E-commerce fundamentals lastminute.com – an
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Mini Case Study 2.1
Professor Donald N. Sull is an Associate Professor of Management Practice on the Strategy and International Management faculty at the London Business School.
In the first video tutorial, ‘Fog of the Future’ on strategic agility visit www.ft.commultimedia and search for ‘London Business School’, he asserts that traditional management models of creating a long-term vision
are flawed since our knowledge of the future is always imperfect and marketplace conditions are changing continuously. Rather than being the captain of a ship surveying the far horizon, analogous with the top-down
model of strategy, the reality for managers is that their situation is more akin to that of a racing car driver on a foggy day, constantly looking to take the right decisions based on the mass of information about their
surroundings coming through the fog. He believes that having a clear long-term vision, particularly where it isn’t based on environment analysis isn’t practical in most industries. Instead he says that companies should
‘keep vision fuzzy but current priorities clear’. He gives the example of the failure of Microsoft to respond sufficiently fast to the growth of the Internet.
In a second video tutorial, ‘Strategic Agility’, he explains the basis for strategic agility. He explains that all knowledge of the future is based on uncertainty, but that managers must act now so they need to put in place
US Marine Corps-style reconnaissance missions as an army would in order to make their battle plans. He gives the example of Dell, explaining how they spend relatively little on research and development, but are instead
constantly probing the marketplace, trialling new ideas with multiple probes into the approach. He stresses the importance of finding anomalies in the marketplace where it doesn’t appear as expected and these may repre-
sent learnings or opportunities. Detailed customer insights and business performance are necessary to iden-
The Marine Corps demonstrates strategic agility
Part 1 Introduction
Figure 2.2
Professor Donald Sull of London Business School talks about strategic agility
Source: www.ft.com
Now complete Activity 2.1 to review the importance of these environmental influences.
Online marketplace analysis
Analysis of the online marketplace or ‘marketspace’ is a key part of developing a long-term e-business plan or creating a shorter-term digital marketing campaign. Completing a mar-
ketplace analysis helps to define the main types of online presence that are part of a ‘click ecosystem’ which describes the consumer behaviour Chapter 9 or flow of online visitors
between search engines, media sites and other intermediaries to an organization and its competitors. Prospects and customers in an online marketplace will naturally turn to search
engines to find products, services, brands and entertainment. Search engines act as a distri- bution system which connects searchers to different intermediary sites for different phrases,
so the flow of visits between sites must be understood by the marketer in their sector.
To help understand and summarize the online linkages between online businesses and traffic flows it is worthwhile to produce an online marketplace map as shown in Figure 2.3.
This shows the relative importance of different online intermediaries in the marketplace and the flow of clicks between your different customer segments, your company sites and dif-
ferent competitors via the intermediaries.
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tify these anomalies. Finally, he makes the point of the need to act rapidly to have scalability to ‘swarm the gap in the defences of the enemy’ where there is a strong opportunity.
In an e-business context, we can see that strategic agility requires these characteristics and requirements for an organization to be successful in its strategy development:
1. Efficient collection, dissemination and evaluation of different information sources from the micro- and macro-environment.
2. Effective process for generating and reviewing the relevance of new strategies based on creating new value for customers.
3. Efficient research into potential customer value against the business value generated. 4. Efficient implementation of prototypes of new functionality to deliver customer value.
5. Efficient measurement and review of results from prototypes to revise further to improve proposition or to end trial.