The document discusses various business strategies and concepts for operating in an electronic age, including e-business strategy, Porter's value chain model, and online advertising models. It covers defining an e-business strategy, analyzing a company's value chain to understand costs and differentiation, and how to measure the effectiveness of online advertisements through metrics like clicks, impressions, click-through rate, cost per click, and return on investment. Search engine marketing and mobile advertising are also summarized.

1. Business strategies in an electronic age
(DR.SELVAMOHANA.K)

2. • Business strategies in an electronic age
• Value chain –Porters value chain model
• Advertising model
• Strategic implications of IT.

3. Business strategies in an electronic age / E-business strategy
• An E-business strategy defines a long-term
plan for putting in place the right digital
technology for a company to manage
it's electronic communications with all
partners –
• That's internal through the intranet and
externally through to customers, suppliers and
other partners.

4. • Strategy is the long-term direction of the firm.
• Strategy deals with the overall plan for
deploying the resources
• Strategy entails to choose between different
directions and between different ways of
deploying resources.
• Strategy is about achieving unique
positioning vis-à-vis competitors.
• The central goal of strategy is to achieve
sustainable competitive advantage over rivals
and thereby to ensure lasting profitability.

5. • Formulating long-term strategies has become
more difficult due to the continuously changing
business environment.
• How long-term can a strategy be when the
technological environment is permanently
changing?
• This is obviously a difficult question that has no
clear-cut answers to it.
• This was the case, for instance, when
Amazon.com entered the book-retailing market
with its online bookstore and when Napster
launched its file-sharing platform for online
music distribution.

6. • Nonetheless, it is important to be aware of the
trade-offs that arise when a firm gives up long-
term strategy in return for short-term
flexibility.
• Within organizations, we typically recognize
the following three different levels of strategy
• They are (1) corporate-level strategy, (2)
business unit strategy and (3) operational
strategy.

7. (1) corporate-level strategy,
• Corporate-level strategy The highest strategy level, is
concerned with the overall purpose and scope of the firm.
• It typically involves the chief executive officer (CEO) and
top-level managers.
• Corporate strategy addresses issues such as how to
allocate resources between different business units,
mergers, acquisitions, partnerships and alliances.
• Consider, for instance, the merger in 2000 between AOL
and Time Warner, where the CEOs of both firms looked
across all the businesses of their respective companies
before deciding to merge the two corporations.

8. • Another example of corporate strategy that is
important in the e-business context is the
choice of distribution and sales channels.
• For example, the top management of Tesco plc
first made the decision in 1995 about whether
to use the Internet to sell groceries online and
then on how to set it up organizationally,
Today we have many online grocery sellers.

9. (2) business unit strategy
• Business unit strategy is concerned primarily with
how to compete within individual markets.
• Dell, for instance, operates distinct business units
that target large corporate customers, private
households and public-sector customers.
• Since these are very separate markets, with
differing needs and preferences, it is also
necessary to formulate a distinct business unit
strategy for each one of these markets

10. • At a more detailed level, a business unit
strategy deals with issues such as industry
analysis, market positioning and value
creation for customers.
• Furthermore, when formulating a business
unit strategy, it is also necessary to think about
the desired scale and scope of operations.

11. (3) operational strategy.
• Operational strategy deals with how to implement the
business unit strategy with regards to resources,
processes and people.
• In the context of e-business, this includes issues such as
optimal website design, hardware and software
requirements, and the management of the logistics
process.
• Furthermore, this also includes operational
effectiveness issues, which are addressed by techniques
such as Business process reengineering (BPR) and total
quality management (TQM).

12. • Although these approaches are important, they
do not belong intrinsically to strategy
formulation,
• strategy is about making trade-offs; that is,
about deciding which activities a firm should
perform and which ones it should not perform.
• Operational issues are of high importance for
any organization to flourish in its business and
E-business firms are of no exemption.

13. Thefocusarea of the casesis on corporatelevel and business unit strategy

14. value creation
• The concept of value creation deserves special
attention because many Internet start-ups that
ended up in bankruptcy.
• In a harder and more turbulent business
environment, it is imperative that strategies focus
on what value to create and for whom, as well as
how to create it and on how to capture the value
in form of profits.
• In economic terms, value created is the difference
between the benefit a firm provides to its
consumers and the costs it incurs for doing so.

