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Can SMEs Improve Their Performance by Aligning Their E-business Activities with Their Business Strategy?

Paper Type: Free Essay Subject: Business Strategy
Wordcount: 4133 words Published: 8th Feb 2020

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Table of Contents

Part 1- Research Questions  2

Introduction  2

Research Methodology 3

Part 2- Proposal and Justification for an e-business strategy 4

1.Outline the strategy expected in the organisation  4

2.Main changes expected in the organisation  6

2.1.Promotional Alliances and Advertising 6

2.2.Improving customer service through distribution Center 6

2.3.Pricing Strategy 6

2.4.Product Line Expansion and Service Improvement 6

2.5.Competitor Strategies 7

2.6.Implementing conversational commerce 7

3. Implementation plan for the organisation & how changes will be achieved 7

4. Benefits for the organisation and how it can be measured 9

4.1. Measurement of E-business Evolution model 10

5. Conclusion 12

References 13

Grading sheet 14

Part 1 – Research Questions

  1. Can SMEs improve their performance by aligning their e-business activities with their business strategy?
  2. What factors are creating a successful e-business?


Electronic commerce is reshaping numerous parts of the business and the public activity. Organizations need to adapt their strategies to the new realities that they need to be focused in the marketplace. Online business is another method for leading business and its impact is expanding each year (Chong, 2008).The purposes behind executing an e-commerce strategy can fluctuate from company to company. According to (Xu and Quaddus, 2009), while in the enormous organizations the main intentions are to improve effectiveness in their internal procedures; small organizations are more concerned about the competitiveness. Various business activities such as imparting, transacting, environmental scanning and collaborating with different companies are currently done through the web and the internet.

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The intricacy of innovative decisions, execution difficulties, personnel training costs and the consistent refreshing of frameworks request that organisation focus on their e-business activities upon their business strategy. Managers in the small organizations need to conquer the barriers and understand the advantages from online business so as to avert the danger of aggressive impediment in their businesses (Abid et al, 2011; Stockdale and Standing, 2004).

Recent research has appeared in spite of innovation encouraging improved business practice in terms of developing electronic markets, electronic data interchange and internet commerce (whiteley, 2000). Conversational business may include both human interaction just as bots. Conversational commerce likewise incorporates all discussions identified with customer commitment and conversation chat on a website or on mobile interaction on Twitter, Facebook or Instagram including the sharing of a connection, on offer or the sending of a purchase base, and so on. A number of SMEs have not exploited this new method of carrying out business (Quayle, 2002).


Research Methodology

E-business strategy development methods, this method is designed to help organizations in re-examining an organization’s corporate technique to expand its e-business strategy. It was found that business heads require a strategy that adventures qualities, limits shortcomings, gains by circumstances, and limits dangers to efficiently modify business procedures to quickly changing business conditions. The strategic breakout methodology consecutively pursues four coherent stages: start, analyse, breakout, and transition (Hackbarth and Kettinger, 2000). The start stage imagines potential vital change, confirms top administration support, and decides an undertaking plan. Analyse stage assembles data about the qualities and shortcomings of the organization just as circumstances and dangers present inside the organization’s business.

The breakout stage details an E-business system with the target of breaking out of the crate by utilizing E-business innovation to change procedures and individuals to more readily contend in a dynamic worldwide commercial center (Hackbarth and Kettinger, 2000). The transition stage perceives the truth that the breakout procedure may not be promptly reachable on account of an organization’s reluctance to change, absence of accessible assets, or deficiency of qualified individuals.

Part 2 – Proposal and Justification for an e-business strategy

(Option e – course work specification)

According to the (Hackbarth and Kettinger, 2000) the term e-business instead of e-commerce, because ecommerce has turned out to be synonymous with just executing business over the Internet, while e-business includes on a very basic level re-examining the plan of action to change an organization into a digitally networked enterprise (Higgin, 1999). An e-business is an enterprise with the capacity to exchange value (products, administrations, cash, and information) digitally. It has appropriately planned business forms for this better approach for leading business.

E-business is a new method for doing business that includes connectivity, transparency, sharing, and integration. It associates the extended enterprise through a universal digital medium to accomplices, providers, and clients. It requires the integration and alignment of business forms, technology, and individuals with a consistently developing e-business strategy. Turning into an E-business does not occur medium-term. As organizations evolve, they pass through three particular levels of e-business strategy improvement and competence.

1. Outline the strategy expected in the organisation

The most significant piece of operating a successful online business is to begin with a plan. Going in aimlessly are significantly more likely to fail. The organisation also layout a total setup of the costs that would be engaged with beginning and operating the web based business. Many organizations are still at Level I (Experimentation), whereby singular divisions have taken an innovative lead in creating disengaged Internet applications. These islands of Web innovation are not firmly attached to corporate procedure or a companywide e-business strategy.

