Business Strategy - Introduction

Introduction

A business strategy is a set of plans for achieving superior long-term returns on the capital invested in a business firm. A business strategy is therefore a plan for making profits in a competitive environment over tne long-term.

Profit is simply the difference between the price a firm is able to charge for its products and cost of producing and distributing goods.

Profit represents economic value. Economic value is created anytime customers are willing to pay more for a product than it costs to produce.

Why would anyone pay more for a product than it costs to produce? There are multiple answers. The product may be unique (there are no other suppliers), it may be the least costly product of its type available, consumers may be able to purchase the product anywhere in the world, or it may satisfy some unique needs that other products do not. Each of these sources of economic value defines a firm's strategy for positioning its products in the marketplace. There are four generic strategies for achieving a profitable business:

Differentiation,
Cost,
Scope, and
Focus.

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Advantages of EDI

1) Shortened Ordering Time : Paper orders have to be printed, enveloped and sent out by the customer's post room, passed through the postal service, received by the supplier's post room and input to the supplier's order pocessing system. To achieve all this, reliably, in under three days would be to do very well. EDI orders are sent straight into the network and the only delay is how often the supplier retrieves messages from the system. Orders can be in the supplier's system within a day, or if there is urgency, the messages can be retrieved more frequently, for example every hour. 2) Cost Cutting : The use of EDI can cut costs. These include the costs of stationery and postage but these will probably be fully matched by the costs of running the EDI service. The principle saving from the use of the EDI is the potential to save staff costs. For example, if the orders are directly input to the system there is no need for an order entry clerk. 3) Elimination of Errors :...

Infrastructure for EC

Introduction The e-commerce infrastructure is defined here as the supporting capabilities for online trading between multiple companies which include hardware, software, networks, online payment technologies, security and encryption technologies, online trading business models, legal and regulatory framework, and managerial and organisation capabilities. Infrastructure is the shared human, informational , and technical resources on which the work system relies in order to operate, even though these resources exist and are managed outside of the work system. To evaluate the interdisciplinary aspects of construction e-commerce infrastructure, one proposes using a four pillar approach. Figure 5.1 illustrates the skeleton for the proposed integrated construction e-commerce infrastructure. The proposed integrated e-business infrastructure can be broken down into the following four groups of components: 1) Technological Infrastructure : Technology infrastructure is a work...

Business Strategy - E-Commerce Strategy Inputs

E-Commerce Strategy Inputs Traditionally an IT strategy would be subservient to the business strategy. For e- commerce the IT strategy becomes a central component (or the determinant factor) in business strategy. Inputs to an e-commerce business strategy are: Technology An E-commerce technology includes: EDI : Streamline supply logistics and facilitate decreases in trade cycle times. Electronic Markets : Re-define the operation of a market sector. Internet E-Commerce : Provides new direct sales opportunities and novel business to business and business to consumer applications. Internet e-commerce can be used to improve, transform and re-define business value: Organisation Source of Business value i) Improve it a) Product promotion b)New direct sales channel c)Direct saving d)Time to market e)Customer service f)Brand image ii)Transform it a)Technological and organizational learning b)Customer relations iii)Re-define it a)New pro...

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