Chapter 1: Introduction to Electronic Commerce (continued) IV. Identifying Electronic Commerce Opportunities Internet technologies can improve businesses in many ways. One way is to break the business down into value-adding activities that generate profit and benefit together. Commerce is conducted by all kind of firms. Smaller firms can focus on product, distribution, channel, or type of customer; while a larger company might sale a different product or service through a variety of distribution channels, to several types of people. In the larger company, managers organize around the business units. Multiple business units owned by the same set of shareholder make up a firm or company, and multiple firms that sell similar products to similar customers make up an industry. A. Strategic Business Unit Value Chain A value chain is a way of organizing that each the activities that each business unit undertakes to design, produce, promote, market, deliver, and support the product it sales. These primary activities also include supporting activities such as human resources management and purchasing. Identify Customers: activities that help the firm find new customers and new ways to serve existing customers, including market research and customer satisfaction surveys Design: Activities that take a product from concept to manufacturing, including concept research, engineering, and test marketing Purchase materials and supplies: Procurement activities, including vendor selection, vendor qualification, negotiating long-term supply contracts and monitoring quality and timeliness of delivery Manufacture product or create service: activities that transform materials and labor into finished product, including fabricating, assembling, finishing, testing, and packaging Market and Sell: activities that give buyers a way to purchase and that provide inducements for them to do so, including advertising, promoting, managing salespersons, pricing, and identifying and monitoring sales and distribution channels Deliver: activities that store, distribute, and hip the final product, including warehousing, handling materials, consolidating freight, selecting shippers and monitoring timeliness of delivery. Provide after-sale service and support: activities that promote continuing relationship with the customer, including installing, testing, maintaining, repairing, fulfilling warranties, and replacing parts The other activities are similar to those for a product manufacturing business unit. Financial and administration: activities that provides the firm’s basic infrastructure including accounting, paying bills, borrowing, funds reporting to government regulators, and ensuring compliance with relevant laws Human Resources: activities that coordinate the management of employees, including recruiting, hiring, training, compensation, and providing benefits Technology development: activities that help improve the product or service that the first sis selling and that help improve the business processes in every primary activity including basic research, applied research and development, process improvement studies and field test of maintenance procedures. B. Industry Value Chain The strategic business unit has great important within its industry. The value system describes a larger group of activities in a particular business value chain. Business consultants and subsequent researchers also refer to value system as industry value chain. C. SWOT Analysis: Evaluating Business Unit Opportunities Most electronic commerce initiatives add value by either reducing transaction costs, creating some type of network effect, or a combination of both. In a SWOT analysis(Strengths, Weaknesses, Opportunity, and Threats), the analysis first looks into the business unit to identify strengths and weaknesses. The analyst reviews the environment in which the business unit operates and identifies opportunities presented by that invironment and the threats posed by the environment. By considering all of the issues that it faces in a systematic way, a business unit can formulate strategies to take advantage of its opportunities by building on its strengths, avoiding any threats, and compensating for its weaknesses.
Posted on: Wed, 17 Sep 2014 14:18:01 +0000