15. Value Chain Definition
• Every organisation consists of a chain of activities
that link together to develop the value of the
business.
• The value chain identifies where the value is
added in the process and links it with the main
functional parts of the organisation.
• It is used for developing competitive advantage
because such chains tend to be unique to an
organisation.
• It then attempts to contribution to the overall
added value of the business.

16. Essentially, Porter linked two areas together:
• The added value that each part of the organisation
contributes to the whole organisation
• The contribution that each part makes to the
competitive advantage of the whole organisation.
• Value Chain thus views the organisation as a chain of
value-creating activities.
• Value is the amount that buyers are willing to pay for
products/services produced by the firm.

17. Value Chain Analysis
• The value chain Analysis explained using Porter’s
Value Chain model.
• The analysis is a business management tool that was
developed by Michael Porter and described in his
popular book Competitive Advantage: Creating and
Sustaining Superior Performance in 1985.
• Value chain analysis is a process where firm focuses
on analyzing its primary and support activities of a
business to understand costs, locate the activities that
add the most value, and differentiate from the
competition.

18. Classification of Porter’s Value Chain model
According to Porter’s Value Chain model,
value chain activities are divided into two
broad categories.
• Primary activities
• Support activities

19. Primary activities
Primary activities contribute to the physical
creation of the product or service, its sale and
transfer to the buyer and its service after the sale.
The primary activities are
• inbound logistics,
• operations/production,
• outbound logistics,
• marketing, and services.

20. Inbound Logistics
• These activities focus on inputs. They include
material handling, warehousing, inventory
control, vehicle scheduling, and returns to
suppliers of inputs and raw materials.
Operations
• These include all activities associated with
transforming inputs into the final product, such
as production, machining, packaging,
assembly, testing, equipment maintenance etc.

21. Outbound Logistics
• These activities are associated with collecting,
storing, physically distributing the finished
products to the customers.
• They include finished goods warehousing and
delivery, vehicle operation, order processing and
scheduling.
Marketing and Sales
• These activities are associated with the purchase
of finished goods by the customers.
• They include advertising, promotion, sales force,
channel selection, channel relations and pricing.

22. Services
• This includes all activities associated with
enhancing and maintaining the value of the
product.
• Installation, repair, training, parts supply and
product adjustment are some of the activities
that come under services.

23. Support activities
It includes
• procurement,
• HR .
• Firm infrastucture
Human Resource Management
• Activities associated with recruiting, hiring, training,
development, compensation, labour relations,
development of knowledge-based skills etc.
Firm Infrastructure
• Activities relating to general management,
organisational structure, strategic planning, financial
and quality control systems, management information
systems etc.

24. Procurement
• Activities associated with purchasing and providing
raw materials, supplies and other consumable items as
well as machinery, laboratory equipment, office
equipment etc.
• Porter refers, procurement as a secondary activity,
although many experts would argue that it is (at least
partly) a primary activity.
• Included are such activities as purchasing raw
materials, servicing, supplies, negotiating contracts
with suppliers, securing building leases and so on.

25. Technology Development
• Activities relating to product R&D, process
R&D, process design improvements,
equipment design, computer software
development etc.

26. Steps in value chain analysis
Identify Activities
• The first step in value chain analysis is to divide a
company’s operations into specific activities and group
them into primary and secondary activities.
• Within each category, a firm typically performs a
number of activities that may reflect its key strengths
and weaknesses.
Allocate Costs
• The next step is to allocate costs to each activity.
• Each activity in the value chain incurs costs and ties up
time and assets.
• Value chain analysis requires managers to assign costs
and assets to each activity.

27. Identify the Activities that Differentiate the Firm
• Scrutinizing the firm’s value chain not only
reveals cost advantages or disadvantages but also
identifies the sources of differentiation advantages
relative to competitors
Examine the Value Chain
• Finally, in assessing the value chains there are two
levels that must be addressed
• Interrelationships among the activities within the
firm.
• Relationships among the activities within the firm
and with other organisations that are a part of the
firm’s expanded value chain.

28. Advantages of Value Chain Analysis
• Fully understand the associated costs and areas of
differentiation by breaking product and service
activities into smaller pieces.
• Identify those activities where we can quickly reduce
cost, optimize effort, eliminate waste, and increase
profitability.
• Analyzing activities also gives insights into elements
that bring greater value to the end-user

29. Disadvantages of Value Chain Analysis
• Not a simple practice to implement a firm operates in a
dynamic environment.
• Difficulties involved in gathering the data and find
appropriate information in order to break value chain
down into primary and supporting activities.
• Difficulties in finding the appropriate information in
order to break value chain down into primary and
supporting activities.

