E-Business Strategy

LEARNING OBJECTIVES(1):
• Outline the steps involved in strategy development.
• List the major drivers of e-business strategy and
their impact.
• Explain the importance of an e-business value chain.
• Describe the process of business model evaluation.
• Discuss how alliances and acquisitions relate to
strategy development.
• Identify the major strategies e-businesses are using
to differentiate themselves.
 LEARNING OBJECTIVES(2):
• List the advantages that a pioneering firm can gain.
• Explain the importance of brand names for e-
businesses.
• Describe the strategic role of portals.
• Identify the alternative competitive arenas where e-
businesses can find opportunities.
• Describe the measures that businesses can use to
judge e-business success.
 Vignette:
Microsoft vs. The World (1)
• Thinking Strategically
– Determine the environmental factors influencing
Microsoft.
– What are Microsoft’s strengths and weaknesses.
– Decide which of Microsoft’s strengths allow it to
gain an advantage over its competitors.
– List environmental threats that Microsoft faces
currently and could face in the future.
 Microsoft's Internet Strategic Actions:
Purchases/License/Alliances
• 1994 License Spyglass browser • 1996 AT&T, Netcom,
technology. MCI, CompuServe
• 1995 MS invests UUNet. alliances.
• 1995 AOL. • 1997 Invests in
• 1996 Purchase Vermeer Realnetworks.
Technology. • 1997 Purchases HotMail
• 1996 Purchase Colusa Software Inc. for $400 million.
• 1996 Purchases eShop, Inc. • 1997 Purchases WebTV for
• 1996 Purchases Electric Gravity, $425 million.
Inc. • 1999 Invests in Nextel.
• 1996 Sun Microsystems License. • 1999 Invests in AT&T.
 Vignette:
Microsoft vs. The World (3)
• Thinking Strategically
– What steps could Microsoft could take to lower those
threats.
– Speculate on the future opportunities that Microsoft
may have.
– List the different competitive arenas in which
Microsoft is competing.
– What steps Microsoft would need to take to take to
pursue those opportunities.
– Recommend a strategy that a company could use to
compete in the same markets as Microsoft.
 What Is Strategy
• A strategy consists of a pattern of decisions
that set the goals and objectives that lead to
long run competitive advantages for a firm.
– Undertake a SWOT analysis.
– Determining distinctive competencies.
Determining the competitive arena.
– Develop a plan to reach the business goals.
 Definitions:
• A value chain is a way of envisioning the
collection of activities that a business
undertakes to design, produce, market,
deliver, and support products or services.
• The Competitive Arena is the competitive
environment in which a business competes.
• Distinctive Competencies are unique areas
of advantage where a firm can differentiate
itself from competitors.
Steps for Strategy Development (1)
• Undertake a SWOT analysis.
– Evaluate the Strengths, Weaknesses,
Opportunities, and Threats facing a business.
• Determining distinctive competencies.
– Analyze a business’s value chain to help
identify internal strengths and weaknesses that
can help determine how a business can
compete.
Steps for Strategy Development (2)
• Determining the competitive arena.
– Determine the competitive environment in which a
business competes
• Helps set the mission
• Indicates the windows of opportunity to be pursued
• Identifies the competitive environment.
• Develop a plan to reach the business goals.
– Outline the strategic actions and tactics a business must
undertake to move from where and how it currently
competes to where and how it needs to compete given
its distinctive competencies.
Figure 11.1: Model of Strategy
Development
Value Chain
(Strengths & Strategy Window of
Weaknesses) Opportunity

