E-business in a Danish SMEcontext

Transcription

1 E-business in a Danish SMEcontext INTERNATIONAL BUSINESS STRATEGIES II December 1/12/2003 Morten Rask Nothing stays the same Not everything is changed The Four Lane Road (Edward Hopper) Morten Rask 2 1

2 Agenda Background International web strategies E-commerce in Scanima Summary: International business strategies The next lectures Morten Rask 3 My Background Ph.D: Global Industrial E- business Internet access in millions - Case-study: Scanima Trainee: Silicon Valley, USA okt-95 mar-97 jul-98 dec-99 apr-01 sep-02 Morten Rask 4 2

3 A rather stable picture of Internet penetration (except submitting orders) IT usages in Danish firms 2002 According to Statistics Denmark Percentages of all firms Firms with IT Internet Access Homepage Submit orders on the Internet Revieved orders on the Internet Number of employees Morten Rask 5 Global B2B E-business Extranet and/or homepages Ordering and sales Procurement database and/or Intranet Sælger Sælger Sellers Intermediary Køber Køber Buyers Homepages E-marketplaces Customer service via e- mail & web Morten Rask 6 3

4 Internet supports almost all trade processes Buyer Information seeking and evaluation Negotiation Sales and monitoring Distance service Near service Seller E-markets Brochure/Manual Company Homepage Shop Manual Human Beings Morten Rask 7 Face2Face and interface - that's the problem Internet makes is possible to be close to your customers/suppliers 24/7/365 regardless of the geographical location of the actors. Internet is only an interface, where flesh and blood face2face interaction never will occur. Morten Rask 8 4

5 Evolution of Web-based International Marketing Homepages Ordering and sales Sælger Sælger Sellers Køber Køber Buyers Homepages Customer service via web Morten Rask 9 About Evolution of Web-based International Marketing Longitudinal Study The Process From November 1996 until July : 1000 articles = 351 Companies. 165 of them used Web as a part of their International Activities. 43 of them were Danish 3 different interaction types emerged: Brochure, Manual, Shop The issue raised in this paper To understand international marketing on the Web as a learning process rather than technological issues Morten Rask

6 Scanima Homepage Morten Rask 11 Interaction types of homepages When using the Brochure strategy, the company aims to inform their potential customers about its strengths. The company expects the customer to pick up the message and hopes that the customer will contact the company. The internationalization of the company can be extended as information about the company is spread all over the World. When using the Manual strategy, the company tries to guide the customer in using the company's products and services. It is expected that the customer will experience great satisfaction with the company and its products and services. The internationalization process can be very resource demanding. The Web site relieves the pressure and thus allows the company to handle a more global presence without the customer feeling that the company is "far away". When using the Shop strategy, the company aims to persuade the customers to use (or buy) their products and services. The company will be globalized since the Web site of the company will be a global shop. This way the market possibilities do not depend on the geographical localization of the company. Morten Rask

7 Brochure Morten Rask 13 Manual Morten Rask

8 Shop Morten Rask 15 The coherence among the interaction types A Brochure D Brochure = A Manual = B and C Shop = D,E,F and G B E G Shop C Manual F Morten Rask

9 Web Strategies Interaction types Sources Rask, M., & Skræm (1997) Hoffman, Novak & Chatterjee (1995) Brochure Manual Shop Information Guidance Use the product Internet Presence Content Quelch & Klein (1996) Information Support Transactions Angehrn (1997) Virtual Information Space Virtual Communication Space Peters (1998) Internet presence sites Online storefronts Online Storefront Virtual Distribution and Transaction Space Geiger & Martin (1999) Ornamental Informational Relational Web Presence Zwick, Dholakia & Mundorf (2001) Communicative Trajectory Service and Support Trajectory Content sites Transactional Trajectory Morten Rask 17 Hoffman, D. L., Novak, T. P., & Chatterjee, P. (1995). Commercial Scenarios for the Web: Opportunities and Challenges. Internet Presence Content Online Storefront Action Expectation Result Flat ad, Image, and information Make it understood that that the firm is on the cutting edge Reach motivated customers Provide meaningful exposure Pay for and consume the content Demonstrate innovation and generate revenue Direct sales through an electronic channel Buy products Tremendous opportunities for customization and relationship marketing Morten Rask

10 Quelch, J. A., & Klein, L. R. (1996). The Internet and International Marketing Action Expectation Result Information Product information Reduce costs Support Customer service Facilitating incremental sales or increased margins Global Product Reach Transactions Goods and payment transactions Generate revenue Morten Rask 19 Angehrn, A. (1997). Designing Mature Internet Business Strategies: The ICDT Model Action Expectation Result Virtual Information Space Display companyproducts and service-related information Access companyproducts and service-related information Intregrate new channels and develop new forms of information exchange Virtual Communication Space Engage in relationship- ideaand opinion building activities Can communicate at high speed and low cost Bypass traditional physical and geographical constraints Virtual distribution and transaction space Digital products are distributed and exchange orders, invoices and payments Enhance the attractiveness of products and services and the easiness of buying it Morten Rask