30. Value Chain Analysis Example
• Value chain analysis allows businesses to
examine their activities and find competitive
opportunities.
• For example, McDonald's mission is to
provide customers with low-priced food items.
• And the analysis helps McDonald's identify
areas for improvement and activities that add
value to their products and services or
activities.

31. Below is an example of a value chain analysis for
McDonald's and it's cost leadership strategy.
Inbound Logistics
• McDonald's has pre-selected, low-cost suppliers
for the raw materials for their food and beverage
items. It sources suppliers for items like
vegetables, meat, and coffee.
Operations
• The business has a franchise and each
McDonald's location is owned by a franchisee.
There are more than 37,000 McDonald's
locations worldwide.

32. Outbound Logistics
• Instead of formal, sit-down restaurants, McDonald's has
fast-casual restaurants that focus on counter-service,
self-service, and drive-through service.
Marketing and Sales
• Its marketing strategies focus on media and print
advertising, including social media posts, magazine
advertisements, billboards, etc.
Services
• McDonald's strives to achieve high-quality customer
service.
• And it provides its thousands of employees with in-
depth training and benefits so they can best assist their
customers.

33. Online Advertising Model
“Think like a publisher, not like a marketer.”
Online Advertising
• Online advertising is a type of business
promotion which uses Internet to deliver
marketing messages to attract customers.
• With the rapid growth of Internet users and
Internet technology, a number of businesses
started to advertise their products and services
online.

34. Publishing an Online Advertise
• Publishing an online Ad is a sequential
process. The following diagram shows the
basic steps an Ad publisher takes to create and
post the Ad online −

35. Ad Planning
• The marketing team conducts analysis of various
domains.
• Marketing analysis
• Audience analysis
• Customer targeting analysis
Based on the analysis results, the advertiser decides
on
• Selecting a publisher
• Ad presentation approach
• Approach of posting the Ad
• Ad posting schedules

36. Creating Ad Space Catalog
• Ad space list is created to record Ad space availability
status, space profile, location, presentation, scheduling
method, frequency, etc.
Trading Ad Space
Advertisers and Publishers interact to determine online
Ad space. There are three types of Ad space trading −
• Buy and Sell − Publishers sell the Ad space schedule to
Advertisers on first-come-first-serve basis.
• Space Auction − Ad space bidding is conducted to
settle the trade.
• Space Exchange − Multiple publishers interact with
each other to sell the space schedules available with
them, which have not been sold.

37. Scheduling the Ad Space
• The online publishers create and maintain
advertising schedules for the online Ad space.
• They help the advertisers for booking,
purchasing, and confirming various schedules
for online advertisements.
Materializing the Ad Space
• The online publishers collect advertisement
from the advertiser and materialize the
specified ad spaces by displaying the
advertisement as per the specified schedules.

38. Measuring an Ad Space
• All active Ad spaces in the publishing websites
are monitored and measured.
• After the Ad is actually visible and accessible
online, it is evaluated regularly for performance.
• The analyzers collect data and evaluate the
effectiveness on the viewers, its popularity, Ad
space management, etc.
Ad Closure
• The advertisers pay the publishers by pre-decided
terms of payment for the published online Ad.

39. Online Advertising – Measuring Effectiveness
The performance metrics of Online Ad are as follows −
Clicks − It is the number of times viewer clicks the Ad.
• It can be taken as viewer’s acknowledgement to your
Ad.
• It suggests that the viewer has seen the Ad and wants
further information.
Impressions − It is the number of times your Ad is
displayed on the web page.
Click Through Rate (CTR) − It is the ratio of Ad clicks
to Ad impressions. The higher the CTR, the more
relevant your Ad is.

40. Cost Per Click (CPC)
• It is the amount advertiser pays for each click on
the Ad.
• The number of clicks determines the amount of
payment. The lower CPC is better.
Cost Per Thousand Impressions or Cost Per
Mille (CPM)
• It is the amount the advertiser pays for thousand
clicks.
Return On Investment (ROI)
• It is (Return – Investment) X 100. The higher ROI
is better.

41. Advantages of Online Advertising
• Internet access is easy and affordable.
• Internet is capable of serving multimedia substance
such as audio and video content apart from text and
graphics.
• Internet by nature is interactive.
• It can provide a reliable platform for smooth shopping
experience for people.
• No time or demographic constraints on delivering the
online advertise.
• Online advertising is promotional as well as
informational.
• It brings speedy outcomes.
• It provides effective performance tracking.

