1. E commerce and strategic
implication

2. 1. Differentiation- mass customization strategies,
producing large numbers (mass) of customized
items, to differentiate their products and services.
Musicmaker.com, Dell

3. 2. Cost Leadership
• reduction in overhead such as: inventory, retail
space, and personnel.
• paper processing eliminated.
• Lower distribution costs, information flows are
simplified or redefined that result in further
cost savings.
• Cost reduction means broader customer base.

4. 3. Growth strategies
Internet can be useful in product development,
market development, diversification, market
penetration
Amazon.com,

5. Market development strategy
(Existing product- new market)
Use of internet for
Targeting new geographic markets
New customer segment

6. Market Penetration strategy
existing product existing market
Use Internet for:
• Market share growth – compete more
effectively online
• Customer loyalty improvement -
• Customer value improvement – increase
customer profitability by decreasing
cost to serve and increase purchase or
usage frequency and quantity

7. Diversification strategies
New products new markets
Using the Internet to support:
• Diversification into related businesses.(food
specialities ltd)
• Diversification into unrelated businesses
(wipro)
• Upstream integration (with suppliers)
• integration

8. Product development strategies
(New products existing markets)
Use Internet for:
Identifying new customer needs
Tailoring and designing new products
accordingly
Communicating and promoting products
Distributing them using internet
Example Sony