Competitive
Strategic
Drivers

Threats
Environmental Forces
 Table 11.1: Drivers of
Environmental Turbulence
Environmental Description
Drivers
Technological Moore's law more power and lower costs is allowing technology to
change be applied across a broader spectrum of products and uses.
Changing Customers around the globe accepting Internet use and on-line
customers purchasing. Individuals are facing time compression and technology
is being used as an enabler to accomplish more. Customers have
increased power due.
Shorter Product life cycles are growing shorter due to the rapid development
product life of new technology, aggressive marketing, and a willingness of buyers
cycles to try new products.
Number of Distance between competitors is vanishing. causing an increase in the
competitors intensity of competition.
Need for speed Instant connectivity is becoming the norm in business-to-business
applications as well as in the way that consumers shop.
 E-Business Value Chain (1)
E-business value chains view information technology
as part of a business’ overall value chain adding to the
competitive advantages of a business

Distribution Value Marketing/ Customer Management

Inbound Production Sales Targeting & Leadership: Competitive
Logistics Differential E-commerce: Support Management Advantage
Extranets: Advantages Lower costs, Databases Intranets: Lower Through
Lowers costs Customization new market CRM costs, better Stronger
increase speed Dynamic Pricing entry. communication. Customer
E-business Innovativeness: Relationships
Promotion Speed, flexibility,
new product ideas

E-Business Communication Platforms

E-Business Technological Infrastructure
 E-Business Value Chain (2)
Distribution Value Marketing/Sales Customer Management
Inbound Production E-commerce: Targeting & Leadership: Management Competitive
Logistics Differential Lower costs, new Intranets: Lower costs, better Advantage
Support
Extranets: ERP, Advantages, market entry. communication. Through
Databases and
Lowers costs Customization, E-business Innovativeness: Speed, Stronger
CRM. Internet:
increase speed. Dynamic Pricing. Promotion. Customer
Lower costs, flexibility, new product ideas.
Relationships
speeds service.

Value Production Marketing/Sales

Marketing/Sales
Inbound
InboundLogistics
Logistics Value Production E-commerce:
Extranets: ERP
ERPSoftware E-commerce:Lower
Lower
Extranets:Lowers
Lowers Software costs,
costs,eases
easesnew
new
costs Differential
costsincrease
increase Differential market
marketentry.
entry.
speed Advantages,
Advantages,
speed Provides
Providese-business
e-business
Customization,
Customization,
Dynamic promotion.
promotion.
DynamicPricing.
Pricing.
 E-Business Value Chain (2)
Distribution Value Marketing/Sales Customer Management
Inbound Production E-commerce: Targeting & Leadership: Management Competitive
Logistics Differential Lower costs, new Intranets: Lower costs, better Advantage
Support
Extranets: ERP, Advantages, market entry. communication. Through
Databases and
Lowers costs Customization, E-business Innovativeness: Speed, Stronger
CRM. Internet:
increase speed. Dynamic Pricing. Promotion. Customer
Lower costs, flexibility, new product ideas.
Relationships
speeds service.

Customer
Customer Management:
Management:
Targeting
Targetingand
and IT
ITleadership:
leadership: Competitive
Competitive
Support
Support Encourages
Encourages Advantage
Advantage
Databases: Enable innovativeness, speed,
Databases: Enable innovativeness, speed, Through
Through
better
betterCRM.
CRM. flexibility,
flexibility,new
new Stronger
Stronger
Internet:
Internet: product
product Customer
Customer
Lower costs, speeds ideas.
Lower costs, speeds ideas. Relationships
Relationships
service.
service. Intranets: Lower costs,
Intranets: Lower costs,
improve
improve
communication.
communication.
 Figure 11.3: Coca-Cola
E-Business Value Chain(1)
Distribution Value Marketing/Sales Customer Management
Inbound Production E-commerce: Targeting & Leadership: Management Competitive
Logistics Differential Lower costs, new Intranets: Lower costs, better Advantage
Support
Extranets: ERP, Advantages, market entry. communication. Through
Databases and
Lowers costs Customization, E-business Innovativeness: Speed, Stronger
CRM. Internet:
increase speed. Dynamic Pricing. Promotion. Customer
Lower costs, flexibility, new product ideas.
Relationships
speeds service.