Numerous industry leaders (e.g., Wal-Mart, Seagram’s, CISCO, and Tesco Stores) have effectively moved to Level II (Integration). These organizations join e-business to help their present business strategies by integrating across functional departments. Their focus is on the immediate help of existent business process.

Level II organizations are driven by the guarantee of cost decreases, income upgrade, and expanded business support of existing working models. Utilizing advances such as virtual private networks (VPN), electronic data interchange (EDI), electronic funds transfer (EFT), and Web-based order fulfilment, and these organizations accomplish linkages with clients and providers. The shared factor in these successful Level II e-business organizations is a business process view attached legitimately to their primary concern and a culture that constantly hones process effectiveness with Information Technology (IT) advancements. To move from Level I to Level II, organizations must try to connect their corporate strategies with the scattered digital initiatives occurring throughout the organization.

(Hackbarth and Kettinger, 2000)

Table1: Levels of E-business Strategy

Level III organizations enable themselves by utilizing e-business strategy to drive corporate strategy. Organizations grow between big business process linkages between clients, providers, and partners to make seamless networks. The integration of these linkages is determinedly more transparent, with sharing and trust being much increasingly typical. The value chain progresses toward becoming interconnected so that new revenue streams are distinguished and created, client satisfaction increased, and customer service dramatically improved.

Becoming a Level III organization symbolizes the changed organizations of the twenty-first century that utilization “E-breakout Strategies” to build stronger customer ties, exploit intellectual capital, and influence agreeable relationships with competitors. To accomplish this win-win approach, organisation should persistently react to strategic threats and gain by market opportunities.

2. Main changes expected in the organisation for successful e-business

2.1. Promotional Alliances and Advertising

Promotional alliances and advertising were significant gadgets utilized early on by the organizations in their attempt to attract visitors. A promotional alliance is essentially an advertising and promotion contract combined with a long-run relationship. Web partners give connects to the organisation web site and advance the firm’s items. Investments in promotional alliances and advertising have lessening minor returns: investments early in the company’s life have a more positive effect on the firm’s value than those later on.

2.2. Improving customer service through distribution Center

Offline customer service center and distribution center extension includes renting or purchasing bricks-and-mortar facilities to warehouse products and handle transporting and administration. The advantage of offline customer service center and distribution center extension is that more clients can be served and shipping times can be diminished. The expense of offline extension is resolved by the opportunity costs of the facilities being acquired or rented and the resources utilized in the administration effort.

2.3. Pricing Strategy

A firm endeavouring to expand sales may bring down costs to attract clients. However, price decreases are effectively imitated, prompting price wars that lower everybody’s benefits and provide nobody with a relative benefits. Price decreases are not effectively turned around in light of the fact that competitors respond by bringing down their own prices. Further, price decreases are normally promoted so as to increase their impact, thus they can’t be switched without inducing a loss of reputation among consumers.

2.4. Product Line Expansion and Service Improvement

One of the fundamental issues firms face when entering new environment is that they don’t know how shoppers value the different items and services the firms can present. Subsequently, botches are likely, and we ought to watch numerous activities that lower esteem. Further, numerous activities will have close to nothing or no effect on value. If product offering extension and service improvement programs prevail in general, achievement can be followed to a moderately modest number of successful activities.

2.5. Competitor Strategies

Most techniques intended to attract additional clients draw a few clients away from competitors. In general, most strategies intended to build a firm’s value decrease its competitors’ values: probably a portion of the value picked up is at the contenders’ cost. This adverse impact on a firm’s competitors is well on the way to be seen when the procedure influences the competitor’s fundamental lines of business. The general size of the organizations additionally matters.

2.6. Implementing conversational commerce

Two trends-the detonating fame of mobile messaging apps and advances in artificial intelligence are coinciding the link another generations of tolls that empowers brand to speak with clients in incredible new ways at decreased cost. Retailers and technology organisations are experimenting within chat bots, powered by mixes of AI and natural language handling and live administrators to give client service sales support and other trade related functions.

3. Implementation plan for the organisation and how the changes will be achieved.

Effective alliance promoting includes planning the qualities of various organizations so as to satisfy a market need. This requires critical pre-planning, just as a continuous exertion to keep up the new business relationship. It can be implemented by using some crucial elements such as select the correct accomplices, establish joint advertising duties in advance, teach “internal customers”— sell the alliance to the rest of your organization and plan long-term programs & aim for long haul results. At present, advertising and promotions on the World Wide Web are practically ordinary.

Organizations are creating Web pages in some cases just to appear up-to-date and also firms prefer telemarketing advertisement in rise. The majority of business begin with Facebook Ads or Google Ad words is the most famous and easy to use stages for advertising.

Figure 1: E-business Ladder for SME

Nowadays, the distribution center is the place the most significant piece of business happens and making clients cheerful. That is on the grounds that distribution centers are presently fundamentally in charge of getting the correct item to the correct clients. Empowering Omni channel strategies like BOPIS, or the converse, requesting a thing in store to be dispatched to your home.

