Chapter 9

Chapter 11

Chapter 8
Chapter 9
Chapter 10

Jan
9th

by David Crane, Economics Editor, The Toronto Star Jan. 27, 2001

Mr. Crane is a senior editor and writer with many years experience as a journalist, particularly in business and economic matters on an international level.

Writing this article while attending the annual conference in Davos, Mr. Crane begins,
"If the first wave of the Internet was identified with the world of overnight billion-dollar dot-com companies, the second wave  would appear to be one in which major corporations with established brands, customer loyalty and real assets push aside the brash dot-coms. Indeed, many of the dot-coms have already disappeared. Others will fade away  as they run out of cash. As a panel of company executives indicated at a session of the World  Economic Forum here, the big names of the corporate world are now starting  to see that the Internet will become a significant tool in deepening relations  with existing customers and expanding customer bases.   So the major corporations, with their much deeper pockets, are moving in.

This shift has important implications for Canadian companies. They have to  figure out their Internet strategies soon, because they could be facing tough competition from much bigger multinationals."

Crane concludes by saying "The future of the Internet, however, appears to be to a large degree as a tool  for big players. This means Canadian companies will face a special challenge in developing their own competitive position, which is why doing so should be a  top priority"

There are a number of other good points in this article which you chould definitely read in its entirety

The Star maintains a list of previous articles by the main journalists
David Crane's list is at http://www.thestar.com/cgi-bin/gx.cgi/.......

Jan
9th
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Class
1

Jan
9th

"The business strategy questions confounding managers are how to transform the old company to the new company design and how to bridge the capability gap between the "needs of physical today" and the "needs of digital tomorrow"

Kalakota says the needs of physical today are related to cost-cutting back-office software that assists in process reengineering and streamlining operations

He suggests that the needs of the digital tomorrow are tied to revenue enhancing front-office software that helps spur profit growth by makingit easier for businesses to sell products via the Web, to get the most out of customer data, and to manage relationships with suppliers and consumers.

"e-Business strategy is about the uncertain future and therefore tends to be based on assumptions, premises and beliefs about customer priorities, technology evolution, competition, and the core competencies that will be needed to compete"

In Kalakota's book, chapter 11, (page 301) he proposes that there are two types of e-business strategy planning

• top-down analytic planning
• bottom-up "just do it" tactical planning

Jan
9th
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Class
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Jan
9th

Identifying Web Presence Goals
Creating and Maintaining Brands on the Web
Business Models for Selling on the Web

EDI Electronic Data Interchange
Supply Chain Management

Auction Basics
Web Auction Strategies
Virtual Community Strategies

---

Just because Schneider and Perry's book Electronic Commerce uses the word "Strategy" frequently in these particular chapters does not mean we will discuss all the content in this section of the course on Strategy.

We'll talk about Brands on the Web (re: Chpt 8) in Section F of this course: Section on Traffic and Brand Building
 http://ilearn....homepage/Tim.Richardson/online/outline802f.htm

We'll talk about Auctions on the Web (re: Chpt 10) in Section G of this course: Section on Pricing Issues
 http://ilearn....homepage/Tim.Richardson/online/outline802g.htm

Article about Alliances being more effective than mergers.

Sandra Mingail wrote an article which was based on the premise that before the e-commerce mania, many companies that lacked capabilities would simply look for opportunities to buy smaller companies that had those capabilities - however Sandra makes the point in her article that with the hectic pace of e-business, many companies are taking the option of developing alliances. While alliances can be tricky to develop, you are not taking such a big risk compared to when you lay out a lot of money to buy a smaller company. Another postive aspect of alliances is that they "... can be structured to reflect varying degress of commitment".

"One of the biggest benefits of alliances is speed". It is a lot quicker for some key executives to agree on developing an alliance for a limited situation than it is to go through all the "due diligence" and financing required to buy a company.

