E-Impresa: A System Dynamics Strategic Model to Evaluate SME Marketing On Line Investment

Abstract

Electronic commerce, marketing on line, and network economy are today’s keywords of (possible) success. But how many managers effectively know about the cost and benefits of starting to sell their products and services through the Web? How much they should invest at the beginning and how long does it takes to have a break-even point of their investment? In order to give support for better understanding the process of the Web marketing and to have more elements to decide to “dive” or not in this virtual world a System Dynamics (SD) model (Forrester J.W. 1961, 1971, 1980), has been developed. The model has the aim to support strategic decisions for SME involvement in e-Commerce, pointed out to guarantee sustainable growth and medium-long term success. The project e-Impresa1 analyses the whole process of the investment in building and maintaining a web site, taking into account the main variables of E-commerce. Through a case study, a SD business game model has been developed. The model gives the opportunity to users to evaluate different what-if analysis through the simulation period time (2 years) at each model step time (4 weeks). This chapter will explain the overall architecture of the model and will present some results of use of the model in different conditions.