According to Nicholls and Watson (2005), many organisations are developing a better understanding and importance of strategic thinking and how it can lead to development of successful online trading. In the past, companies have been accused of a lack of strategic planning, which was ultimately said to be cause of online failures (Porter, 2001). E-strategy has been discussed at various levels from business re-engineering, new approaches to marketing planning to analysing and measuring specifics of web-based activities.
From a strategic planning perspective, Teo and Pian (2003) found that the level of internet adoption has a significant positive relationship with an organisation’s capacity to develop competitive advantage.
The implications are that organisations should seriously consider how to develop maximum capacity to benefit from the online trading environment. Organisations that hesitate are likely to be superseded by existing or new competitors.
While in the current climate this sounds obvious, the business potential that can be derived from adopting internet technologies is not always immediately clear. This situation helps to reinforce the importance of digital marketing planning as it can help to ensure that organisations reduce the risk of losing their competitive edge by missing out on the benefits of new technology.
On the plus side, there are increasing opportunities to benefit from innovation, growth, cost reduction, alliance and differentiation advantages through planned adoption and development of internet and digital technologies as more trading partners become part of the digital marketplace.
According to Nicholls and Watson (2005), in order to develop an online strategy it is critically important to use Internet technologies effectively and it is also vital to analyse the operational situation. Furthermore, it is important to assess the degree to which the offline and online management infrastructure, marketing and logistics functions are integrated.
Model of e-value creation key areas, which affect strategy development: the organisation’s core strategic objectives, its business characteristics, internal resources and competences. Different objectives need to be supported by different organisational structures and marketing strategies – e.g. greater cost reduction is likely to be achieved if technologies are integrated throughout the organisation.
The characteristics of the organisation are likely to have a significant impact in internet strategies – e.g. small companies will have to consider carefully how to resource a fully transactional website and handle the logistics.
Currently, a good deal of emphasis is placed on the supply-side of e-commerce strategies. Streamlining of procurement systems through the use of internet technologies can make significant cost reductions, which can produce cost saving, managerial efficiencies in the purchasing function and financial benefits.
Chaffey, D. and Ellis-Chadwick, F., 2012. Digital marketing: strategy, implementation and practice (Vol. 5). Harlow: Pearson.