling and more effective targetedsales

User Applications

Banking, Purchasing, SMS, News,

Entertainment/Games, etc.

Content Aggregation

Design and Operation of Service Portals, search facilities, etc.

Increasing Value Proposition

& Profitability

M-Commerce ValueChain



Content Providers

Tele-Operators

Banking Device Vendors

Key Players….Banking



The Educational Sector



IT in Education-The Case• In a world that is increasingly knowledge based, new

information technologies provide and economical way of providing the continuous education that is needed.

• IT enables a shift toward learning experiences that are asynchronous rather than synchronous.

• Modern technology makes it cost effective to reach new students cost effectively. IT offers economies of scale. After a(sometimes large) front-end investment, the cost of usage per incremental student is apt to be low. Moreover, access to very large amounts of information can be obtained at low incremental costs.

• It eases the limits of time and space for education activities. Access to lecturers and courses through IT is particularly important for the increasing number of non-traditional students in higher education, with often jobs and family to attend to.



IT in Education-Current Situation

• Due to rapid changes in business and industry, re-skilling is becoming an important requirement.

• Life long learning is becoming a necessity.• External vocational training is provided by private

sector companies. Business and others are turning to these institutions to meet their needs.

• Development issues are increasingly becoming a partnership between the private sector.

• Residential costs are an inhibiting factor for many. IT makes it possible to address this factor.

• Increasing demand for learning from non-traditional sector.

• Collaboration is now a must as no one person can have all the skills and competencies needed in today's high performance workplace.



IT in Education-What should Institutions do?

• Make a concerted effort to reach the ”new” consumers-life long learners, knowledge workers, etc.

• Enable flexibility in terms of what, where and how.• Increase productivity-faculty and student alike.• Respond to a new definition of quality.• Redefine traditional structures and approaches to serve

society in the information age and capitalise on the opportunities present.

• Manage and control the shift from campus-centric to a consumer-centric model.

• Create and develop well defined market niches which are profitable and sustainable.



IT in Education-Development of Value Proposition

Servedmarkets

Design/TechnologyFunctionality and specification

Penetration

RelativeMarket share

Customer-perceivedRelative quality(Functionality)

Relative price(Higher)

Relative value

Efficiency /functionality relativeto customer demand

Reduced cost

Relative cost (Lower)

Results

Content-adaptation

Systemsintegration



IT in Education-What we offer

• Systems Analyses-development of the project, identify the stakeholders and project perspective.

• Provide the Learning Management System and the delivery mechanism for the courses.

• Assist with the design/pedagogic aspect of the system.• Assist and provide training for the learners.



The Hotel Sector



Travel Industry

• Between 1998-2003, revenue forecast to grow by 800%. i.e. $2,2b-16b (Jupiter)

• Air Segment is responsible for 80%.

• Hotel Booking is 25%.

• 2003 Hotel Booking will reach 35%

• This is some $11 billion in monetary terms.

• Visits to travel related sites has grown from 150 million in 1998 to reach 400 million in 2002



Travel Sites Visited by Online Consumers

0 20 40 60 80

%

Airline Supplier

Online Agency

Hotel Supplier

Car Rental Supplier

Cruise

Source Juipter Communication May 2000



Services used at Travel Related Sites

Source Juipter Communication May 2001

0 10 20 30 40 50 60 70 80

Researching Airline Ticket

Researching Hotel Rates & Info

Deciding w here to go

Researching Cruise Package

%



Implications-Strategic

• Internet Reservations through own branded websites

• Reservations from Intermediary travel sites will continue to grow until 2003 (Why?)

• Reducing the cost of distribution is the key driving hotels to the internet

• Not unusual for 15-20% of Total Value Booking

• “Look-to-book” ratio is very important to assessing the real impact of e-commerce.



“Look- to- Book”

• 6,7 million Americans actually made a booking online.

• 33,8 millions made travel planning on the internet.

• What is the ratio?

• Does it suggest the impact of e-commerce greater or less on the lodging industry?



Why Does a Hotel Need a Website?

• Competition• Advertising and Publicity• 24 hour exposure• Exclusiveness• Specialized Marketing• Highly Desirable Markets• Easy update• Added value Service• The Smart Money



Hotel Distribution Channels

• Internet impact both existing channels and via entirely new ones

HotelCRO Switch GDS

TravelAgent

Consumer

HotelCRO

Switch GDSTravelAgent

Consumer

HotelCRO

Switch GDS Consumer

Switch Consumer

Consumer

HotelCRO

HotelCRO

GDS Environment

Int Environment



Deductions

• Internet users invited to visit travel sites containing hotel information and booking capability created or service by a variety of hotel, intermediary and destination companies

• Internet reservations come via traditional GDS and Internet only channels, flowing through the CRS

• Internet reservations are delivered direct-to-property via internet connections, email or even Telex

• Voice centres are processing bookings for which the research and buying decisions were made on travel websites

• Some percentage of walk ins learned about the property via the internet.



