Business Strategy and Planning

Business Strategy and Planning

Stephen Burgess (Victoria University, Australia), Carmine Carmine Sellitto (Victoria University, Australia) and Stan Karanasios (Leeds University Business School and AIMTech Research Group, UK)
DOI: 10.4018/978-1-60566-224-4.ch004
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Abstract

In the previous chapter we highlighted the importance of planning for an effective Web presence. In fact, the existence of a disciplined planning approach is seen as an enabler for the effective use of ICTs and e-commerce in small businesses,whilst short-range management perspectives and lack of planning are viewed as barriers. This chapter builds on the tenets identified in the previous chapter to examine how a small business might prepare itself for a Web presence. We believe that small business operators/ managers should know their strategic business direction before they consider establishing a Web presence. We will commence by investigating some basic business theory.
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Introduction

In the previous chapter we highlighted the importance of planning for an effective Web presence. In fact, the existence of a disciplined planning approach is seen as an enabler for the effective use of ICTs and e-commerce in small businesses, whilst short-range management perspectives and lack of planning are viewed as barriers (Figure 1).

Figure 1

This chapter builds on the tenets identified in the previous chapter to examine how a small business might prepare itself for a Web presence. We believe that small business operators/ managers should know their strategic business direction before they consider establishing a Web presence. We will commence by investigating some basic business theory.

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Competitive Forces

It is necessary for a small business owner/manager to understand the environment in which the business operates and exists. More than twenty years ago, Porter and Millar (1985) proposed a model that related to competitive forces (refer Figure 2) in an endeavour to assist managers to identify strategic information and communication technology opportunities. Although this model was suggested in a time when ICT adoption was nascent, the basics of the model still tend to hold today. Indeed, Porter in 2001 updated the model in the Harvard Business Review to take into account the value of ICTs. He suggested that that it had become evident that for many businesses it was not whether to deploy ICT, but how to use the technology as a competitive part of business strategy - a strategy that complemented some of the traditional ways that they went about their business (Porter 2001).

Figure 2.

The five competitive forces model (adapted from Porter & Millar 1985)

In planning for a Web presence, a small business should consider those aspects of the competitive forces model that relate to the business. As we are considering setting up the Web presence to deal with customers we will not discuss suppliers as a competitive force. However, they remain an important part of a business’ supply chain. We will now briefly consider the different competitive forces.

Customers

For this book, customers are the target of our Web presence. Chapter VIII covers how a small business Web presence can be promoted to customers. However, it is also important to know whether customers are ready to do business online and, if they are, what they expect. This will be discussed later in this chapter. Arguably, the advent of ICTs has strengthened the bargaining power of customers due to the increased number of products and services that they can access. Previously, access to products and services was restricted by geographical region, whilst now buyers can potentially source their requirements from any business in the world that has a Web presence and the ability to distribute its products and/or services to them in a timely and cost effective manner.

Substitute Products/Service

A substitute product is used to replace an existing product. A recent example of this has been the introduction of ‘digital’ music, which can be downloaded online, competing with the compact disc (which replaced cassette tapes, and so on). It is important for small businesses to key an eye out for what might be happening in their industry, especially if it is an area of constant innovation or change.

New Entrants

This occurs when a new competitor enters the market. These new competitors or entrants to an industry can be a considerable threat because they bring a desire to gain market share, may undertake industry activities in new and innovative ways, and sometimes have a substantial amount of resources. It is beyond the scope of this book to discuss strategies to combat new entrants, however, these strategies can include building barriers to entering an industry sector and attempting to lock existing customers of the business into long term agreements.

Complete Chapter List

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Table of Contents
Foreword
M. Gordon Hunter
Preface
Stephen Burgess, Carmine Carmine Sellitto, Stan Karanasios
Chapter 1
Introduction  (pages 1-26)
Stephen Burgess, Carmine Carmine Sellitto, Stan Karanasios
Over the last decade there has been a great deal of research into the use of Information and Communication Technologies (ICTs) in small businesses.... Sample PDF
Introduction
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Chapter 2
Stephen Burgess, Carmine Carmine Sellitto, Stan Karanasios
Whilst writing this book it has become apparent to us that small businesses face numerous challenges and issues when they are considering their Web... Sample PDF
Web Presence Lessons for Small Businesses
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Chapter 3
Stephen Burgess, Carmine Carmine Sellitto, Stan Karanasios
The new global economy has resulted in the availability of unprecedented opportunities for small business. ICTs in particular have contributed to... Sample PDF
Readiness for a Web Presence
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Chapter 4
Stephen Burgess, Carmine Carmine Sellitto, Stan Karanasios
In the previous chapter we highlighted the importance of planning for an effective Web presence. In fact, the existence of a disciplined planning... Sample PDF
Business Strategy and Planning
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Chapter 5
Stephen Burgess, Carmine Carmine Sellitto, Stan Karanasios
The purpose of this chapter is to discuss how a small business decides upon its Web presence strategy and then determines what features will make up... Sample PDF
Web Presence Strategy and Content
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Chapter 6
Web Presence Hosting  (pages 141-167)
Stephen Burgess, Carmine Carmine Sellitto, Stan Karanasios
In earlier chapters we discussed the need to link Web presence strategy with anticipated small business direction and motivations - where this... Sample PDF
Web Presence Hosting
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Chapter 7
Website Design  (pages 168-196)
Stephen Burgess, Carmine Carmine Sellitto, Stan Karanasios
This is the most technical of the chapters in this book. It is centred on Website design and is the only chapter in the book where we exclusively... Sample PDF
Website Design
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Chapter 8
Web Presence Promotion  (pages 197-222)
Stephen Burgess, Carmine Carmine Sellitto, Stan Karanasios
There are literally millions of businesses with a Web presence on the Web and more and more being added every day, all competing to attract... Sample PDF
Web Presence Promotion
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Chapter 9
Web Presence Governance  (pages 223-252)
Stephen Burgess, Carmine Carmine Sellitto, Stan Karanasios
The initial idea behind this chapter was to expand on the issue of security, predominantly in relation to ensuring that a small business operator... Sample PDF
Web Presence Governance
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Chapter 10
Stephen Burgess, Carmine Carmine Sellitto, Stan Karanasios
This chapter examines the notion of how the success of a small business Web presence can be assessed. In doing so, there is initially a discussion... Sample PDF
Evaluating Web Presence Success
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Chapter 11
A Look at the Future  (pages 275-301)
Stephen Burgess, Carmine Carmine Sellitto, Stan Karanasios
This chapter serves to raise an awareness of some of the more cutting edge Internet innovations and applications that may become viable and useful... Sample PDF
A Look at the Future
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Chapter 12
What Led Us Here?  (pages 302-321)
Stephen Burgess, Carmine Carmine Sellitto, Stan Karanasios
This Appendix provides a brief overview of our PhDs - all of which involved research into small business adoption and use of ICT and Internet... Sample PDF
What Led Us Here?
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About the Authors