Inbound Value Marketing/Sales

Marketing/Sales
Inbound Value
Logistics Production E-commerce:
E-commerce:Cellular
Cellular
Logistics Production
ERP linked
linkedvending
Extranets:
Extranets:Links
Links ERPSoftware:
Software: vending
Links machines.
Coke
Cokewith
withbottling
bottling LinksCoke
Cokewith
withits
its machines.
bottling Databases:
Databases:Used
Usedwith
partners
partnersand
and bottlingpartners.
partners. with
Provides decision
decisionsupport
support
suppliers.
suppliers. Provides
interconnected systems.
systems.Can
Candetermine
determine
interconnected
management the
theeffectiveness
effectivenessofof
management
system. marketing
marketingefforts.
efforts.
system.
 Figure 11.3: Coca-Cola
E-Business Value Chain(2)
Distribution Value Marketing/Sales Customer Management
Inbound Production E-commerce: Targeting & Leadership: Management Competitive
Logistics Differential Lower costs, new Intranets: Lower costs, better Advantage
Support
Extranets: ERP, Advantages, market entry. communication. Through
Databases and
Lowers costs Customization, E-business Innovativeness: Speed, Stronger
CRM. Internet:
increase speed. Dynamic Pricing. Promotion. Customer
Lower costs, flexibility, new product ideas.
Relationships
speeds service.

Customer
Customer Management
Management
Support
Support Leadership:
Leadership: Competitive
Competitive
Internet:
Internet: Intranets: Management willing
Intranets: Management willing to to
Provide
Advantage
Advantage
Providemore
more change and sell ideas.
change and sell ideas.
timely
timelydelivery Intranets: Through
Through
delivery Intranets:Worldwide
Worldwidesystems
systems
tototrade
trade improves
improvescommunication.
communication. Stronger
Stronger
customers.
customers. Innovativeness:
Innovativeness:NewNewapproach
approachinin Customer
Customer
the
thesoft-drink industry..
soft-drinkindustry Relationships
Relationships
 Business Models
• A business model, or commerce model, is
the basic process flow indicating how a
business operates.
• Business process modeling is a systematic
approach to viewing organizations and the
complex relationships that are required to
make the business operate.
 Analyzing Business Models
• Four perspectives:
– Functional perspectives: identifies the functions
within a business an how they interact.
– Behavioral perspective: identifies when and how
functions are performed in a business.
– Organizational perspectives: identifies where and
by whom functions are undertaken.
– Informational perspectives: identifies what types of
information are identified and how do they flow.
 Figure 11.4: Generic Business
Model
Suppliers
Supplierscalled
called Inventory
Inventory Products
Products
or
orinvoices
invoices Warehoused/
Warehoused/ delivered
deliveredtoto
mailed.
mailed. Stored
Stored retailer.
retailer.

Traditional
Traditional
Company
Company media
mediaused
usedfor
for Customer
Customersees
seesads
ads
manufactures
manufacturesfor
for advertising.
advertising. and
andgoes
goestotoretailer
retailer
inventory
inventoryschedules.
schedules. Sales
Salesforce
forcesells
sells totomake
makepurchase.
purchase.
product.
product.

Payments
Paymentsarearemade
madeatat
retail
retail––funds
fundsused
usedtoto
pay
paysuppliers.
suppliers.
Information
InformationFlows
Flows
 Figure 11.5: Generic E-Business
Model
Suppliers
Supplierslinked
linked Product
Productdelivered
delivered
through
throughExtranet
Extranet through
throughindependent
independent
deliver
deliverjust-in-time.
just-in-time. shippers
shipperssuch
suchasasUPS.
UPS.

Manufacturer Customer
Manufacturer Web
Webpage
page Customergathers
gathers
customizes
customizesproduct information
product provides
provides informationand
and
and
andsells
sellsatatlower purchases
lower information
informationand
and purchasesthrough
through
price. Web
price. ordering.
ordering. Webpage.
page.