42. Search Engine Marketing (SEM)
• It is the process of gaining market online by publishing Ads
on search engines, say Google, Yahoo, or Bing.
• SEM involves the promotion of websites by increasing their
visibility in Search Engine Result Page (SERP).
Steps Involved in Search Engine Marketing
Step 1 − Define Effective Strategy
• Define your target audience.
• Identify their needs and motivations.
Step 2 − Choose Right Keywords
• Select most important phrases relevant to your business.
• Also select the phrases that are frequently searched by your
target customers.

43. Step 3 − Optimize Website Content
• Focus on website structure. Keep it simple.
• Create crisp, clear, and correct content that can
retain users’ attention.
Step 4 − Submit Your Website for Indexing
• To be visible online to the customers, ensure
that all the pages of your website are
completely indexed by the search engines such
as Google, Yahoo, and Bing.

44. Step 5 − Add Quality Links to Your Website
• Build links to your website from valued links of other
websites that are frequented by your targeted visitors.
• The more quality inbound links you have, the more
popular your website is with Google and other engines.
Step 7 − Measure Success of Advertise
• Check how well you performed in the past.
• Measure Clicks, ROI, etc.
• Employ Web Analytics to monitor progress and
problems.
• Monitor your position regularly in the search results.

48. Mobile Advertising
It is a form of business promotion on Internet-enabled
mobile devices such as smart phones, e-books, and
tablets to deliver marketing Advertises.
Objectives of Mobile Advertising
• Increasing the brand awareness.
• Promoting business with good Ads across all mobile
phone models, network technologies, and data
bandwidths.
• Providing support for specific engagements.
• Driving sales of the product or service.

49. The Mobile Advertising can be done in the
following ways
Mobile Web Banner Ad
• It is a universal colored graphics Ad unit
displayed on a Mobile website.
• It is a still image or an animation intended for use
in mass-market campaigns.
Text Tagline Ad
• It is an Ad unit that displays only text.
• It also can be used for older mobile phones which
do not provide support for graphics.

50. Text Messaging (SMS) Ad
• The Short Message Service (SMS) allows
communication between mobile phones by
exchanging short text messages limited to 160
characters.
Mobile Video Ad
• These Ads are played as video on the mobile.
• The advertisers need to follow the
recommendation for Mobile Video content

51. Mobile App Ads
• These Ads are launched by the publishers
alongside the host mobile application.
• To minimize user’s frustration about loading
the App, publishers should display these Ads
before launching or after exiting of the
application.

52. Strategic implications of IT.
Meaning of Information Technology
• The technology, which is exclusively designed
to store, process, and transmit information, is
known as Information Technology.
• The following diagram illustrates the basic
features and applications of Information
Technology −

54. Information Technology Act, 2000
• By understanding the growing demand and applications of
Information Technology, the Government of India passed
the bill of Information Technology in 2000, which came to
be known as the Information Technology Act, 2000.
The major features of the Act are −
• It facilitates e-governance and e-commerce by providing
equal legal treatment to users.
• It made provision to accept electronic records and digital
signature.
• It gave legal approval to electronic business transactions.
• The Act instructs banks to maintain electronic record and
facilitate electronic fund transfer.

55. Classification of E-Commerce using IT applications
• Electronic Markets
• Electronic Data Interchange (EDI)
• Internet Commerce
Electronic Markets
• Present a range of offerings available in a market segment
so that the purchaser can compare the prices of the offerings
and make a purchase decision.
• Example: Airline Booking System.
Electronic Data Interchange (EDI)
• It provides a standardized system, Communicated from one
computer to another without the need for printed orders and
invoices & delays & errors in paper handling.
• Example: EDI is used in the large market chains for
transactions with their suppliers

56. Internet Commerce
• It is use to advertise & make sales of wide range of
goods & services. This application is for both business
to business & business to consumer transactions.
• Example: The purchase of goods that are then delivered
by post or the booking of tickets that can be picked up
by the clients when they arrive at the event
Types of E-commerce operates with the aid of IT
· business to business
· business to consumer
· consumer to business
· consumer to consumer

57. E-Commerce applications and IT
• Multimedia Content for E-Commerce Applications
• Multimedia Storage Servers & E-Commerce
Applications
• i. Client-Server Architecture in Electronic Commerce
• ii. Internal Processes of Multimedia Servers
• iii. Video Servers & E-Commerce
• Information Delivery/Transport & E-Commerce
Applications
• Consumer Access Devices