meljun cortes strategic approach of e-commerce

8/9/2019 MELJUN CORTES Strategic Approach of E-commerce

1/25

Strategic Approach of E-

commerce

Earl Jann Josef Editha NarragaCarlo Medina

JuneDennis


2/25

Until now, most electronic commerce systems have beendesigned for commodity chemical exchanges and werecumbersome for specialty chemical producers or purchasers toimplement in a practical manner New approaches are being

developed to meet the uni!ue needs of our industry, offeringstrong mar"eting capability, front#end exchanges, and user#friendly procurement systems $rivate or public exchanges areachievable, or focused systems to address obsolete ordistressed inventory %hese features offer the added benefit ofsmooth integration with both suppliers& and manufacturers&

materials management systems and E'$&s (Enterprise 'esource$lanning)

%hese new approaches can deliver features at a fraction of thecost of grass roots solutions with complete customi*ation withinshort time spans %hese new approaches offer the ability to dealwith specific lots of materials, searchable by specificationvariations, product name, nature, etc Management of informationsuch as Material +afety Data +heets and %echnical Data +heetsare easily implemented new solution has been needed to fulfillthe promise of Ecommerce


3/25

-y early .///, it had been recogni*ed that neithersoftware providers nor the on#line chemical

exchanges addressed the difference betweencommodity and specialty chemicals, creating abarrier for fully transactional on#line ordering andfulfillment of specialty chemicals 0ith new

approaches, our industry need not force fit over1// years of organic chemistry progress andcreativity into an existing model %hese novelapproaches offer a simple, cost effective and

seamless E#Commerce implementation meetingthe uni!ue needs of our industry %his flexibility isadaptable to fit strategic ob2ectives


4/25

Existing Approaches

Many E#-usiness implementations have been documented, butmost fall into four categories3

1 $rivate initiatives developed in#house or by contract %hese arebuilt from scratch, providing virtually any customi*ation desired %hisapproach is costly and perhaps ris"y. 45ertical Communities6 are 4shared6 systems offering 4store#fronts6 and limited customi*ation vertical community does not

preclude a private initiative s would be expected, participation incommunities can offer lower cost alternatives, but with feweroptions, and compromise highly desirable business strategyelements7 +hared 8nitiatives with other companies or businesses within acorporate family are beginning to appear s a 4co#operative6 effort,

these can often result in compromising elements of the businessstrategy9 %here is off#the#shelf software available, offering some degree ofcustomi*ation, but usually fitting their model to the capability of thesoftware %he hardware platform and hard resources to support theimplementation are also re!uired


5/25

Failures

%here have been high profile failures of E#

Commerce business models in the chemicalindustry :ur wor" has revealed that thesefailures are primarily related to the following3

;


6/25

=irst is the critical importance of developing a sound overallbusiness strategy capable of incorporating the desirable featuresof E#business successful E#business implementation for ourindustry should3

1 -e designed for 4performance products6 vscommodity products. -e lot specific7 -e easily integrated into E'$ systems

9 :ffer low operational cost ? ideally reside onthird partyhardware

New Approach

=rom the lessons learned already in this dynamic part of theindustry, we have observed "ey needs for our industry ?

including manufacturers and raw material suppliers


7/25

@ -e customi*ed

A -e secure and reliable

B :ffer implementations and capabilities,including3; 8nformation exchange (data sheets, M+D+, etc)

; daptable ## procurement and sell#side activities; 4:ne to one6 4:ne to Many6 transactions; +tandard and reverse auctions; nonymity ? selling out of spec materials

; 8mplementation +peed; Can capitali*e on new mar"eting channels ?branded vs unbranded sales to specific end use,or geography


8/25

New approaches to E#commerce offer theseimportant features in an economical and easy toimplement pac"age s an pplication +ervice$rovider, it&s accomplished through thedevelopment of prewritten code 8mplementationcan be completed in as little as thirty days at a

fraction of the cost of grass rootsimplementations %he implementation resides ata third party location, and is ideal for small tomedium si*ed businesses within large

corporations, or independent companiespreviously unable to consider E#commerceseriously


