How E-Business Is Helping Enterprises Compete

Executive summary

The paper is an analysis of two organisations that adopted e business strategies. The first is an SME known as Vitalograph. Before the e strategy, this company was wasting valuable time and resources on offering its distributors and consumers technical support. However, after creation of a new website and an electronic order system, its distributors could now inform the company about their order prior to its creation, consumers could access vital product information on product use and the company’s personnel could dedicate their time to improvement of the R&D function.

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The second company is a large enterprise known as General electric. Prior to the strategy, the company’s operations were poorly streamlined and it needed to coordinate its diverse portfolio. It also needed to improve its customer relations. After installation of new software and data management systems, the company could now harmonise its data content; it was revitalised as consumers got more options for doing business with them.

Introduction

In today’s cut throat corporate arena companies must harness all the resources that can give them a competitive edge. In this regard, e-business has proven to be an invaluable tool. Small, medium as well as large organisations all have the opportunity to improve customer relations, enhance their supply chain through procurement capabilities, improve production processes and promote communication amongst themselves through e business. The paper shall look at how the later objectives can be achieved and the challenges/ opportunities entailed in e business.

Case study of Vitalograph

The Company chosen for analysis is Vitalograph Ltd. This is a medical devices manufacturer and distributor. Its headquarters are located at Milton Keynes, United Kingdom and it employs a total of 170 workers. (Alert data, 2009).

In order to understand how e business transformed this organisation, it is critical to examine its situation before commencement of this strategy through a SWOT analysis. The main strength of this organisation lay in the fact that it was an SME and could therefore adapt to a fast changing environment relatively quickly. (Inews.com, 2001) Aside from that, the company was a market leader and had established itself as force to reckon with in its industry. On top of these, the company already had well established distribution channels that prevented it from employing too many resources in the process of marketing their products.

However, its major weakness was that its employees lacked a suitable avenue for providing consumer support. (Commission of the European communities, 2001) Most of the staff members were not in a position to locate information that distributors wanted to know about consumers or consumers about themselves unless they accessed an internal MS access database. The major disadvantage with this approach was that consumers themselves could not already determine whether other potential or actual buyers had already asked their question. (Schwalm, 2004) Besides that, the task of collecting all these inquiries was allocated to one person who was overburdened. Also, distributors were not in a position of knowing the company’s stock capacity. This was causing lots of delays thus making the company undergo huge losses. (Nguyen, 2004)Prior to the strategy, the company would create several products by analysing stock orders for the previous year. Consequently, the company would dedicate a substantial amount of time in making units that were not needed by their distributors. If there was a way that its distributors could place their orders online, then the company could focus on making only the required number and this would save a lot of operating costs as well as valuable time that could be channelled to improving the products’ quality. (Hawkins, 2005) Also, the company did not possess a website that could communicate to consumers about what the company was all about.

One of the most obvious opportunities for this company lay in the adoption of an e business strategy. The strategy should incorporate an electronic data collection and storage system that would allow quick storage of information after consumer inquiries. (Cohan, 2001)The company was facing the threat of being redundant in the medical devices industry since this area usually requires substantial investment in research and development. It could no longer grow this section because its research and development staff were busy offering technical support to consumers and distributors. The company was still doing things in an old fashioned manner. (Barrs, 2009) In other words, there was too much paperwork that had to be done in the organisation yet its competitors has already gone digital.

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Strengths
-Flexible to their environment
-respected in industry
-well established distribution channels
Weaknesses
-low consumer interaction
-poor supply chain coordination
Opportunities
-e business for customer relationship management
-e business for supply chain
Threats
-competitors focus on R&D
-old fashioned and inefficient operations

Given all these challenges, it became necessary for the company to embark on an e business strategy that was designed to achieve the following goals: create a new website with valuable information for the consumer such as technical data and equipment comparisons. The company also wanted to include a section where it could offer technical support such as through legal information, user manuals as well as reference guidelines.

These changes created a lot of improvement in the way the company operated. The latter shall be analysed through a TOWS analysis. First of all, the major threat to the success of this business strategy was the attitude of the company’s employees with regard to the new technology. (Krug, 2006) Since it is human to resist change the company found that a substantial number of its employees were slow to carry out their functions in project implementation. It can leverage this by offering them more training on the system.