Payments
Paymentsarearemade
made
by
byonline
onlinethrough
through
Web
Webpage.
page.
 Developing E-Business Models
• Requires a process of identifying the functional process
flows of a business and then modeling how the
application of e-business procedures can result in
competitive advantage.
• This requires a six-step process:
1. Identify the functional areas and major player.
2. Indicate how these area are linked and the directions of the flow
process.
3. Determine what e-business tools and techniques can be applied to
the business model.
4. Develop a new e-business model flow.
5. Evaluate the competitive advantages of the model by using a
value chain analysis.
6. Determine the likelihood of acceptance of the new model.
Figure 11.6: The Traditional
Higher Education Model

Time
Timeand
andPlace
Place
Dependent)
Dependent)
Content
Content Lecture
Lecture
Deliverer:
Deliverer: Discussion Student
Student
Discussion
Professor
Professor
Testing/
Testing/
Evaluation
Evaluation
Figure 11.7: The E-Learning
Higher Education Model
Time
Timeand
andPlace
Place
Independent)
Independent)
Learning
Learning
Environment
Environment Student
StudentAA
Content
Content
Deliverer:
Deliverer: Discussion
Discussion
Professor
Professor Groups
Groups
Testing/ Student
StudentNN
Testing/
Evaluation
Evaluation
(behavior
(behavior
capturing)
capturing)
 Figure 11.8: Pre 1998 Computers
Sales Functional Business Model
Inventory levels ordered Product delivered through shippers to
based on sales retail outlet.
projections. Product sits in retail outlet waiting
Increased inventory to be sold and losing value.
costs as inventory
waits in storage.
Customer has
immediate
Manufacturer Personal sales backed by possession of
produces national and local product, and can
product to fit advertising possibly return
retail orders. Increases sales costs. product and
receive support.

Payments are made through

cash, check, credit card or
invoice.
 Dell’s Business Model
Suppliers linked Product delivered through
through Extranet independent shippers such as UPS.
deliver just-in-time. Contract low shipping rates, no
Lowers inventory fixed costs in assets.
costs.
Customer gathers
information and
Web page provides
Dell purchases through
information and
manufactures ordering.
Web page.
customized PC Lowers ordering costs. Lowers
and sells at low communication
price. costs.