Sandra Mingail writing in the July 4th, 2000 Financial Post section of the National Post Online

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9th
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Class
1

Jan
9th
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Class
1

Jan
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Class
1

Jan
9th

Rob Spiegel wrote story in the Jan 26th E-Commerce Times titled
"Report: 70 Percent of Retailers Lack  E-Commerce Strategy"

Rob's story was based on a new study by Deloitte and Touche that shows that while roughly one third of retailers with a Web presence consider their online store to be  "strategic," a majority have set up  Web operations with no clearly articulated strategy and are merely "testing the waters  to gauge Internet demand." 
 http://www.ecommercetimes.com/news/articles2000/000126-1.shtml
 

Components of a good e-commerce strategy
First, understand how Strategy fits into the overall corporate planning framework

• Goal
• Objective(s)
• Plan(s)
• Strategy(ies)
• Tactics

Goals-- Goals are the ultimate thing you want to achieve. They are the statements that a company uses to motivate employees and statements used to judge and measure challenges that you face. Excellently worded goals should include measurable statements.
WTGR

Examples: 

• To be the largest on-line cosmetics retail site on the planet

.

Examples: 

• To have the largest on-line product offering of cosmetics

(theoretically if you have the largest product offering, you have the potential to make the largest sales, which helps fulfill the goal)
• To have the most competitive prices for cosmetics sold on-line
• To carry  the largest brand selection of cosmetics sold on-line

• generating leads, 
• increasing sales, 
• increasing store traffic, 
• reducing customer service costs or 
• improving brand awareness.

Strategies--Strategies are the collection of various tactics (organized and structured sequences of actions).

Examples: 

• Develop online giveaways to drive consumers to our product.
• By having on-line contests with prizes given away by other companies, you associate your brand with other circumstances, thereby increasing your brand depth
• Build links from the web sites of famous cosmetics brands and have reciprocal links.

Tactics--"Tactics are the specifics of strategies". These are the specific ways and options you do things in order to carry out various strategies. Depending on which tactics you are able to employ (based on your access to resources) some strategies will work, some will fail. "Tactics are the who, what, when and how of the broad-stroke strategy."

Examples: 

• Establish ongoing monthly contests giving away sample product to 10 lucky winners. 
• To enter, consumers must complete a data sheet, providing demographic information.
• Winners will be announced in the product category of the Web site to ensure consumers see our product line.

the full text was at
 www.nationalpost.com/financialpost/fpcomment/story.html?f=/stories/20001130/387805.html
"The story of the Chapters-Indigo flame out goes back to the 1980s when some of the other brand names in book retailing   -- Coles, W.H. Smith -- also destroyed millions of investor money. What all these corporate disasters have in common, however, is that they were nurtured by government policy and ultimately destroyed by government policy, supported by a nationalist corporate culture."
 

"Then, as now, there will be no chance of allowing foreign control. Borders and the other major U.S. book retailers, such as Barnes & Noble or Amazon .com, have already spent billions developing the business concepts, computer systems and management expertise of modern book retailing, but they will be blocked at the Canadian border. Why? So a handful of Canadian "entrepreneurs" can try to duplicate the model, free of the real competition that gave rise to the concept in the first place."

Jan
10th
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Class
2

Jan
10th

Jan
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Class
2

Jan
10th

BCE Inc.
buying
CTV Inc.

a telephone and internet provider buying a content producer
(a TV network)

www.pentonevents.com/canada
In Feb 2001, we will be at Booth 944
Exhibitor list  www.eventshome.com/Participant/ExhibitorList.asp?eventId=7043&event=1

exhibitor list for Feb 2000 was at  http://events.internet.com/canada2000/exhibits.html

Jan
10th
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Class
2

Jan
10th
 

..................