On the other hand, there were also tremendous opportunities for the company after implementation of this strategy. For instance it could leverage the knowledge existent within its institution in order to make it appropriate use of its electronic media. On top of that, more and more training is needed in order to make the strategy fully beneficial. (Li , 2006) The company is also in need of using this system for generating repeat sales hence growing its revenue. This can be done by continually studying customer preferences such that the medical device manufacturer is in tune with what the consumers require.

The major weaknesses of the strategy occurred during implementation of the program. Staff members had assumed that creation of the web contents would be a reserve for IT staff alone and they therefore failed to dedicate time for their own input. In the end, the project took much longer than had been anticipated. Aside from that, it also became prevalent that there was an excess of manpower that was needed in order to get the team moving. Once again this denoted the need to have used more manpower for their work.

There were so many strengths in the company’s e business strategy. First of all, it was not in a position to offer its distributors as well as its consumers up to date information on its products. (Cohan, 2001) Beside that, the consumers and distributors no longer had to wait for brochures through their email as this is now available on the company website. The company can therefore save precious time and resources spent on emailing those brochures. Consumers and distributors need not make face to face arrangements to meet Vitalograph staff for inquiries as they can easily access that information online. Also, the company has improved its research and development function because now employees are dedicating more of their time in dealing with this function than in offering consumers technical support. The company is also likely to realise cost savings in the future as its operations have become more efficient.

External opportunities (O)
-keep up with recent IT trends
-leverage knowledge
-study consumer preferences
External threats (T)
-poor IT knowledge by employees
Internal strengths (S)
-Management support
– greater cost savings in the future
-better R&D
-time and resource savings
SO
-Use training to keep up with e- business trends
-Harness new knowledge bases by being flexible
ST
-educate staff on their role in the strategy
Internal weaknesses (W)
-Minimal staff
– e business strategy needs time
WO
-plan for new developments before hand
WT
-revise business projections in order to incorporate adjustment to technology

Case study analysis of General Electric

The second company chosen for analysis is known as General Electric. This is a large multinational operating in several countries around the world; however, it is headquartered in New York. (Fortune, 2006) It was started as far back as 1892 but now boasts of an employee base of about three hundred and twenty three thousand (one of the largest employers in the world). (US Securities and exchange commission, 2009) It is both a product and service provider with five divisions. The company generates, transmits and distributes electricity, it offers financial services, it deals with technology solutions through aerospace and aviation offerings and business intelligence is another area of expertise. It has also ventured into entertainment through a company known as NBC universal. (GE, 2009)

General Electric is a giant organisation and critically needed to leverage its business operations in order for it not become redundant within its respective industry. It was necessary to go the e- business way. The following is a summary of the company’s situation prior to adoption of an e-business strategy

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Its major strengths lay in the fact that it was global in nature. Consequently, it possessed the capacity to quickly and effectively harness the best raw materials, joint venture partners, material components etc from the international arena and this definitely gave it an edge over its competitors. (Roberti, 2001) Also, the company places service and product improvement at the heart of its business strategies especially through its well known six sigma strategy. (Kalatoka & Robinson, 2003)

On the other hand, the company also had some weaknesses that necessitated e business. First of all, it was (and still is) in the process of changing from a product to a service provider. This process requires immense coordination, planning and training and some of these qualities were lacking in the company. Process streamlining was also a bit murky in the company before adopting e business.

Its major opportunity lay in an ebusiness strategy that would boost productivity and hence translate to increased profitability. (Kid, 2001) It also needed to be more flexible in that it needed to change its game plan based on what its competitors were doing. (ICMR, 2009) Studies had shown that other similar companies had already adopted e business strategies and the company stood to benefit as well if it did the same. Consumer trends were rapidly changing and the company needed to keep abreast of these.

Its major threat was being outpaced by other electricity, technology, entertainment and financial service providers who had embraced modern ways of doing business such as through e business. (Andreani, 2008) It was also faced with the danger of operating beyond its production capacity due to high costs. Shown below is a SWOT matrix of the company prior to implementation of the strategy:

Strengths
-Global operations
-Effective quality management
Opportunities
-E business to improve customer service
-flexibility in adjusting to consumer trends
Weaknesses
-diverse business portfolio –needs coordination
-process streamlining
Threats
-high operating costs
-outpaced by competitors

The company therefore embarked on an e business strategy in 2000 and 2001 where it focused on the following problems: improving customer service delivery, reducing production costs, integrating a diverse business portfolio and minimising time wastage. The TOWS analysis is very effective in understanding how this company changed after adopting an e business strategy.

