INTRODUCTION TO BUSINESS STRATEGY

Symbiosis Law School, NOIDA

Dr. Megha Chauhan
DEFINING STRATEGY
• Company’s objective & philosophy
• Five ‘P’s’ of Strategy
• Plan
• Ploy
• Pattern
• Position
• Perspective
STRATEGY CONTD.
• Components of Strategic Management
• Analysis, Choice, & Implementation

Business Types:
Big/Small
Manufacturing, Service Provider, Domestic, Multi-National, Private Sector,
Public Sector, Profit, Non-Profit
ANALYZING STRATEGIC CHOICES
• PEST Analysis
• Porter’s Five Forces Model:
• The Bargaining power of Suppliers
• The Bargaining power of Buyers
• Threat of potential new Entrants
• The threat of new Substitutes
• Extent of competitive rivalry
WHY INTERNET
• Level Playing Field
• Connect with the world
• Build your brand
TECHNOLOGY & BUSINESS
• Production
• Marketing
• E-Business
• Communication
• HRM
• R&D

• ……etc. etc.
• INTRANET & EXTRANET
BUSINESS ENVIRONMENT
• The environment of any organization is “ the aggregate of all conditions, events
and influences that surround and affect it.”
Importance
• Firm to identify Opportunities and getting the first mover advantage.
• Firms to identify threats and early warning signals.
• Continuous learning: Environmental analysis makes the tasks of managers
easier in dealing with business challenges.
• Image Building: By showing their sensitivity towards the environment.
• Meeting competition: It helps the firms to analyse the competitors strategies and
formulate their own strategies accordingly.
• Identifying firms strengths and weaknesses.
FEATURES OF BUSINESS ENVIRONMENT
• Business environment is the sum of all factors external to the business firm and that
greatly influence their functioning.
• It covers factors and forces like customers, competitors, suppliers, government and the
social, cultural, political, technological and legal conditions
• The business environment is dynamic in nature and it keeps on changing
• The changes of business environment are unpredictable. It is very difficult to predict the
exact nature of future happenings and the changes in economic and social environment.
• Business environment differs from place to place, country to country.
BUSINESS CAPABILITY
• A business capability defines the organization’s capacity to successfully perform a unique
business activity.
• Capabilities :
• are the building blocks of the business
• represent stable business functions
• are unique and independent from each other
• are abstracted from the organizational model
• capture the business’ interests
A business capability map is:
• a model of the firm associating the business capabilities, processes, and functions
required for business success with the IT resource
• Capabilities should:
• mean something to the business answering questions like “what are the 6 main
activities required to run your business?”
• at the high level represent the 5-9 main generic capabilities of the organization
• could be same as high-level process model
• have a clear management responsibility within the business organization
STRATEGY FORMULATION REQUIRES A
DEFINED SET OF SIX STEPS FOR EFFECTIVE
IMPLEMENTATION
• Define the organization
• Define the strategic mission
• Define the strategic objectives
• Define the competitive strategy
• Implement strategies
• Evaluate progress.
ELECTRONIC COMMERCE
• Electronic Commerce (EC) is where business
transactions take place via internet
• Electronic commerce describes the buying and selling of
products, services, and information via web networks
• The infrastructure for EC is a networked computing
environment in business, home, and government.
• E-Business describes the broadest definition of EC. It
includes customer service and intra-business tasks. It is
frequently used interchangeably with EC.
WHY E-COMMERCE STRATEGY
CONSUMERS:
• Enables customers to shop or do other transactions 24 hours a day, all year round
from almost any location
• Provides customers with more choices
• Provides customers with less expensive products and services by allowing them to
shop in many places and conduct quick comparisons
• Allows quick delivery of products and services in some cases, especially with digitized
products
• Customers can receive relevant and detailed information in seconds, rather than in
days or weeks
• Makes it possible to participate in virtual auctions
• Allows customers to interact with other customers in electronic communities and
exchange ideas as well as compare experiences
• Electronic commerce facilitates competition, which results in substantial discounts.
SOCIETY:
• Enables more individuals to work at home, and to do less
traveling for shopping, resulting in less traffic on the roads, and
lower air pollution
• Allows some merchandise to be sold at lower prices benefiting
the poor ones
• Enables people in Third World countries and rural areas to
enjoy products and services which otherwise are not available
to them
• Facilitates delivery of public services at a reduced cost,
increases effectiveness, and/or improves quality
E-COMMERCE IMPLEMENTATION & EVALUATION
Opportunities
• To gain competitive advantages over other organization.
• Open up new distribution channel and increase sales.
• Support buy and sell product on Internet from any place to anywhere all
over the world without traditional intermediaries. Example Amazon, E Bay.
• Process and transaction can be done rapidly at reasonable cost.
• Cost saving for the organization and their customer.
• Customer are able to choose and discriminate among alternative
product and services.
ISSUE AND CHALLENGES OF GLOBAL IMPLEMENTATION
E-COMMERCE (ECONOMIC FACTORS)
Cost Justification
• High cost of implementation.
• Mistake due to the lack of experience inflate the cost.
Justification of cost not on tangibles factors.
• Justification of cost always based on intangibles factors such as improved the
customer service, increase the value of advertisement and gain competitive
advantages.

Number of sellers and buyers.

• Number of people connected to the Internet.
• E-Commerce project are viable to the developed country which majority of
resident have high income or salary.
ISSUE AND CHALLENGES OF GLOBAL IMPLEMENTATION
E-COMMERCE (TECHNICAL FACTORS)
Security Issues
• Consumers are distrustful about the safety of information.
Incident on unsophisticated hackers can steal information easily.
Many company are not pay enough intention on security.
• Reduce the consumer confidence.

Reliability Issues.
• Network Infrastructure and application systems must be continuously upgraded, fine
tuned and maintained regularly.
• Vulnerable of sites to denial of services attack.
• Vulnerable to the virus spread.
Reduce the consumer confidence .
ISSUE AND CHALLENGES OF GLOBAL IMPLEMENTATION
E-COMMERCE (SOCIAL FACTORS)
Privacy and Security Issues
• Customer are reluctant to buy online, reluctant to disclose the confidential data such as
home address, identification number and credit card number.
• Companies did not give guarantees on security of information.

Cultural Diversity.
• Ability of customization the interface for individual and group needs.
Customization process is expensive.
• Translation of language from English into local languages.

Lack of Trust Issues

• Customer trust is important such as friends recommendation, previous
experience, or through transparent legislative infrastructure.
• Company also need to well established the “brand identity” of company.
Absence of “Touch and Feel” factors
• Most of business working around on this limitation.
• Customer only buy a reasonable price on E-Commerce website.
• Customer did not buy a high price product online. Therefore, web site still in used
for customer for conduct research on product and making comparison on price
offered.
Issue on Internet and Telecommunication Infrastructure
• Digital divide between the developed world and most developing countries. Accessibility to
the Internet is still expensive.
• Global infrastructure of the web is unevenly developed.

Skill Shortage and lack of trained personal.

• The dynamism of the technology and emerging skill such as XML, ASP and PHP programming.
• Need to hire the additional foreign workers form abroad.
ISSUE AND CHALLENGES OF GLOBAL IMPLEMENTATION
E-COMMERCE (LEGAL FACTORS)
Product Sale that are restricted or illegal by another country
• Companies should more careful and fully obey the rules and laws of other country.
Example such as selling the wine, weapons, restricted chemical items or online gambling.

Legal Validity of the Electronic Transaction.

• Traditional business are based on face to face meeting, paper documentation and “wet
signature” as verifier.
• Electronic documents must be customize and should have the same legal validity standard as
written signature.