9/25

E#Commerce +trategy$rocess


10/25


11/25

#ur $ange of Eco%%erce Solutions

ECommerce $artners is a full#spectrum digital agency with service offerings thatrange from 8nternet +trategy and 'e!uirements to vendor integration pro2ects anddedicated site hosting :ur +olutions include3

;Eco%%erce Strateg&' 'emember the > $s3 $roper $reparation $revents $oor

$erformance 0e&ll ensure your site&s success through improved site strategy andre!uirements#definition using our uni!ue Ecommerce 'e!uirements +pecifications(E'+) methodology

;Significantl& (ncreased )onversion through (%proved *ser Experience' :urUser 8nterface specialists will help ensure your site architecture, navigation andexperience are optimi*ed for maximum conversion and sales

;(nternet areting and Search Engine #pti%i+ation' $erhaps your site isfunctioning fairly well, but it&s not getting sufficient traffic :ur team provides +E:and targeted online mar"eting solutions to ensure you gain exposure to the specificaudience demographics you need


12/25

;Eco%%erce ebsite -esign -evelop%ent' 0hether you are building a new site or want to overhaulyour existing one, ECommerce $artners is your one#stop full#service shop for an end product that deliversresults 0e have experience with all the ma2or platform vendors, and our expert team constantly reviewsthe latest options from content management systems to catalogues, as well as the latest technologies andtrends 0e also have a talented in#house visual design team, A Designers and never rely on generictemplates

;)usto% Shopping )art' 0e adapt the +hopping Cart process to the specific re!uirements of yourbusiness %his dramatically reduces the shopping cart abandonment rate far below industry standards

;)usto% Solutions' Do you have uni!ue business or technical re!uirements that prevent you from usingout#of#the#box e#commerce solutionsF %hat&s our specialty 0e&ll conceptuali*e and deliver tailoredapplications that will meet any need

;/rd 0art& Application (ntegration'


13/25

;Support aintenance' 0e can increase the performance of your site ?guarantied Get us do the necessary optimi*ation to ensure your site is bettere!uipped to handle your traffic and customer service !ueries 0e&ll also improveyour overall site performance, stability and robustness

;Eco%%erce 1osting' 'eliable and scalable hosting is part of our outstandingcustomer service re your sites loading !uic"ly, and is the administrative interfaceeasy to wor" with and configurable to your needsF 8s someone overseeing yourhosting to ensure it&s always up and runningF 0e offer our clients a compellingdedicated hosting solution


14/25

#ur ethodolog&

e swear b& our process because it wors2 +uccessful advanced ecommercesolutions re!uire clear goals, precise planning, and a winning strategy ECommerce$artners has created a uni!ue methodology for our ecommerce services calledthe Eco%%erce $e3uire%ents Specification 4E$S5that leverages our extensiveindustry expertise to help you achieve lasting success %he below steps outline it in anutshell

%he first step in our process is to understand your product, your industry, your valueproposition, as well as the target audiences and your competitive environment %hisis done by performing intensive research, data#collection and analysis Next we plan

how to satisfy all the needs and re!uirements of each potential target audiencethrough use of different personas by user segment %his ensures the maximum rangeof !ualified traffic and conversion =inally we create a blueprint and roadmap thatclearly outline the complete pro2ect scope and the implementation methods %hisbenefits the client by illustrating the final product and provides clear instructions forthe implementation team


15/25

%he complete deliverables of the E'+ include Creative 'e!uirements, =unctional'e!uirements, +E: 'e!uirements, +earch 'e!uirements, Content 'e!uirements and%echnical 'e!uirements 8t also contains the functional design of information architecturewireframes, sitemaps and process flows and recommends to what extent customdevelopment and 7rd party applications will be necessary during implementation, or whether

standard ecommerce website tools could suffice

%he E'+ is a stand#alone deliverable that can guide development by either ECommerce$artners or a 7rd party team 8f you choose ECommerce $artners, the implementation phasewill begin, which we term the Eco%%erce -evelop%ent odule 4E-5