11 Peters, L. (1998). The new interactive media: oneto-one, but who to whom? Action Expectation Internet Presence Sites Informs net users of the firm's offering Gets timely and relevant information Online Storefront Opportunity for customers to purchase directly from the firm Relationship building and reduced transaction cost Contents Customization of information-based products Customized products Reduce the Result Attractive option for number of Reduce the need marketspace intermediaries and uncertainty marketers more direct Morten Rask relationships 21 Geiger, S., & Martin, S. (1999). The Internet as a relationship marketing tool-some evidence from Irish companies Ornamental Informational Relational Action Expectation Formal presence Do not follow any concrete marketing objectives Additional information on a firm's products or services to potential and existing customers Keep their customers and prospects constantly up to date To build up and maintain relationships with a huge number of new and existing customers Customers entering into an ongoing dialogue with the firms A unique forum for URLs in traditional clients to marketing channels: Represent virtual communicate with be perceived as a Result company or product businesses and as company that keeps brochures adding real value abreast with the through tailor-made latest developments services Morten Rask

12 Zwick, D., Dholakia, N., & Mundorf, N. (2001). Evolution of E-Business Readiness: American and German Cases Communicative Service and Support Transactional Action Informing potential customers about the company's existence, its strengths, and offers Companies offer a manual to its customers Offer and sell the company's products and services Expectation Works like advertising online Reduces customer support costs dramatically, even more so in the global context Generate sales Result To connect with an international audience Morten Rask 23 Web Strategies for International expansion? Interaction types Sources Rask, M., & Skræm (1997) Hoffman, Novak & Chatterjee (1995) Brochure Manual Shop Information Guidance Use the product Internet Presence Content Quelch & Klein (1996) Information Support Transactions Angehrn (1997) Virtual Information Space Virtual Communication Space Peters (1998) Internet presence sites Online storefronts Online Storefront Virtual Distribution and Transaction Space Geiger & Martin (1999) Ornamental Informational Relational Web Presence Zwick, Dholakia & Mundorf (2001) Communicative Trajectory Service and Support Trajectory Content sites Transactional Trajectory Morten Rask

13 Interaction types Brochure Manual Shop Action Information Guidance Use of the product Expectation Customers acquire information Increase of customer satisfaction Customers use the company's product Result Increase the company recognition The company is not "far away" Geographical independent market opportunities Morten Rask 25 Business Implications Automation and Formalization Integration Evaluation Brochure Routine promotion in hypertext format Marketing/sales function Simple interaction analyses by statistical tools Manual Parts of the company's customer contact, except sales Marketing/sales coordinate the centers of competencies Comparison of customer inquiries, profiles and used resources plus CSA Shop Existing and new sales processes focusing on product descriptions and orders The whole company Actual sale combined with evaluation (as the two other interaction types) Morten Rask

14 Scanima Process 1. Background and starting point for the website a. Understanding of Scanima s products and resources b. Information searching in relation to country, competitors, customers and suppliers c. Scoping 2. Prototyping a. Reflection on observations of website use b. Website scenario generation 3. Invitation to tender for website a. Information searching in relation to suppliers of websites b. Interpretation and analysis of offers received against scenario 4. Creation and marketing of the website 5. Reflection on website use Morten Rask 27 The ''six natural troubles'' Scanima 1. Unclear communication strategy; 2. New communication paradigms; 3. Non-integrated marketing communication 4. Company involvement in the Internet challenge 5. People for Internet communication; and 6. Organizational change Morten Rask

15 Break Morten Rask 29 E-commerce defined Pure e-commerce Actors Digital Product (service) Physical Digital Physical Process Physical Digital Traditional commerce Morten Rask

16 Scanima s development Brick-and-mortar Major-click-and-minormortar Minor-click-and-majormortar Transformation processes Morten Rask 31 Transformation An act, process, or instance of transforming TRANSFORM implies a major change in form, nature, or function (WWWebster Dictionary) The process from being a brick-andmortar company to be a click-andmortar company Digitalization of products, actors and processes Morten Rask

17 Scanima s development Brick-and-mortar Major-click-and-minormortar Minor-click-and-majormortar Products Actors Processes Physical Customers and international agents Based upon faceto-face interaction Physical products with a digital representation Customers and digital agents Face-to-face interaction supplemented by digital interfaces Digital services and digital representation of physical products New customers because of digital agents Digital interfaces supplemented by face-toface interaction Transformation processes Morten Rask 33 F2F and Interfaces Internet makes is possible to be close to your customers/suppliers 24/7/365 regardless of the geographical location of the actors. Internet is only an interface, where flesh and blood face2face interaction never will occur Morten Rask

18 A trustworthy interface The confessional A place where a priest hears confessions a disclosure of one's sins in the sacrament of reconciliation Highly insensitive dialog Not F2F Morten Rask 35 Scanima s development Brick-and-mortar Major-click-and-minormortar Minor-click-and-majormortar Products Actors Processes International markets Physical Customers and international agents Based upon faceto-face interaction Limited by geographical borders Physical products with a digital representation Customers and digital agents Face-to-face interaction supplemented by digital interfaces A world without borders Digital services and digital representation of physical products New customers because of digital agents Digital interfaces supplemented by face-toface interaction A virtual world with nongeographical borders Transformation processes Morten Rask

