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Academic Approach to E-Business

Please answer the following:
1. Based on your understanding of the importance of the internet, do you think that McDonalds should use the Internet in its selling process? Should Ford Motors? Disney? - And why? Can you provide some related examples?

2. What makes an online business a successful e-business? There are many factors. Mention four factors and explain why they are important - support your answer with examples.

3. What's "Operational Excellence"? Explain in your own words its meaning and relate the term/practice to the e-business environment or company.

4. What are some of the security challenges of the Internet? Mention two challenges, with your opinion of how a company can control each challenge so it can insure itself against each one.

5. Having an e-business is a big goal. There are usually three strategic objectives to accomplish an e-business: process improvements, strategic improvements, and business transformation. Expand in each of these three objectives and explain why it's important. You may want to provide examples to support your answer.

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1. After five decades of technology investments, the journey toward digitization of business processes is still in its infancy. Process digitization is a multi-year marathon that will require tremendous endurance. Some companies have this endurance; most don't. The most challenging questions confronting business leaders and managers are not "What processes do we digitize?" or "How do we digitize?" but "What is our focal point (strategic objectives) that ties together our ongoing process digitization efforts?" (http://www.lawyermarketing.com/CM/Marketing/Marketing75.asp)

To understand the magnitude of incorporating an e-commerce component to your existing business, Kalakota and Robinson (2003) tell managers to ask themselves the following questions: How many processes do you have? What percentage have you digitized? Most managers are taken aback by these questions. These authors tell us to take a moment and count all the critical business processes associated with ordering, fulfillment, payment, billing, employee benefits, sales, marketing, and customer service. In your opinion, Kalakota and Robinson (2003) ask, ?What percentage of these processes is completely and effectively digitized? Is it 10 percent, 30 percent, 50 percent, or more?? Their research indicates that the average is between 20 and 30 percent?higher for Global 2000 companies, lower for small- and medium-sized businesses (SMBs). (http://www.awprofessional.com/articles/article.asp?p=99978&seqNum=3&rl=1)

Thus, companies, such as McDonald?s, Ford Motors, Disney and other companies need to ask themselves such questions as pointed out by Kalakota and Robinson (2003) above: How many processes do you have? What percentage have you digitized? Will it work for selling their product?

McDonald?s and Ford, for example, have been fairly successful in branding, which is important to online success as well. When branding is successful, it is so pervasive that it takes on a life of its own. Brands are intensely powerful. Coca Cola has a 70% market share, yet the company is selling only sugar, water and food coloring. According to Levick, Burger King food scores better in taste tests than McDonald's food, yet McDonald's is the market leader with its dominant brand. Why? Because McDonald's is selling an experience, a relationship. And, therefore, the Internet is indeed a powerful marketing tool to make its presence to the world. It can be used in marketing, advertising and promoting this ?McDonald? relationship with its customers; however, it is somewhat questionable in terms of selling its product via e-commerce.(http://www.lawyermarketing.com/CM/Marketing/Marketing75.asp) However, Ford and Disney are already on-line to some degree.

In a BizRate Online Research Value Panel in September 2003, for example, results showed 62 percent of online buyers were women. Online shoppers are a much different "demographic" than they were in the period from 1997 to 2001, and if a vendor ignores the growing numbers of women online, it will not be very credible, let alone convincing, in its marketing. For example, Ford's Christine Hollander says that "86 percent of all vehicle purchases are influenced by women," which has been one of several factors driving the choice of content and features on Ford's Web site. Hollander explained that "women do a lot of research online, and among their friends and associates" before making a purchase decision. Meanwhile, Anil Chopra, general manager of one of the leading Ford dealerships in Toronto, told ECT that "women walk on to the lot holding our Web site pages in their hands." Having customers who are preinformed of many of the vehicle's features makes some parts of the salesperson's job much easier, Chopra said. In terms of addressing gender issues on a corporate site, there are many examples from across the spectrum of vendors. Ford.ca profiles its support for the Canadian Breast Cancer Foundation with the Pink Ribbon campaign featured on the main site during October of each year. Hollander said the partnership with the CBCF has proved fruitful in many ways and has allowed Ford to show it is involved in the cause to a significant degree. (http://www.technewsworld.com/story/business_news/34966.html)
See other examples at http://www.technewsworld.com/story/business_news/34966.html.

