Identifying E-Business and E-Commerce Strategies

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Companies need a strategic framework that can bridge the gap between simply connecting to the Internet and harnessing its power for competitive advantage. Web based systems and applications allow companies to transcend communication barriers and establish connections that will enhance productivity, stimulate innovative development, and improve customer relations.

E-business and E-commerce applications and Internet technologies can be used strategically for competitive advantage. However, in order to optimise this strategic impact, a company must continually assess the strategic value of such applications.

A strategic positioning matrix can help a company identify where to concentrate its use of Internet technologies to gain competitive advantage with E-business and E-commerce. Lets take a look at the strategies that each quadrant of this matrix represents.

"E-business and E-commerce applications and Internet technologies can be used strategically for competitive advantage. However, in order to optimise this strategic impact, a company must continually assess the strategic value of such applications."

Cost and Efficiency Improvements
This quadrant represents a low amount of internal company, customer, and competitor connectivity and use of web systems via the Internet and other networks.

So one recommended strategy would be to focus on improving efficiency and lowering costs by using Internet and web systems to communicate and interact with customers, suppliers, and business partners. The use of E-mail, chat systems and discussion forums on your company website are typical examples.

Performance improvement in Business Effectiveness
Here a company has a high degree of internal connectivity and pressures to substantially improve its business process, but external connectivity by customers and competitors is still low.

A strategy of making major improvements in business effectiveness is recommended. For example, widespread use of web-based technologies like intranets and extranets can substantially improve information sharing and collaboration within the business and with its trading partners.

Global Market Penetration
A company that enters this quadrant of the matrix must capitalise on a high degree of customer and competitor connectivity and use of web systems.

Developing E-business and E-commerce applications to optimise interaction with customers and build market share is recommended. For example, E-commerce websites with value added information services and extensive services and extensive online customer support would be one way to implement such a strategy.

Product and Service Transformation
Here a company and its customers, suppliers, and competitors are extensively networked. Web-based technologies including E-commerce websites, and E-commerce intranets and extranets, must now be implemented through the company’s operations and business relationships.

This enables a company to develop and deploy new web-based products and services that strategically reposition it in the marketplace. Using the internet for electronic commerce transaction processing with customers at company websites, and E-commerce auctions and exchanges for suppliers are typical examples of such E-business applications.

The bottom line, a strategic positioning matrix helps a company optimise the strategic impact of web-based technologies for electronic business and commerce applications.