Payments are made online

through Web page credit card or
invoice.
Lowers bad debt expense and
credit risks.
 E-BUSINESS STRATEGY
• Low cost and therefore low price
competitor.
– A "frictionless" Internet market implies that
customers have almost perfect information and
can compare prices around the world (by using
intelligence agents to search out the best prices
enhances this process).
• Differentiation strategy by finding a
unique market position against competitors.
 Table 11.2: Methods of Differentiation
Differentiation Advantages Disadvantages
Strategy
Gain Speed & This provides a Firms need to be
First Mover number of first mover flexible to be fast.
Advantages advantages including Being first increases
costs, meeting needs, risks and may require
lowering risk, and large amounts of capital
lower prices. to maintain advantages.
Build Brand Gives buyers Requires a large
Name assurance when amount of capital to
interacting with a site. obtain and maintain a
Allows for easy name brand name.
recognition.
 Table 11.2: Methods of Differentiation
Differentiation Advantages Disadvantages
Strategy
Portal Allows for economies of Requires large amount of
Development scale and builds barriers to capital, pushing off
entry. profitability.
Pursue Niche Very good strategy for Having only one niche can
Strategies smaller or weaker be risky because all of the
businesses. Allows a "eggs" could be in one
business to focus and basket or with one
become an expert in one customer.
competitive arena.
Enhanced Allows businesses to build Could result in a loss of
Customer barrier to entry. By staying power by the business
Relationships close to customers business supplying the product or
can meet needs better. service.
 Speed and First Mover Advantages
• A pioneering firm has differentiated itself
from competition because it is the first to
enter a competitive arena or it is able help
define the competitive arena.
– Advantages:
• Lower Costs
• Meeting Current Needs
• Lower Consumer Risk Perception
• Charge Higher Prices
 Costs Advantages
• May increase the business’ or product's time in a
life cycle, spreading development costs over time
and the number of products produced. Firms that
follow have less time in the life cycle to recover
all costs
• An early entry firm can gain cost advantages
through experience curves and when greater
market shares are obtained they obtain greater
economies of scale.
 Meeting Current Needs
• The faster a business can respond to the market,
the more likely that information from areas such
as marketing research will be valid resulting in
actions that could lead to higher market share.
• First, movers have been shown to have a
substantially higher market share than later
entrants. A product that is six months late to
market may miss out on one third of the potential
profit over the product's lifetime.
 Consumer Risk Perceptions
• First mover may become the comparison standard for all
rival products by setting the standard for performance.
• Consumers may lower the risk involved in purchasing by
choosing a product with an established image or brand.
• Innovators and early adopters may try first mover products
first and influence others through the diffusion process.
• Advertising and publicity aids in consumer search, but given
the lack of alternative products in many innovative markets,
advertising may have the effect of setting relevant product
attributes the consumer uses in the evaluation process.
 Comparison Standard
and Switching Cost
• A comparison standard is what the customer
uses to judge a product.
– For example, if a customer had first gained their online
search experience with Yahoo!, they will evaluate all
other search engines against Yahoo.
• A switching cost is the additional "costs"
involved in learning something new.
– The costs involved in adopting a new software package
would include the software expense, support, training
costs, and slowed productivity costs.
 Prices
• Higher introductory prices can be charged for innovative
buyers who is often more risk tolerant and may have
higher disposable income.
• With greater amounts of information available to the
later adopting consumer, backed by possible word of
mouth about benefits, a higher price can be maintained.
• Later entering firms are seen as higher risk because of
lack of information on their products, forcing them to
charge lower prices. Remaining customers may be those
who are more risk adverse driving the later entrants price
even lower.
 First and Second Movers
• Being the first entrant into a market does not
guarantee a long term competitive advantage.
A firm must have:
– Expertise, resources, and creativity necessary to
exploit first mover opportunities.
• Pioneers must find ways to forestall or neutralize
the efforts of later entrants or they will not gain
first mover advantages.
 Building Barriers
• Entry Into an Industry Can Be Limited by:
– Gaining Economies of Scale
– Cost Advantages
– Developing High Switching Cost
– Brand Names
– Strong Customer Relationships
• Development of Portals
 Brand Names
• A brand is a sign, symbol, design, term, name or
combination that allows for easy recognition of a
product or company.
– Brand names often give assurance to the
purchaser because they believe that the risk of
using a brand name is lower.
• Build online brand names by:
– Online and offline advertising
– Ease of navigation and overall experience that a
user has with the Web Site.
 Portals
• A portal is an entranceway onto the Internet.
• They are often the preferred starting point for:
– Searches
– Entertainment
– Information,
– Email,
– Or any other Internet based product.
Case: AOL: Nobody’s Laughing Now
• Thinking Strategically
– Speculate on the reasons for AOL’s portal success.
– Why was AOL able to grow to dominate Internet
access.
– List some advantages that AOL’s size gives it in the
competitive portal arena.
– Compare and contrast AOL (www.aol.com) with other
portal sites such as Yahoo! (www.yahoo.com) , the GO
Network (www.go.com), or Excite (www.excite.com).
– Determine how differentiated these sites are from each
other.
– Justify AOL’s use of strategic alliances to maintain its
advantages.
Figure 11.9: Top Domains
18%

