MIS 571: E-Commerce: Business Uses of the Internet
University of Illinois - Springfield
Instructor: Rassule Hadidi
Student: Marty Timm
Topic: Business Plans for Web-based Businesses
Bertsch, Thomas, James Busbin and Newell Wright, “Gaining Competitive Advantage in
E-tailing through Marketing Management and Value-Added Uses of
Technology”, Competitiveness Review, Volume 12, Number 2, pages 49-56
In the first article, the content and format involved in creation of a business plan were discussed. That article assumed that the business plan writer would have a fairly good background in analysis and be capable of quantifying various aspects of the business based on available material.
However, all business plan writers do not have as strong a set of these assets to draw upon as they might like. Should they need to explore further, they might dig into business areas that have established principles and attempt to apply practical concepts to strategic management of the e-business.
The authors of this article contend that many “e-tailers” – retailers operating as e-businesses – fail for either one or a combination of the following reasons. Firstly – because they do not take advantage of their enterprise’s technology-enabled customer benefits in combination with other customer benefits they provide. Secondly – they neglect to apply the marketing management paradigm to administration of the e-business.
As a remedy for this situation, these authors suggest a framework for applying the principles and practices of marketing management in order to achieve e-business success.
Their article discusses eight marketing management subject areas to which e-businesses need to give attention: plans – prioritized statements of quantifiable corporate objectives and the strategies for goal achievement, providers – the suppliers of the resources needed to run the business and best practices for utilizing them, access – the facilitated means by which customers interact with the business, distribution – methods used by the business to disseminate its product as well as information about the business itself, markets – definable groups of potential customers and the tactics used to attract them and build relationships with them, products – the beneficial and distinguishing mix of products and services offered by the business, prices – the competitive use of pricing in the marketing strategy, and promotions – using incentives relevant to customer motives and needs to build a positive impression of the organization.
Throughout, the authors provide suggestions for relating marketing management concepts to the e-business context. They also attempt to indicate means by which unique features of the e-business can be used to implement the marketing strategy.
The executive summary of the article by Bertsch, Busbin and Wright begins with this remark: “Experts cite the lack of a sound business plan and a diminished regard for basic marketing and management practices as major reasons for the failure rate of Web-based retailers.” Their focus is on the marketing management area however and it is mostly the reader’s job to relate the content of their article to the general business administration issues.
This is not necessarily a weakness of their article.
Articles like this must focus on specific areas of business management in order to provide any meaningful depth. And as this one does, they should relate discussion of the selected area to the wider issues that business planners must consider.
In this article, the authors do manage to relate marketing management principles to the wider organizational issues as they deal with prioritization of strategies and the need to make responsible use of available resources. Centering attention on marketing management is also practical since it allows them to bring customer-oriented issues into the spotlight.
On the other hand, the authors’ focus on “e-tailers” is not entirely necessary since the majority of what they propose is relevant to any organization doing business on the Web.
Many failed e-businesses started out as uses of the Web in search of a market. However, it is an accepted notion that businesses do better when they work as responses to known customer needs. Looking at ideas for potential businesses and analyzing them in light of marketing management principles can help to improve these ideas. Business planning can benefit from this approach.
Business plans are about proposing and explaining ideas – much of which relates to the marketing of these ideas: why they meet the needs of a market, how the business behind those ideas will be organized, how the business will work in the face of competitive risks, how effective they will be in leading to profits, etc.
This particular article is definitely worth recommending. It is well researched, skillfully written and – most importantly – it speaks to a definite need in the e-business world – the need for practical, applied managerial information.
Many have considered naiveté, hubris and any number of other faults when attempting to explain the too-frequent lack of realistic planning by e-businesses. For whatever reason, e-businesses failed to ground themselves in traditional business principles. It is certainly time to correct those errors.
Articles like this one can help to fill the gap. Hopefully they will reach the audience that needs the information they provide.
Whenever businesses fail, many people lose. Planning can help to avert these losses – by preventing the realization of ideas that are certain to fail, by helping to improve mediocre ideas that need examination and clarification, or by fully defining the strategies that characterize an authentic winner.