The Present SituationInternet Users

WebSites with Hotels

TICommercial

SitesReps

GDSChains

IndependentIndependent

ChainChain Chain

Commercial Sites

Switch

Chains



Explanations

• Hotel chains sponsor their own branded internet sites, and also provide their properties status to other sites via intermediary. Mainly Pegasus and Wizcom (Switch companies)

• GDS company Sabre sponsors and provides data and looking capability to its own Travelocity.com site

• HotelBook.com is both a representation and a reservation-systems solution company.

• Switch and ADS companies also operate their own sites (www.placestostay.com)



What makes a Good Website

The site must cater to the audience Website does not exists in isolation Not an online brochure 24/7 Sales and Marketing Tool MUST have a Booking Engine Think bandwidth



What makes a Good Website-Things not do

Frames, or heavy JPEGsHide the Booking EngineNo bookable hotel packagesNo customer e-mail captureNot easy to find on the web Incomplete key words



What makes a Good Website-

Good PlanningCustomer focusedUser FriendlyEasy to navigate



Promoting your Site

Meta tags Key Words Search Engine Submission Sign up for key words-Realnames.com Affiliate Marketing Collateral Promotion Track



E-Commerce for Competitive Advantage



Introduction

• Determine your current position• Born on the internet?• Move to the internet?• Virtual Organisation?



Pillars of Success-I –Moving to the Net

• Technology:• Internet

• Intranet

• Extranet

• ERP

• Datawarehouse

• Market• Branding (implications)

• Relationship Management(implications)

• Same Target market

• Has core marketspace moved?

• Market Growth and Segmentation



Pillars of Success-II-Moving on to the Net

• Service:• Expectations of new

service level• New value proposition• Reasses your service

value chain

• Brand• Strong Brand dot com• Basis of dot.com brand• Same Target market• Challenges• Amenendment or

complete new service provision

• Will existing brand change



Pillars of Success-Above All

• Leadership

• Infrastructure

• Organisational Learning



Internet Marketing



Introduction-Internet Marketing

What is Internet Marketing:…process of building and maintaining customer relationships through online activities.



The Process

Unlocking ValueIdentifying Unment and underserved NeedsIdentify Target MarketCompany ResourcesAssess Competitive and Technology OpportunitesMake go/ No-go Assessment



Unlocking Value

….means creating value, unlocking valueTrapped value-more efficient value systems-easy information, efficient booking systemsNew Value-customise offering, build community, introduce new functionality



Identifying Unmet and /or Underserved Needs

Customer Decision ProcessWhat steps does a typical customer go through?Who gets involved and what roles do they play?Customer Decision ProcessExperience of the customer in each stage



Determing Target Market

Demographic

Geographic

Behavioural



Determing Target Market -cont

Occassional (situational)

Psychographics

Benefits

Beliefs and attitudes



Actionable and Meaningful Segments

Actionable SegmentationEasy to identifyEasily reachedCan be described in terms of growth, size profile attractiveness



Meaningful Segments

Meaningful Segmentation

Behave similarly, while customers across segments behave in different waysProvides insights into motivationCorresponds to a set of barriers customers face when they buy or use the product or serviceDifferences is large enough to warrant a different set of actions by your company.



Company Resources

Resource System….discrete collection of individuals and organizational activities and assets that, when taken together, create orgainsational capabilities

Customer-Facing-brand name, well trained sales force, and multiple distribution channelsInternal-technology, product development, economies of scale.Upstream-relationships, partnerships



The Impact of the Internet on Porter’s Five Forces

Risk of Entry by Potential Competitors

•Enabling technology, barriers to entry go down•New Market entrants can acquire technology easily•High technology costs and expertise increases barriers to entry

Bargaining Powerof suppliers

•Direct connection to customers; minimizes supplie’s bargaining power.•Suppliers can access en-users through the internet, minimizing the need for middlepersons.•Differentiation becomes more difficult as access to suppliers is equalized.•Fewer barriers to entry result in increased buyer competition thus boosting supplier bargaining power.

Rivalry AmongEstablished Competitors

•Internet minimizes ability to product differentiate. Less differentiation means more competition over price.•Low barriers to entry open markets to heavier competition.•Variable costs decrease as percentage of fixed costs, leaving price discounting as primary method of competition.

Bargaining Powerof Buyers

•Reduces bargaining power of channels•Consumers have information and ability to search for better deals•Decrease switching costs

Threat of Substitute ProductsEspecially for internet related productsInternet has introduced new business methodologies-adding additional products



Creating Competitive Advantages

E-Marketing StrategyPositioning and target market selection

Marketing Tactics(4Ps)

Competitive AdvantagesSuperior customer value

Low cost producer

Investment to Createand Sustain Advantage

Distinctive CompetenciesSuperior skills

Superior resources

Performance OutcomesSatisfaction

LoyaltyMarket ShareProfitability



Our Information Kizuki Group. Kongens Gate 24. 0153 Oslo.

Norway.Tel: 47 24 14 99 53/ 47 916 88 270. Fax: 47 24 14 99 98. ePost: [email protected]


Kizuki Group. Kongens Gate 24. 0153 Oslo. Norway.Tel: 47 24 14 99 53/ 47 916 88 270. Fax: 47 24 14 99 98. ePost: [email protected]