AOL
5%
MSN
4% United Online
3%
Earthlink
70% All Others
 Niche Portals
• Niche portals target specific markets
– The number one sport site targeted toward males 111-
34 is ESPN (www.espn.com).
– IVillage is a site targeted toward women (
www.ivillage.com).
– E*Trade (www.etrade.com) targets individuals
interested in receiving financial information.
– Snap (www.snap.com) offers "rich-media”.
• International portals target international
markets
 Business Portals
• Commerce portals: target business professionals by offering forums
related to products, product information, buying opportunities, order
tracking, and other services.
• Vertical portals: serve narrow niches within specific narrow
industries. These can provide users a one-stop site for all information
and purchase needs, allowing businesses to access industry or trade
information and to buy and sell online. This could include industry
articles, job listings, e-commerce, and a variety of e-business
communication systems.
• Customer portals: provide company specific information for
customers such as product information, inventory and order tracking,
help desk applications, and other services.
• Corporate portals: often are the intranet applications. This provides
information needed by employees such as internal newsletters, human
resource information, industry information, and other applications.
 International Portals
• International portals target national or
ethnic markets
– Yahoo have services for European, Asian, and
other country specific markets.
– StarMedia (www.starmedia.com) is a portal
site specifically designed to serve the Spanish
speaking markets of Central and South
America as well as in the United States.
 Vertical Portals
• Vertical Portals are designed to serve narrow niches
within specific industries.
– Allow business users a one-stop site for all
information and purchase needs, allowing businesses
access to industry or trade information and to buy and
sell online.
• VerticalNet (www.verticalnet.com) hosts vertical
sites for technology, communications, food
service, healthcare, and other firms.
• Asay Publishing (www.asaypub.com) serves the
used office equipment after-market.
 Table 11.3: SME E-Business Strategy Guide
Small and Meduim Sized Enterprise Strategies*i
Strategy % of Advantages
Respondents
Customer Over 80% Online systems allow channel members and consumers
service to gain access to product and inventory information.
Electronic Over 60% This allows SMEs access to larger markets without the
commerce cost of setting up new distribution systems and target
narrow markets faster. Lower overhead costs can be
carried over to lower prices to customers.
Customer- Over 50% Online connections between the SME and its customers
relationship increase the speed of response and allow for close to
management instant communication. Linked Extranets allow SMEs to
applications act as virtual partners with other businesses.
B-to-B Over 40% SMEs can act as a virtual marketing intermediary linking
connections larger businesses with very small suppliers. Online
(extranets) access to inventory and supplies helps control costs.
i
Natalie Engler, “Small But Nimble,” Information Week, January 18, 1999, pp. 57-62.
 Table 11.4: E-Business Strategy Matrix
Low Differentiation High Differentiation
Characterized by: High brand Characterized by: High brand
name recognition. Large portals name recognition with niche
and general e-commerce sites markets.
High Resource

Keys to success: Heavy brand Keys to success: Develop vertical

name advertising. portals. Serve niche community.
Examples: Yahoo, Examples: iVillage, VerticalNet,
Amazon.com, Disney, Wal- ESPN.com.
Mart, Schwab.com.
Characterized by: Low brand Characterized by: Low brand
name recognition. name recognition outside of niche
Keys to success: First mover market.
Low Resource

