What are the key characteristics of an e-business strategy model?
Answer. A strategic business model gives a framework which presents a logic sequence of all the key activities for developing an e-business strategy. There are some standard strategic business models developed for e-business like Enders model (2008), Johnson & Scholes (2006) , McDonalds (1999) , and Smith (1999) (Chaffey, 265). These models have their applicability varying from one e-business to another depending upon the nature of business and product offered. Still, the key characteristics of an e-business strategy model are:
Situational analysis- This includes the assessment of internal and external environment for the business. The internal environment stands for resources, work culture, business model strengths and weaknesses, etc. Similarly, the external model involves business environment factors like political, social, economical, legal and environmental factors.
Clearly defined corporate goal setting via Strategic vision, mission and strategic objectives- The elements of vision and mission are very important for elucidating the strategic roadmap to the employees and the market. Objectives are extremely important as their attainment measures the success of strategic goal setting.
Strategy development- This process is a mix of strategic options generation, individual strategic option evaluation, and selection of optimum strategy (Chaffey, 266).
Strategy implementation and control – This involves applying the chosen strategy and adopting effective monitoring and reviewing process to ensure profitable implementation.
2. Select a retailer or manufacturer of your choice and describe what the main elements of its situation analysis should comprise.
Answer. The chosen retailer for applying situational analysis is Amazon.com. The situational analysis involves external environment analysis (PESTEL), internal environment analysis (SWOT), and resource-portfolio analysis and demand–competitor analysis (Chaffey, 267).
PESTEL- Amazon.com
The political environment for Amazon’s business model comprise of various aspects like government aids on better and cheaper access to internet , along with rising number of online shoopers across the world and government acceptance for e-retailing within their economies. The economic environment owes to rise in number of internet users and developing nations opting more of e-transactions enabled services (Hasan, Sistani and Raju, 104). The legal aspects are related to rapid expansion in foreign markets and acquisitions in abroad markets. Social factors are those of increased buyer inclination towards high quality consumer goods. No specific environmental factors for e-business model in case of Amazon. Technology is ever-changing and key enabler for the e-commerce based business (Hasan, Sistani and Raju, 105).
Resource-Portfolio analysis
The resources for Amazon’s business model are standard manufacturers and private label manufacturers who look towards a business expansion via commission based online sales. These resources form the fundamental supplier network which complies with online product retailing polices from Amazon. Amazon’s current portfolio comprises of high quality products from leading manufacturers in almost all general segments and a specific range of inhouse brands.
Demand-Competitor analysis
The demand for Amazon’s products is spanned across a variety of general goods, books, and electronics and consumer goods categories with all the major customer segments. The strategic tie-up with suppliers ensures the demand and supply ratio for offered products is matched as per varying market demands (Nicoleta and Maha, 256). The main competition to Amazon’s business is from brick & mortar retailers (Supermarkets), other e-retailers (e-bay), and indirect marketing companies.
3. For the same retailer or manufacturer suggest different methods and metrics for defining e-business objectives.
Answer. For Amazon the core business objectives are defined within the purview of their vision statement, which is “to be earth’s more customer centric company where buyers can find and discover anything they want to buy” (Chaffey,283). The objectives for Amazon are entirely SMART in their contribution to the overall goal setting. The main strategic objectives are:
Garnering revenues from newer market and untapped geographical locations
Increasing revenues from small scale deals from local retailers
Customer retention oriented services regarding cost and deliveries.
Quicker new product development and wider range of product offering for any category.
The metrics which define the above stated objectives are as follows:
Revenue maximization- the online business should maximize its revenues to ensure higher profitability and consequent lower costs of expansion.
Increasing the source of revenue- accessing newer markets and wider customer base with enhanced customer retention can lead to increase in revenues.
Acquisition of newer markets and product segments- the business intends for global presence as leading retailer and for this Amazon has to be present across newer markets and should offer wider range of product segments to enhance customer buying experience.
New product development- The urge for matching up to competition’s offering is only possible if Amazon keeps including innovation in products offered and ensure a recurrent new product line for customers as done earlier by offering Kindle with I-pad (Rao, 1).
4. For the same retailer or manufacturer assess different strategic options to adopt for e-business.
Answer. The strategic options are possible strategic options and e-business service alternatives which can be evaluated and implemented situationally (Chaffey, 302). For Amazon, the different strategic options possible can be as follows:
Reforming current payment and transaction systems- The ease of payment access will not only give a competitive edge but also ensure faster revenue recognition for e-sales.
Strategic restructuring of current product portfolios- The regional buying preferences can be easily satisfied by systematically restructuring the offered product segments.
Changing the positioning strategy- Amazon’s positioning in developing markets can be changed to include the wider range of high quality products offered at lowest cost and supported by a highly effective distribution system which ensures maximum customer satisfaction and retention.
Market development strategy- Strategic alliance with local suppliers, retailers and logistical service providers can lead to cutting edge in terms of customer satisfaction.
Works Cited
Chaffey, Dave. " e-Business and e-commerce management". Strategy, Implementation and Practice.Ed. Fourth edition: Prentice Hall group, 2009. 256-320. Print.
Hasan, Sistani and Raju. "Top Online Shopping E-companies and their Strength and Weakness ".2014. Jan 15. 2016.
Nicoleta, Andreea and Maha, Andreea . "E-commerce United States of America: Amazon.com ".2012. Jan 15. 2016.
Rao, Venkatesh. "Why Amazon Is The Best Strategic Player In Tech".2011. Jan 15. 2016.