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In the firm website must include high quality of images and photos to attract the visitors. Outside the physical world, clients can’t touch the item and are making on their purchasing choices altogether dependant on item image and reviews. Appearing visible thumbnails in the search items page – this will enable clients to locate the ideal item in a single tick and improve thought of what are you advertising.

Customer Relationship Management (CRM) software has useful for many large and medium enterprises to improve customer relations. Intuitive voice reaction innovation is another enhancer for CRM in e-business. It can impersonate most activities of live operators, for example, recognizing clients by name, inquiring for recognizable proof check, talking in any dialects, or interfacing with a live specialist whenever suitable. This new innovation can even permit consider focuses to contact their clients all the more every now and again to offer new administrations and improve the connection between the organizations and their client (Lubben, 2006).

Channel Implementation – Picking the most proper and viable channels is another significant strategy that firm must accomplish. Organisations should continually assess the potential channels accessible to them. This implies they should legitimize which ones they should utilize and how well they are utilizing those they have picked (Nguyen and Newby, 2007). Perceiving these clashes is certainly not a hard activity yet how to improve or make another strategy requires consideration and research. Companies can utilize the road map matrix of looking at the old business technique mapping to the new business strategy mapping to accomplish this acknowledgment.

Block chain today, can be effectively regarded as a standout among the most secure platforms. Cyber-attacks and information theft has expanded ten times, there is an unavoidable danger of losing clients information. Consequently, embracing block chain is an absolute key to tackling these difficulties. Block chain can be broadly utilized to comprehend supply chain issues like recordkeeping, tracking of items as a less corruptible and better option in contrast to the unified database.

4. Benefits for the organisation and how it can be measured

The web and e-business have turned out to be progressively diffused all around, uniting nations into a worldwide organized economy (Gibbs and Kraemer, 2004). While there are various benefits of leading business on the web, the most prominent ones are: 1.It offers direct connections with clients, providers and merchants and encourages exchanges; 2. Encourages data exchange; 3. Empowers organizations to grow new items and services for existing and new clients (Walters and Lancaster, 1999).

The benefits for the e-business organisations shown in Table 2.



Improved day to-day productivity

Minimal effort everyday activity and improved access to items and services from clients

Save cost

By improved client services, less staff and time to keep up client activity; diminished material costs

Achieving enormous number of clients

Organizations can achieve new markets in different locales and nations. Firms can expand their marketplace.

Improved client services

The organizations can offer assortment of new service contributions and improve the quality, with diminishing the time.

High capacity to compete

Through web based business independent venture can contend at a similar dimension as the biggest by being more flexible.

Improved distribution channel

Small organizations can widened their supplier bases using e-marketplaces.

Increased sales

E-commerce prompts expanded sales.

Increased adaptability of communication

E-business have new potential outcomes for communication between partners.

Better access to data

Expanded capacity to get data about clients and providers, expanded data exchange.

Better consumer loyalty through interesting items

Tailor extraordinary consumer products and services to people prompts better consumer loyalty.

Table 2: Benefits of E-business

4.1. Measurement of E-business Evolution model

The E-business Measurement Evolution model comprises of nine phases which can help SMEs to comprehend the dimension of e-business in their firm (Abdullah et al., 2018).

Stage zero methods the business does not have web access.

Stage one (Emails) implies the business does not have a site but rather gets to data and services on the web and uses email for communicating.

Stage two (Social Media) implies the business has pages on interpersonal organizations, for example, Facebook and utilizes these pages to promote their items and services just as to incorporate data about the business and contact information.

Stage three (Websites) implies the business has it’s possess sites which just incorporate exceptionally essential data about the business; depends on clients initializing contact for additional data.

Stage four (E-commerce) implies clients can get to progressively point by point data about products or services and clients can purchase and pay for product from the site, be that as it may, the site isn’t connected to inside frameworks and requests are handled manually.

Stage five (Mobile Apps) implies the business has created versatile applications which incorporate their item and the shopper can buy products and services through the application.


                                                 (Abdullah et al., 2016)

Figure 2: E-Business Evolution model

Stage six (Cloud Service) implies the business uses cloud services to store their documents, software and applications services. The business will probably get to the applications and services over a scope of devices and systems from anyplace.

Stage seven (E-business) implies the on-line “store” is incorporated with different business frameworks, for example order processing, and satisfaction etc.

Stage eight (Transformed Organization) implies web innovation drives the business inside and remotely, and is utilized to deal with all processes start to end more viably and effectively (Abdullah et al., 2018).

5. Conclusion

E-commerce is a special open door for SMEs to extend their abilities and to encourage business development. E-business significantly and deliberately changes traditional business models. Organizations are currently seeking after increasingly concentrated and intuitive relationships with their business partners: providers and clients. Focused conditions and pressures on worldwide market are constraining organizations to look for strategies of streamlining the whole value chain. To contend successfully, organizations should fundamentally change its inside and outside procedures. These objectives could be come to by concurrent remodel of business processes and execution of electronic business arrangements.


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