The final theme of this chapter is Internet marketing strategies. It should be noted that it is not the aim of this section to revisit the process of planning online marketing strategies (which has been discussed in Chapter 4), but to consider how Internet marketing strategies might be used and integrated into organisational planning activities.
So far this chapter has focused on the online trading context, the electronic marketplace and trading relationships. In essence, each of these sections forms an integral part of the online strategic planning process. According to Nicholls and Watson (2005), although e-commerce is still a relatively new business activity for many organisations there is a growing understanding within the literature of the importance of strategic thinking to the successful development of online activities. During the dot-com boom many companies were accused of a lack of strategic planning, which was ultimately said to be the cause of their business failures (Porter, 2001). E-strategy has been discussed at various levels from business re-engineering, new approaches to marketing planning to analysing and measuring specifics of web-based activities.
From a strategic planning perspective, Teo and Pian (2003) have found that the level of Internet adoption has a significant positive relationship with an organisation's competitive advantage, which implies that organisations should seriously consider how to engender positive support for online activities. Otherwise organisations that hesitate are likely to be superseded by existing or new competitors. Whilst in the current climate this sounds rather obvious, the business potential that can be derived from adopting Internet technologies is not always immediately clear. This situation helps to reinforce the importance of digital marketing planning as it can help to ensure organisations reduce the risk of losing their competitive edge by missing out on the benefits of new technology. On the plus side, there are increasing opportunities to benefit from innovation, growth, cost reduction, alliance, and differentiation advantages through planned adoption and development of Internet and digital technologies as more trading partners become part of the digital marketspace.
From a tactical planning perspective Teo and Pian (2003) suggest organisations aiming to differentiate themselves via web sites should switch their focus to internal productivity improvement and developing external partner relationships. They should look for opportunities to create productivity improvements through the use of a web site and to streamline business processes.
According to Nicholls and Watson (2005), whether businesses are adopting strategic or tactical approaches towards planning appears to be rather an ad hoc process. They recommend that in order to use Internet technologies effectively businesses need to analyse 'a variety of situational antecedents and then the degree to which the offline and online management infrastructure, marketing and logistics functions should be integrated can be better understood'. (See Figure 11.5 for their model of e-value creation.) The model in Figure 11.5 shows three key areas, the organisation's core strategic objectives, its business characteristics and its internal resources and competencies. Different objectives are likely to suggest a requirement for different structures and strategies. For example, the objectives of pursuing efficiency and cost reduction are likely to benefit from organisation-wide integration of Internet technologies, whereas targeting very narrow niche markets online may not require such investment. The characteristics of the organisation (e.g. size) is likely to have a significant impact on Internet strategies. Smaller organisations will have to consider carefully how to resource a fully transactional web site and handle the logistics. Furthermore, the core resources and competencies will impact on the extent to which the Internet represents an opportunity to create competitive advantage.
It is perhaps reasonable to suggest that organisations are reconsidering the e-commerce proposition in the light of the boom-and-bust dot-com era. Indeed, there is a good deal of emphasis currently being placed on the supply-side of e-commerce strategies. Streamlining of procurement systems through the use of Internet technologies can make significant cost reductions, which can produce useful financial benefits. Furthermore, organisations operating in B2B sectors are better placed to implement such systems than the B2C organisations because they are:
• familiar with the use of the similar techniques of EDI (although this is beyond the reach of many SMEs);
• under pressure to trade using e-commerce as often major customers such as supermarkets may stipulate that their suppliers must use e-commerce for reasons of efficiency and cost. Alternatively, if a company's products are not available direct on the Internet then the company may lose sales to other companies whose products are available;
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