%he EDM produces tailored solutions to meet all the re!uirements as defined in the E'+ %heEDM encompasses the Design, Development, H, User cceptance %esting, Migration andGaunch processes that are involved in any professional website development Each step isthoroughly planned in advance in the E'+ phase, and then implementation is carefullychoreographed and managed to ensure the best results


16/25

VALUE DRIVERS OFE-COMMERCE


17/25

bstract

%he rapid emergence of e#commerce is radically transforming the businesslandscape +tartup firms are capturing new opportunities in the electronic mar"etplace through innovative business models Established firms are racing to transformand adapt their old business models to the new environment nchored in the

entrepreneurship and strategic management literatures, we develop the theoreticalfoundations of the business model construct, which depicts the ways in which valuecreating transactions are enabled by a networ" of firms, suppliers, complementors,and customers 0e examine the value creation potential of business models of >I merican and European e#commerce companies that have recently become publiclytraded corporations rounded in the rich data obtained from these case studies, we

develop a value driver model that enables an evaluation of the value#creationpotential of e#commerce business models along four identified dimensions, namely,novelty, loc"#in, complementarities, and efficiency :ur central proposition is that afirm&s business model is an important locus of innovation and a crucial source ofvalue creation for all sta"eholders


18/25

8N%':DUC%8:N

s we enter the twenty#first century, e#commerce, with its dynamic, rapidly growingand highly competitive characteristics, promises new avenues for the creation ofwealth Established firms are creating new on#line businesses, while new venturesexploit the opportunities the 8nternet provides %hese developments generated morethan K>// billion in revenues in 1III, representing about @L of the U+ D$, and agrowth rate of over 1//L per year since 1II7 %he sale of goods by U+ firms overthe 8nternet was estimated to be K1A/ billion in 1III %his figure is predicted toreach K17 trillion by .//7 lthough U+ firms are considered world leaders in e#commerce, the rapid growth of businesses that use the 8nternet as a medium is a

global phenomenon Europe is expected to bridge the e#commerce gap with the U+by experiencing triple #digit growth in this area over the next three years -y .//9,European enterprises are expected to have on#line sales of K1@ trillion, whichrepresents about @7L of total expected European trade %he increase in thenumber of ecommerce transactions at ma2or web sites (@/,/// per day in 1IIIcompared to .I,/// per day in 1IIB) highlights the extraordinary growth and

transformation of this new business landscape


19/25

E#commerce is clearly generating tremendous new wealth, mostly through entrepreneurialstart#ups and research corporate ventures 8t is also transforming the rules of competitionfor established businesses in unprecedented ways :ne would thus expect the sub2ect of e#commerce to have attracted the attention of scholars in the fields of entrepreneurship andstrategic management 8ndeed, the advent of e#commerce presents a strong case for theconfluence of the entrepreneurship and strategy research streams, as advocated by ), strategicnetwor" theory (Dyer and +ingh, . 1IIB), and the transaction perspective (0illiamson,1IA>) business model depicts the ways in which transactions are enabled by a networ" offirms, suppliers, complementors, and customers 0e suggest that this relatively newconstruct in the academic literature fosters a deeper understanding of the strategic behaviorand value creation in this emerging arena than is possible with other units of analysis, suchas the firm or the industry 0hile the business#model construct applies to both on#line andoff#line businesses, the rapid growth of electronic mar"ets highlights the need for rethin"ing

the unit of analysis in entrepreneurship and strategy


20/25

8n the second part of the paper, we develop a model to describe the value drivers of e#commerce business models :ur theory development is grounded in observations that emergefrom data on e#commerce business 8n order to identify the ma2or value drivers of e#commercefirms, we study the business models of >I European and merican e#commerce firms thathave recently become publicly traded corporations %he value driver model enables anevaluation of the value#creation potential of different e#commerce business models along fouridentified dimensions, namely, novelty, loc"#in, complementarities, and efficiency %hese are

explored in more detail below

:ur central proposition is that a firm&s business model is an important locus of innovation anda crucial source of value creation 8t goes beyond the value that can be reali*ed through theconfiguration of the value chain ($orter, 1IB>), the formation of strategic networ"s among firms(Dyer and +ingh, 1IIB), or the exploitation of firm#specific core competencies (-arney, 1II1)

