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Strategy For Business

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Introduction

E-Market Strategy The article gives a valuable presentation on development of an e-business strategy. The most current key elements of e-business strategy formulation are mentioned and practical examples of e-companies with successful strategies are presented. It can be used as a practical guide for managers and entrepreneurs. Introduction Today most companies have online presence by means of a web site or online advertisement. Does it make them an e-company or a part of e-business? The answer is NO. E-business does not mean having a web site or being present on the Internet in any way, it means incorporating e-business strategy on a high level through all value chain of a company. Often many of such companies are called virtual companies (e.g. Google, Amazon, Ebay etc). However, after "dot.com" industries bubble collapse this term is avoided to some extent. Moreover, more traditional businesses have been shifting its focus to e-business such as banking, industrial manufacturers and health care and so on. The impact of e-business applications in public sector is still not clear and it is in its earliest stage, whereas commercial e-business applications have proved to bring in a competitive advantage. In this work, taking into account pervasive nature of today's business, I do not apply e-business or e-company exclusively to a virtual company as e-business strategy formulation ideas presented here may be used eventually by any company aiming to do business or a part of it electronically. As this work is concerned with terminology that is may be interpreted differently by different people I will look through key terms' definitions in context in first part of article. In the second part I will present a roadmap for e-business strategy formulation. The conclusion will attempt to sum up the approaches to strategy and views on strategic importance of ICT (Information Communication Technology) for e-business. Part 1 Theoretical concepts of e-business and strategy The term e-business is defined here as the use of electronic means to run company's business. ...read more.

Middle

?Give people idea and guidance about future targets Amazon vision aims to be "the earth's most customer centric company, where customers can find and discover everything they might want to buy online" Google's mission is nothing less than "Organize the world's information and make it universally accessible and useful." Establishing a vision/mission gives you a direction to take, encourage creativity and innovation as you go beyond existing boundaries of the firm. Quantifiable objectives Once vision or/and mission is established it makes sense to set parameters to measure the firm success. The parameters are the quantifiable objectives, which may include financial (profit, ROI, sale etc) and non-financial (customer's satisfaction) measures. The strategy implies a plan for achieving objectives with central goal to beat the competitors. Hence not only are quantifiable objectives vital for measurement of company's performance but for benchmarking against competitors. All objectives should be measured and quantified. Only then can they provide goals for the employees to strive for and consequently the clear targets for actions to take. Consider the example of B2B e-market place Covisint.com where the major American car makers stated to achieve 6 billion of savings per year trough online collaboration with car dealers using e-procurement and e-supply chain management. At this point an effective technique to formulate objectives and communicate them properly might be mapping a strategy, that is, to create a so-called strategy map. Figure 1 "A Strategy Map is a diagram that describes how an organization creates value by connecting strategic objectives in explicit cause-and-effect relationship with each other in the four Balanced Score Card objectives (financial, customer, processes, learning and growth). (Kaplan and Norton "The strategy-.focused organization) These four BSC perspectives are strategic themes in a firm. See the figure 1 above. Value creation Value creation is concerned with decisions about what value your business adds to customers or, in other words, why customers would want to buy your product/service. ...read more.

Conclusion

3. Strategy is position; that is, it reflects decisions to offer particular products or services in particular markets. 4. Strategy is perspective, that is, vision and direction. Finally, competitive advantage over rivals is the central point passing throughout all others components of strategy. E-business companies persistently review strategy if better trade-offs can appear in changing realty. Managing strategy is a value adding activity that enables companies to play with strategy components like with Rubik's cube for greater benefits of the companies. Strategy should constantly sustain a company competitive advantage and growth. In fact, American business mantra for success is growth. No growth no successful company. Strategy formulation roadmap is all about asking the right questions and giving the right answers. I presented the roadmap that contains six steps concerning decisions about: 1) vision; 2) quantifiable objectives; 3) a type of customer value; 4) target markets; 5) organization structure; 6) business model. Alternatively, you can come up with your own understanding or meaning of strategy and its formulation. As we all agreed the Internet has changed the way of doing business. Nowadays, the rise of Internet-based start-up companies, such as revolutionary Amazon.com and Ebay.com is still possible. Yet, it is unlikely as the technology matures and e-business applications become established and standardized. Over the last decade there has been a great debate over strategic importance of IT for an organization. The business people tend to overestimate the business savvy and underestimate IT. Their bottom line is strategic value is how an organization sets itself apart from its competitors, sells more products at a lower cost and thereby increases shareholder wealth but once every company has access to the same hardware, the same packaged software and the same network services, IT ceases to be a strategic differentiator. It is probably true; nevertheless it is hardly applied to Internet-related technology and e-business. Strategic importance of Internet applications for e-business opportunities has been proved by many successful e-brand started by IT people or software engineers (Google, Amazon, Ebay, Yahoo and many others). Being there first often gives a great competitive edge in e-business. ...read more.

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