advantages. Enhance customer Keys to success: First mover

relationships. advantages. Serve niche markets.
Examples: adagio.com, Enhance customer relationships.
wine.com, SMEs with Web site Examples: Asay Publishing,
support.
 Alliances & Acquisitions
• The creation of an e-business value chain
may come from forming alliances or
through the acquisition.
– Alliances are formal or informal relationships
between independent companies that work
together for a common purpose.
– An acquisition exists when one corporation
purchases all or a controlling part of another
company.
 EVALUATION OF STRATEGY
• The Internet stock market at the turn of the millennium
was based on a bubble economy.
– Investors bid the price of Internet stocks to extremely high levels,
only to see those investments come crashing back to earth.
– While many traditional companies have valuations set at 7 to 20
times their earnings, in 1998 eBay had a valuation of 773 times its
expected 1999 earnings.
• Historical NSITES: Bubble Economies
– The tulip craze of the seventeenth century was an investment
bubble. A bubble occurs when the price of a commodity or
product is bid beyond any rational level. Growers, dealers, and
speculators traded tulip options, causing prices to skyrocket.
In 1636, the bubble burst and almost brought the Dutch
economy down.
 Case 11.2: The Sound of One
Bubble Popping
• Thinking Strategically
• Speculate on the reasons that Excite@home would
pay such a high price for BlueMountain.com.
• Determine why the price could be so low for
AmericanGreeting.com.
• Evaluate the strategy used by online greeting card
companies.
• Determine if these business models have a long-
term viability and how a company can make a
profit offering this service.
 Figure 11.x: Greeting Card Traffic, Valentine’s
Week Traffic (2002 – 21 Million Users)

YahooGreetings
35%
AmericanGreeting.
com Sites
45%

Hallmark.com
20%
 ROI (1)
• IT cost benefit analysis will look for
benefits in:
– Operational efficiencies: includes lowering
costs across a number of functional areas.
– Productivity gains: Measures increased
productivity in areas such as time-on-task, error
rates, training costs, etc.
– Revenue: uses sales and revenue figures.
– Customer satisfaction: this is a softer measure
that can be quantified by increases in repeat
purchase rates, influence on another’s
purchases, or other lifetime value measures.
 ROI (2)
• Return on investment measures typically used
to assess e-business investments including:
– ROI: measures looks at net revenue over costs.
– Payback analysis: determines the length of time
it will take to recover the cost of the project.
– Net present value analysis: determines the
current value of a stream of future returns against
current investment.
– Economic value added: considers the operating
profit minus the capital and debt used to generate
the profit
 ECONOMIC WELFARE
• Is society better off with an interconnected
world?
• Perhaps the greatest social benefit is the
Internet’s ability to shift power to the
individual through access to information
and the individual’s ability to use the
Internet as a free speech venue.
– The Internet has opened the world to many
around the world.
 Exercise 11.1: Evaluating An
E-Business Value Chain
• Develop a value chain model for an
industry or business.
– Identify the key e-business technologies needed
to compete in the chosen industry.
– Identify which of the value chain components
would give a business in that industry a
distinctive advantage.
– Determine if it is possible to hold that
advantage over time.
Exercise 11.2: SWOT Box exercise
• Use the following matrix to undertake a SWOT
analysis by identifying the strengths, weaknesses,
opportunities and threats faced by a business or
industry.
Strengths: Opportunities:
Weaknesses: Threats:
• Given this SWOT analysis, propose an e-business
strategy that could be pursued to reach the
opportunity and limit future threats.
 Exercise 11.3: Evaluating
Differential Advantages
• Use the table below to indicate the types of services
offered by portal sites.
• Determine what allows each to differentiate
themselves from others.
• If you can not find any differences, determine what
that means for the long-term survival for some of
these portal sites.
Shopping
Personal-

Weather
Finance
Search

Games

ization
Sports

Major

Home

Other
Email

Pages
News

Chat
Free

Free
Portal
Sites
 Exercise 11.4: Strategy Analysis Matrix
• Identify strategic positions of a number of e-
businesses. (Try to find at least one business for each
cell in the matrix.)
• Identify the strategies these businesses are pursuing
and the keys to their long-term success.
Table 8.5: E-Business Strategy Analysis Matrix
High Characterized by: Characterized by:
Resource Keys to success: Keys to success:
Low Characterized by: Characterized by:
Resource Keys to success: Keys to success:
Low differentiation High differentiation
 Competitive Exercise 11.5:
Evaluating an E-Business Model
• Choose and industry. Develop a business
model for how that industry currently
operates and then develop an e-business
based model.
• Compare your model against those of other
individuals or groups.
• Identify how this new model can gain a
competitive advantage over other models in
the industry.