It is clear from the discussions above that there is no one generic strategy for e-commerce success. In considering strategy, managers must consider how an organization's objectives, product-market focus and execution capabilities relate to one another. Organizations that attempt to add on an e-commerce facet to their traditional business structure without re-engineering their traditional processes are not likely to succeed in their online ventures. Moreover, since information technologies tend to be pervasive and are evolving continually, an integrated approach is called for.

The increasing diversity of strategic models that are developing as e-commerce evolves suggests that organizations should adopt a stance that includes vision, fluidity, dynamism, experimentation and, most importantly, strategic alignment. Organizations should focus on testing a range of ideas and attempting to ascertain which ones will suit the new market conditions. From there, they can transfer their vision and processes as appropriate to the developing strategic model. It is imperative however, that organizations recognize that such strategic developments do not occur in isolation. They are fundamental to the strategic vision of the organization as a whole and can establish the key dimensions for transforming the organization into a successful e-commerce venture.

There are some important strategic principles that can be useful while exploring and assessing e-commerce strategies. Steinfield (2002) has suggested some working hypotheses for research. These, we feel, could well be accepted by practitioners as operating principles while devising and deploying e-commerce strategies. They are:

  • The tighter the integration between a firm's e-commerce and physical channels, the more the firm will benefit from its e-commerce investment (This principle underscores the importance of understanding that investing in IT does not directly add value to e-commerce. E-commerce value is generated as a result of complementary investments in both technology and process development as shown in Figure 2. Pay specific attention to the "create" and "defines" relationships).

  • The more capable a firm's existing IT infrastructure, the more likely it will experience benefits from integration with its e-commerce channels (the "enables" relationship in Figure 2).

  • The more a click and mortar firm targets existing customers with its e-commerce channel, the greater the effect of e-commerce on customer retention (Here we note that existing business processes and relationships drive the e-commerce strategy. This is captured in the "influences" relationship in Figure 2.)

  • The more that traditional firm employees stand to gain from e-commerce generated activity, the less the likelihood of channel conflicts, and the greater the likelihood that a firm will benefit from its e-commerce investments (this has to do with the interorganizational processes and the value those processes create for the organization as shown in Figure 2).

In conclusion, we can say that brick-and-mortar organizations have to do something ("do nothing" is not an option since a "wait and watch" strategy is equivalent to a do nothing one) with respect to an e-commerce strategy. If an organization is not sure, it should not overcommit to e-commerce. In that case, the generic strategy should be driven by a policy that helps get the house in order first and then use the Internet set of technologies to enable that/drive that (following the Cisco exemplar). The generic strategy then could be to start piecewise development of the e-commerce framework (under the larger integrated framework)—deciding whether to concentrate on the customer side first of the supplier side—or both.

Organizations will have to hedge most of their strategic bets in the emerging e-commerce scenario (examples being Proctor and Gamble and Hayes-Lemmerz—chapter case 4). However, in order to come up with a reduced and manageable portfolio of strategic options, organizations will need to pay special attention to governance structures across organizations. In other words, they need to negotiate positions on relative power with respect to the value web early on—not just to secure a particular position but also to know their positions so that they align specific strategies and develop the requisite processes.

A large part of such negotiations have to include the framework for developing trust. Keep in mind, e-commerce tends to strengthen existing partnerships. Therefore, social capital can be leveraged using e-commerce. In general, while it is difficult to create trust anew, it is easier to reinforce it.

Intelligent Enterprises of the 21st Century
Intelligent Enterprises of the 21st Century
ISBN: 1591401607
EAN: 2147483647
Year: 2003
Pages: 195 © 2008-2017.
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