Consider the following examples:
- Easy To Do Business With?Why did Staples, the office products superstore, succeed in executing its Easy To Do Business With strategy while others faltered? Did Staples' ability to create a technology-based service blueprint effectively allow the company to implement an integrated multi-channel strategy linking office supply stores, e-commerce, catalog operations, and contract stationery businesses?
- Low Cost?Why did Dell succeed in executing its build-to-order, customer self-service strategy while Compaq, AST, Packard Bell, Micron PC, and Gateway faltered? Did Dell's ability to improve continually an operational blueprint allow the company to digitize its low-cost supply chain and undercut prices?
- Zero-Defect Quality?Why did Toyota succeed in extending it?s market share in a down economy? How is it able to align changing customer priorities with its production process? Did Toyota's ability to digitize the design process allow it to take a new car from design to production in less than a year (compared with as many as three years for its competitors)? (http://www.awprofessional.com/articles/article.asp?p=99978&seqNum=3&rl=1)

In fact, Kalakota and Robinson (2003) argue that there is a common ingredient shared by each example that is critical for success. That is the ability to focus digitization initiative. Everything that Staples does?customer-facing, employee-facing, supplier-facing?needs to support its Easy To Do Business With focal point. Unfortunately, very few companies have such clear direction in their digitization efforts. Having a distinct focal point differentiates market leaders. These companies consistently execute a focused business strategy using technology as an enabler. These businesses stand out not only because of their superior talent for seeing the big picture and for sensing shifting customer priorities, but because they implement technology day in and day out to create customer value. Why can't competitors copy market leaders? The answer is remarkably simple. Competitors take a piecemeal approach to technology innovation. They do well at finding and assessing new ideas, only to run into a shortage of people and skills during execution. Often the managers charged with execution are simply too busy addressing immediate urgent tasks to implement capably new ideas that will bear fruit tomorrow. Success is mostly a function of execution. (http://www.awprofessional.com/articles/article.asp?p=99978&seqNum=3&rl=1)

In fact, existing business models are of many kinds:
- Advertising - banner and direct marketing
- Subscription sites
- Customer services
- Directory services
- Content providers
- Product sales
Most successful companies pursue several related but different models concurrently. They defy easy categorization by diversifying revenue streams and becoming hybrids in a cost-efficient way (http://www.stylusinc.com/enhance/Ecommerce/InternetBusinessModels.php)

2. In addition to the success factors mentioned above by Kalakota and Robinson (2003), several important and key factors that a profitable web site needs to concentrate on are as follows:
- Develop a unique web site
- Control the product line
- Introduce new products on a regular basis
- Ensure easy and reliable credit-card payment methods
- Provide customer-friendly policies
- On-time delivery
- Keep promises
- Develop a clever marketing strategy
- Be the best in your field http://www.stylusinc.com/enhance/Ecommerce/InternetBusinessModels.php

Critical success factors to remember regarding digitization, according to Kalakota and Robinson (2003): It's not just about technology; it is also about processes and execution. In fact, from this perspective, managing digitization, from vision to implementation, is where you will either succeed or fail. Kalakota and Robinson (2003) spotlight seven points:
1. The current business environment is described in terms of "chaos," "revolution," or simply "change." There is a clear pattern that can be gleaned from the turmoil: nonstop digitization of business processes.
2. Services digitization builds on the efforts of e-business and e-commerce. Digitization is the outcome of the nonstop business need to be more customer-driven and process-centric.
3. A successful digitization effort is one in which the company treats technology not as a sole solution, but as an enabler for innovating, improving, and integrating business processes. Process digitization has three dimensions: the type of interactions (uni- versus multi-channel), the scope of integration (business unit versus cross-enterprise), and the degree of ...

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