Topic 4: Development of
eBusiness Strategies

Every business organisation operates within two concentric layers of environment — the internal environment (shared values, strategy, structure, staff, skills, systems, and style) and the external environment (customers, competitors, suppliers, government, regulatory agencies, financial institutions, business partners, interest groups, outsourced companies, dealers, and market forces). These two layers continuously interact, pushing forces inward and outward. For an organisation to survive and grow, it must sense and respond to changes arising from all four major categories of driving forces.

The E-Business Road Map plots an organisation's journey along two axes: Process Sophistication (vertical) and progress across time (horizontal). The vertical axis splits into External Processes (facing customers, suppliers, partners) and Internal Processes (within the organisation). As sophistication grows on both axes simultaneously, the organisation evolves through the following stages:

• Basic Website: The organisation registers a domain and hosts a "brochure-ware" site with an ISP. Contains static information — company profile, product catalogue, FAQs, and e-mailing lists. No interactivity.
• Interactive Site: A dynamic site enabling two-way information flow. Includes news forums, chat areas, feedback forms, and structured query answering. Requires a web server, database, scripting languages, and a dedicated high-speed connection.
• E-Commerce Site: Financial transactions become possible via a secure web server or payment gateway. Supporting back-end systems, international security standards (SSL, PCI-DSS), and Business Contingency Planning must be in place. Trust relationships and security are critical concerns.

• Effective Individual: Employees use standalone productivity tools — accounting packages, payroll software, spreadsheets, word processors — possibly connected to the internet via email. Goal: making each user own and control their own processes.
• Effective Team: A LAN connects functional units (accounting, production). Staff collaborate using networked applications, email, and intranet. Shared I/O devices, drive space, and databases enhance team productivity.
• Effective Organisation: All computers are networked enterprise-wide. ERP, VPN, and Intranet integrate purchasing, manufacturing, sales, and accounting. Strict security and password protection ensure data integrity.

When both external and internal process tracks reach sufficient maturity, Convergence occurs — the organisation integrates its corporate data repository with all internal departments (Finance, HR, Production, Marketing, Purchasing) and all external channels (interactive website, links to suppliers and distributors). This unified data architecture enables New Processes:

Customer disruption occurs when shifts in customers' needs, preferences, or behaviours significantly alter a business or industry — often bypassing traditional sales and distribution channels to deal directly with consumers. It is not driven by a new technology per se, but by a fundamental change in how customers choose to interact with businesses.

Businesses respond by developing channel strategies — for instance, Mattel created a proprietary "Build Your Own Barbie" product exclusively for direct online sales, while leaving the standard doll line to established retailers, thereby avoiding channel conflict.

Product disruption occurs when a new product or technology renders existing products or markets obsolete by offering superior performance, convenience, or cost-effectiveness. This is often linked to digitisation — converting physical formats to digital equivalents (product substitution or service substitution).

Price disruption refers to a situation where a product or service is offered at a significantly lower price than the prevailing market rate, causing a major market share shift or a price war. It arises from new entrants with lower cost structures, increased competition, or technology-driven production efficiencies that undercut incumbents.

• Dynamic / Real-Time Pricing (e.g. Accompany's Buy-Cycle): Web displays update prices in real time based on the number of committed buyers. The price falls as more buyers join a purchase cycle — incentivising buyers to recruit friends via a network marketing feature. This "quantity discount" model creates community-driven demand aggregation.
• Name-Your-Own-Price (e.g. Priceline.com): Priceline empowered buyers to state the price they were willing to pay for airline tickets, hotel rooms, car rentals, and mortgages. Sellers accepted or rejected bids. This model shifted pricing power from seller to buyer, establishing a "pure market price" and directly challenging conventional fixed-price retail.
• Below-Cost / Advertisement-Funded Pricing (e.g. buy.com): Products are sold at lower-than-cost prices, with profit generated entirely through advertising revenue. This model "destroys" traditional pricing models in retail — forcing competitors to either match prices (at a loss) or exit the category.

Intelligent agents are computer programs or software applications capable of performing tasks autonomously or semi-autonomously, with a degree of intelligence and decision-making ability. They are designed to interact with their environment and make decisions based on rules, algorithms, or machine learning models — without requiring explicit human intervention for each decision.

• Reactive Agents: The simplest form — respond only to the current state of the environment with no memory or learning capability. Example: a basic chatbot that returns a fixed FAQ response based on keyword matching.
• Proactive Agents: Capable of anticipating future events and acting accordingly. They have memory and can make decisions based on past experiences. Example: a news aggregator that pre-fetches content predicted to be relevant to a user based on prior reading patterns.
• Learning Agents: Improve performance over time through machine learning. They adapt their behaviour based on new data. Example: Netflix's recommendation engine, which continuously refines suggestions based on viewing history, ratings, and user comparisons.
• Intelligent Software Agents: Designed to interact with users or other software systems to perform specific complex tasks autonomously. Examples range from personal digital assistants (Siri, Alexa) to autonomous web crawlers.