%he term 4value driver6 refers to a factor that enhances the total value created by a businessmodel %otal value created is the sum of all the values that can be appropriated by theparticipants in a business model, the firm, its partners, and its customers (-randenburger and+tuart, 1II@) -y addressing the central issues in e#commerce that emerge at the intersectionof strategic management and entrepreneurship, we hope to contribute to theory developmentin both fields


21/25


22/25

6irtual %arets

5irtual mar"ets refer to settings in which business transactions are conducted viaopen networ"s based on the fixed and wireless 8nternet infrastructure %hesemar"ets are characteri*ed by high connectivity (Dutta and +egev, 1III), a focus on

transactions (-ala"rishnan, umara and +undaresan, 1III), the importance ofinformation goods and networ"s (+hapiro and 5arian, 1III), and high reach andrichness of information (Evans and 0urster, 1III) 'each refers to the number ofpeople and products that are reachable !uic"ly and cheaply in virtual mar"etsrichness refers to the depth and detail of information that can be accumulated,offered, and exchanged between mar"et participants 5irtual mar"ets have

unprecedented reach because they are characteri*ed by the near lac" ofgeographical boundaries ny discussion of national mar"ets and regional barriersto entry (-artlett and hoshal, 1IBI) is thus less relevant in the case of businessesthat allow instant access to customers and suppliers across regional and nationalborders


23/25

-ATA AN- ET1#-

'esearch strategy lac" of prior theori*ing about a topic ma"es the inductive case studyapproach an appropriate choice of methodology for developing theory (Eisenhard, 1IBI)I e#commerce firms 0e had fieldresearchers ta"e notes for each firm on about >/ mainly open#ended !uestions that had been

enumerated in a !uestionnaire %he fieldwor"ers then wrote up the answers to the !uestions byintegrating evidence from multiple data sources, writing up to several paragraphs in responseto each !uestion

:ur research design was based on multiple cases and multiple investigators, thereby allowingfor a replication logic (in, 1IBI) %hat is, we treated a series of cases li"e a series ofexperiments Each case served 19 to test theoretical insights gained from the examination of

previous cases, and to modify or refine them +uch a replication logic fosters the emergence oftestable theory that is free of researcher bias (Eisenhard, 1IBI), and it allows for a closecorrespondence between theory and data (laser and +trauss, 1I@A) +uch a grounding of theemerging theory in the data can provide a fresh, frame#brea"ing perspective on an alreadyresearched topic (eg,


24/25

-ata collection.

0e gathered detailed data on our sample companies mainly from publicly available sources38$: prospectuses (our ma2or source), annual reports, investment analysts& reports, andcompanies& web sites structured !uestionnaire was used to collect information about (a) thecompany (eg, founding date, si*e, lines of business, products and services provided, andsome financial data), (b) the nature and se!uence of transactions that the firm enables (eg,

!uestions included3 40hat is the company&s role in consummating each transactionF6 and 0hoare the other players involvedF6) (c) $otential sources of value creation (eg, !uestions 1Aincluded3 4


25/25

-ata anal&sis

8n inductive studies, data analysis is often hard to distinguish from data collection becausebuilding theory that is grounded in the data is a highly iterative process in which the emergent

frame is compared systematically with evidence from each case (Eisenhard, 1IBI) +omeresearchers argue for a deliberate process of 2oint data collection and analysis (eg, laser and+trauss, 1I@A) 0e employed this 2oint process by fre!uently moving between the data and theemerging theory as we developed our model %he value driver categories derived from ourpreliminary analysis of the initial data clearly influenced the design of the subse!uent!uestionnaire that we used for further data collection

meljun cortes strategic approach of e-commerce

Documents