Planning of E-commerce

Planning for Electronic Commerce

Objectives:-

1. Planning electronic commerce initiatives
2. Linking objectives to business strategies
3. Measuring cost objectives
4. Comparing benefits to cost
5. Strategies for developing electronic commerce Web sites

Planning Electronic Commerce Initiatives:-

1. Objectives of electronic commerce:
2. Increasing sales in existing markets
3. Opening new markets
4. Serving existing customers better
5. Identifying new vendors
6. Coordinating more efficiently with existing vendors
7. Recruiting employees more effectively

Linking Objectives to Business Strategies:

• Downstream strategies 

Used to improve the value that the business provides to its customers

• Upstream strategies 

Focus on reducing costs or generating value  

Work with suppliers or inbound shipping and freight service providers

Electronic commerce opportunities can inspire businesses to undertake activities such as:

• Building brands
• Enhancing existing marketing programs
• Selling products and services
• Selling advertising
• Developing a better understanding of customer needs

Measuring Benefits:-

Tangible benefits of electronic commerce initiatives include:

• Increased sales
• Reduced costs
• 3-Rs (reach, richness, range)

Intangible benefits of electronic commerce initiatives include:

• Increased customer satisfaction
• Improved customer service

Comparing Benefits to Costs :-

Key part of creating a business plan for electronic commerce initiatives includes:

• Identifying potential benefits
• Identifying costs required to generate benefits
• Evaluating whether benefits exceed costs

Return on Investment (ROI):-

Return on investment techniques provide a quantitative expression of a comfortable benefit-to-cost margin.

Built-in biases that can lead managers to make poor decisions:

• ROI requires that all costs and benefits be stated in dollars
• Focus is on benefits that can be predicted
• Tends to emphasize short-run benefits over long-run benefits

Strategies for Developing Electronic Commerce Web Sites:-

Typical early Web site

• Static brochure not updated frequently   
• Seldom had any capabilities for helping the company’s customers

Current SOA for Web sites include:

• Transaction-processing tools
• Automated homes for business processes of all kinds