19 Distances Slevin (2000) notes that globalization is to taking action across distances. Castells (1996, p. 470) describe distances as The proportion of distance relates to the intensity and frequency of interaction between two social positions. The result of the shift from brick-and-mortar to click-and-mortar Morten Rask 37 Scanima s development Brick-and-mortar Major-click-and-minormortar Minor-click-and-majormortar Products Actors Processes International markets Distance handling Physical Customers and international agents Based upon faceto-face interaction Limited by geographical borders Sales people travel and participate in tradeshows Physical products with a digital representation Customers and digital agents Face-to-face interaction supplemented by digital interfaces A world without borders Fewer tradeshows and less traveling because of the webmaster Digital services and digital representation of physical products New customers because of digital agents Digital interfaces supplemented by face-toface interaction A virtual world with nongeographical borders E-business manager handles the distances with the help of the sales people Transformation processes Morten Rask

20 Distances and its related problems in global e-business Geographic location and time zones do not exist on the Internet One common language (English) and (internet) culture Management-styles in sense of organization structure and knowledge monopoly New information and communication Personal contact is preferred in many technologies situations The political-economical contexts constituted by the national state The Internet have no national boundaries Physical as time and space Geographic location is important for the transport and logistic industry and communication patterns consider time zones Psychological as differences in language and cultural background Not all speak English and have the same macro- and professional cultural background Law enforcement is handled successfully by the national state Morten Rask 39 Summary: Suggestions for impact on internationalization strategies Classical understanding: A company that is internationalizing moves from its home market to a geographically or psychically proximate market. Subsequently, it advances further and explores distant markets and at last may become a global company (Johanson & Vahlne, 1977). = An incremental process of global expansion = A learning process (experiences push the firm further) The Internet-based internationalization process How to come down from a global, all-encompassing position (represented by the first website) to a well-targeted, specific market position. = A decremental process of global expansion = A learning process (experiences push the firm further) Morten Rask

21 Nothing stays the same Not everything is changed The Four Lane Road (Edward Hopper) Morten Rask 41 3/12: Internationalization patterns Scanima s development Distances and its related problems in global e-business Minor-click-and-majormortamortar Major-click-and-minor- Brick-and-mortar Physical as time and space Digital services and Physical products with Products Physical Geographic digital representation of a location digital representation and time zones do Geographic location is important for the not exist on the Internet physical products transport and logistic industry and Customers and Customers and digital New customers communication because patterns consider time Actors international agents of digital agents zones agents Psychological Face-to-face as differences in language and cultural background Digital interfaces Based upon faceto-face interaction One common supplemented language (English) by and Not all speak English and have the same interaction Processes supplemented by face-toface interaction (internet) culture digital interfaces macro- and professional cultural Limited by background International A world without A virtual world with nongeographical borders geographical Management-styles markets in sense borders of organization structure and knowledge borders monopoly Sales people New information E-business manager Fewer and tradeshows communication and Personal contact is preferred in many Distance travel and technologies handles the distances less traveling because handling participate in situations with the help of the sales of the webmaster tradeshows r The political-economical contexts peopleconstituted by the national state Internettet have no national boundaries Law enforcement is handled successfully Transformation processes by the national state Morten Rask 38 Morten Rask 39 Negroponte (1995) claims that firms with digital products, processes and relations do not care about distances anymore. Morten Rask

22 8/12: E-markets Distances and its related problems in global e-business Geographic location and time zones do not exist on the Internet Psychological as differences in language and cultural background One common language (English) and Not all speak English and have the same (internet) culture macro- and professional cultural background Buyer Management-styles in sense of organization structure and knowledge monopoly New information and communication technologies Physical as time and space Geographic location is important for the transport and logistic industry and communication patterns consider time zones Personal contact is preferred in many situations The political-economical contexts constituted by the national state Seller Internettet have no national boundaries Law enforcement is handled successfully by the national state Morten Rask 39 Brochure/Manual Internet supports almost all trade processes Information seeking and evaluation Negotiation E-markets Company Homepage Shop Sales and monitoring Manual Distance service Near service Human Beings Morten Rask 5 Morten Rask 43 10/12: Internet and competitive advantages Distances and its related problems in global e-business Geographic location and time zones do not exist on the Internet Psychological as differences in language and cultural background One common language (English) and (internet) culture background Management-styles in sense of organization structure and knowledge Buyer monopoly New information and communication technologies Physical as time and space Geographic location is important for the transport and logistic industry and communication patterns consider time zones Not all speak English and have the same macro- and professional cultural Personal contact is preferred in many situations The political-economical contexts constituted by the national state Internettet have no national boundaries Law enforcement is handled successfully Seller by the national state Morten Rask 39 Internet supports almost all trade processes Information seeking and evaluation Negotiation E-markets Company Homepage Sales and monitoring Distance service Near service Brochure/Manual Shop Manual Human Beings Morten Rask 5 Morten Rask