Its major threat is with regard to poor employee response to the technology especially when some of them do not know how to maximise the benefits of such systems in their operations. Also, its competitors might copy its e business plan. (Lang et al, 2009)

Opportunities for the company after the program included making the company’s top stakeholders understand that there were some risks with e business and that it may not yield immediate results the way the company would like it to. The company now had a new vision where there were immense possibilities that could emanate out of it because of those changes. The company now possesses the capacity to connect with other businesses that rely on it. It also holds within its grasp an ability to enhance consumer loyalty by first educating them on these IT technologies. It can also make strategic alliances with other companies that share the same vision.

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Weaknesses prevalent in the organisation after the program were: getting all its three hundred thousand plus employees on the same page with regard to the new technologies. Some of them were not sure about where they needed to be with regard to the operations. Aside from that, the company was still assessing its return on investments for this process through the usual input and output approaches yet the IT changes do not translate into profits immediately. (Langford et al, 2000)

The company’s strengths after e business included the fact that it chose the most suitable emergent technologies for its businesses. This implied that it could now effectively coordinate its business portfolio. Also, it has recorded marked improvement in the way it manages its data content. This has improved efficiency and e business is no longer considered just another initiative within this company. The company has now become revitalised as e business has been leveraged into the company’s customer service offerings, its online auctions and in production such as through turbine monitoring. Shown below is a summary of these issues in the TOWS matrix:

External opportunities (O)
-Strategic alliances with other e business minded companies
-connect with business consumers
-convince top administrators on risks
External threats (T)
-poor consumer response
Internal strengths (S)
-coordinates business portfolio
-improved customer service
-revitalised organisation
-Garner support from top management by explaining risks -train employees on benefits
Internal weaknesses (W)
-low employee commitment
-poor analysis of ROI
-Implement new e business analysis techniques- do not focus on sales figures only -sue public relations channels to tell the pubic about e business
-train the public

Conclusion

E business can realistically improve business operations and competiveness as seen through the case studies. GE and Vitalograph differ from each other in terms of the e business strategy because at GE the strategy was mostly internal especially with regard to the data content while in Vitalograph, it was established for consumer and distributor support. On the other hand, some benefits were common to both companies such as streamlining operations and improving their customer relations.

References

Alert data, 2009. Company report for Vitalograph – Summary of e business position. Web.

Andreani, B., 2008. ICT and e business trends. Web. 

Barrs, P., 2009. Home business success keys. NY: Addison Wiley.

Cohan, P., 2001. High profit strategies for capturing the ecommerce edge. London: McMillan.

Commission of the European communities, 2001. Helping SME’s go digital. COM report 136.

E-business watch, 2006. Food and beverages trends. Web.

Fortune, 2006. America’s most admired companies; their sources of competitive advantage Fortune Magazine. Web. 

Hawkins, K., 2005. Virtual e –business. NY: Pearson publishers ICMR, 2009.The GE way on e business. Web.

Inews.com, 2001. Helping SME’s drive e-business. Web.

Kalatoka, R. & Robinson, M., 2003. Digitization at General Electric. NY: Addison Wesley.

Kid, P., 2001. E business strategy – benefits and implementation. Web.

Krug, S., 2006. Common sense approaches to web usability. Chicago: Wiley and sons.

Lang, J., Efraim, T. & King, D., 2009. Introduction to e commerce. NY: Prentice Hall.

Langford, C. & Newman, D. & Palmer, C., 2000. Can a dinosaur compete in the e world? Web.

Li , F., 2006. What is e business? NY: Pearson publishers

Nguyen, 2004. Milk the web. NY: Routledge

Roberti, M., 2001. GE ‘s Spin machine. Web.

Schwalm, A., 2004. The complete e business resource guide. Oxford: oxford University Press

US Securities and Exchange Commission, 2009. GE company information and e commerce. Web. 

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