Unit 3 Text BTen imperatives for e-business success (Part II)7. Play by the “new” rules. Partly because they are in their infancy, e-business in general, and e-commerce in particular, operate under new rules. Recent dot-com start-ups must build market share quickly to compete with traditional business in the same market niche. To gain market share, they will go to great lengths. This might include very high expenditures on advertising, deeply discounted prices and other approaches that lead to net losses in the short term. Establishing market share is critical to the long-term survival of such enterprises. Late entrants or traditional companies that attempt to build an internet presence must play the game with an understanding of the new rules. Even a traditional enterprise with an established brand identity that sells product on the web at prices higher than the deeply discounted raters of the dot-com enterprises will fail. Such a strategy plays right into the hands of the dot-com businesses by reinforcing the image of the traditional company as an inefficient, high-price alternative in the new economy. Traditional enterprises entering the market must be prepared to sell at the same deeply discounted prices as the new entrants, or they should not create a web identity. 8. Enhance or destroy distribution channels based on their true power and value. One of the much-heralded promises of the Internet was reduced cost through disinter mediation. While possible in theory, the promise was clearly oversold. In some cases, enterprises have used over inflated estimates of e-business revenue to justify creating channel conflict that actually resulted in lost revenue. It has been all too common for manufacture e-business initiatives to alienate their distributors. It is critical that realistic estimates of e-business revenue over time be used in the planning process. However, it is equally important to recognize when e-business offers a much more effective distribution channel than any currently in existence. Selecting the proper strategy requires realistic and quantitative estimates of revenue from new and existing distribution channels. Estimates of each new and existing channel is power and value to an enterprise should be used to determine the channels effectiveness and the potential future it will have for the particular enterprise. Enterprises should then use these estimates to position the channel in the proper quadrant on a channel effectiveness chart.9. Establish a metrics program that measures the true effectiveness of the e-business initiative. “if you build it,” “they will come” is a line from an American movie that is often used to describe a “blind faith” approach to e-business development. This approach usually involves building a web site to sell products to the end user because “it is the right thing to do.” The approach normally does not include a measurement program. In many cases, even the units of measure have not been defined. Measuring the effectiveness of an e-business initiative will almost certainly involve new metrics, but some of the metrics that measure the effectiveness of the overall business process may be the same metrics that have been used historically. New metrics such as “stickiness” may be specific to e-business and web sites. Existing metrics such as market share may be applied specifically to e-business initiatives. However, as the recent drop in the valuation of dot-com enterprises has shown, traditional measures such as net income and earnings per share cannot be ignored.Just as it is important to integrate the e-business strategy into the overall business strategy, it is equally important to integrate business measures. The metrics used must measure progress toward the achievement of the strategic business objectives. They must also capture the interaction between e-business and traditional distribution channels. For example, an intelligent design might involve sending prospects to a brick-and-mortar store from the web site when “touch and feel” is needed. Signs and personnel in the store might send a prospect to the web site for information-intensive needs. In such a design, each distribution channel affects the success of the other. Without metrics measuring both, the effectiveness of e-business initiatives cannot be determined. Information from disparate performance measurement systems must be combined to provide an overall picture.10. Speed and ruthless execution are everything. E-business places greater speed and efficiency demands on enterprise infrastructure than anything previously encountered. Because the business environment and the competitive landscape can change so quickly, it is imperative that e-business initiatives be implemented quickly. Red tape must be cut. Bureaucracy that impedes the progress of e-business initiatives must be bypassed or crushed. The manager responsible for the e-business initiative must have wide latitude and authori