• mergers, 
• acquisitions, 
• alliances,
• takeovers, 
• joint-ventures 
• strategic alliances

http://www.buckinvestor.com/basics/mergers.shtml

Sometimes a good source of information about a business topic is from the web sites of people that sell products in that area. Buckinvestor.com is one company that sells investment services. As part of its web page, it includes a section that describes various terminology related to investing - including the terms used in mergers and acquisitions. They have also put together a helpful list of reasons why companies get involved in this type of activity. Please review the list.  http://www.buckinvestor.com/basics/mergers2.shtml

As a result of the many corporate "movements" in the Internet industry, it is not surprising that some consulting companies have been created which specialize in advising on mergers and acquisitions specifically in the internet community. webmergers.com notes   http://www.Webmergers.com/overview99.htm America Online's $160 billion merger with Time Warner on Jan. 10 is equal to three times total web M&A  spending for the past two years and twelve times the entire amount spent in the first quarter of 1999. AOL has itself been one of the most active acquirers in the past. Counting its recent acquisition of Mapquest.com, Inc., the company has spent nearly $7 billion buying more than 10 companies since the first of 1998. AOL purchases included Netscape, Inc., Moviephone, Inc. and chat software provider Mirabilis, Ltd. Yahoo!, Inc, now moves to second place in total spending, with more than $10 billion in acquisitions  to date."

Jan
10th
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Class
2

Jan
10th
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Class
2

Jan
10th

.
 

Jan
10th

check article on mergers

- one American company, Silicon Peak, is using Joint Venture relationships to obtain clients. They solicit wary clients by offering to hold stake in the client company - thereby ensuring the Client that they will try hard to provide a workable e-commerce solution. 
 http://www.siliconpeak.com/

- with so many mergers and acquisitions in the internet community, especially among ISPs, an American company now does, as its core business, consulting to merger partners. That is to say they advise clients who are merging as to the benefits and also do research on prospective partners for investors.
 New Commerce CommunicationsISP merger & acquisition services page

- relationships between financial institutions and search engines / ISPs also include this week's story of Yahoo announcing a deal with online bank Telebank. This deal will allow Telebank customers to  view their account information on Yahoo details. This is a good example of a Strategic Alliance. In the same article, note that Telebank has signed a merger agreement with online broker E*Trade .

Jan
10th

C-commerce
 
 
 
 
 
 
 
 
 
 

Collaborations

C-commerce
 
 
 
 
 
 
 
 
 
 
 

Collaborations

C-commerce

March 09, 2001 article by William M. Ulrich  "Collaboration counts in c-commerce"

"During the past two years, collaborative commerce, or "c-commerce," has become a major focus for many organizations. C-commerce optimizes supply and distribution channels to make an organization more competitive and more profitable. Deploying  c-commerce systems and related infrastructures helps companies collaborate up and down the supply chain. Collaboration for the common good must be the prime motivating factor in getting demonstrable value from a c-commerce initiative."

Ulrich says "C-commerce is the next evolutionary step beyond the simple process of selling goods  or services to customers over the Internet. It has emerged as a priority because the Internet has made high-speed widespread buying and selling possible — and necessary.  For example, if companies within your industry establish an electronic marketplace to attract buyers and if you don't participate, your market share could shrink. Similar risks  arise when companies refuse to collaborate in distribution, software development or  standards initiatives. With c-commerce becoming a necessity, executives should emphasize ways in which people and institutions can cooperate to reach common  goals."

In conclusion, Ulrich says "For c-commerce to truly succeed on a grand scale, companies may need to rethink  how they view their business partners, customers and competitors. Past reluctance to collaborate with competitors could stymie e-commerce efforts. In this new landscape, everyone is your partner. Formalizing these relationships takes time and commitment, but they will benefit entire industries beyond what any one company could accomplish. "

The full article was on ComputerWorld's site in March 2001
 http://www.ITworldcanada.com/cw/displayArticle.............. 

Ulrich is a management consultant and president of Tactical Strategy Group Inc.
Contact him via www.systemtransformation.com.

worth 15 %

1. Buyout / Acquisition

 
2. Merger

 
3. Strategic Alliance

• why the situation took place, 
• what business conditions brought this about
• competitive environment
• political / legal environment
• social / cultural environment
• technological environment
• what are the anticipated results of the buyout/merger/alliance

- from your point of view
• what effects might there be on the "e"-community
• is there anything that you learned from studying these situations which you could apply yourself in a future situation you might be involved in