Social Commerce Plan (3000 word)

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Presented by: Dr Paul Yeow

Social Commerce Strategic Planning

Taken from

Chapter 10: Social Commerce (Turban et al. 2016) and

Chapter 13: Electronic Commerce – A Managerial and Social Network Perspectice (Turban et al. 2015)

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Why study SC strategy

• Before we study social commerce models, we need to understand how SC Strategy is developed (in which the models fit).
• Learning Outcomes
• 2. identify, analyse and critically assess the suitability of various social commerce models and strategies for various e-businesses

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Key Concepts

Definition & importance of SC strategy

Strategy Initiation

Strategy Formulation

SC Implementation

SC Strategy Assessment & Performance Management

Note: These are addressed according to sequence

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Need for Strategy

Strategy—Broad-based formula for how a business going to compete. It consists of goals & set of plans to achieve them.

Social Commerce strategy (SC strategy)

The formulation and execution of a vision (an idea) of how to do business using social media tools.

Why does a company need an SC strategy?

• Fast changes in business- opportunities & threats can change quickly. 5 years close down w/o SC
• May be too costly not to have one

What do you think of the opportunities for SC?

Particularly of Social Customers in which ½ of the population are below 30.

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Opportunities

• Consumers can provide feedback on product (service) design
• Vendors get free word-of-mouth marketing
• Increased website traffic, which increases revenue and sales (Starbuck & Netflix case studies)
• See http://barnraisersllc.com/2010/10/33-case-studies-prove-social-media-roi/

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The Strategy-Performance Cycle

• SC Strategy involves

Create goals and objectives that express the organizational mission

Create the strategy and make plans to attain the goals and objectives

Implement, set performance metrics and monitor the performance, then analyze the difference between the two

Develop a corrective strategy

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Figure 10.1 The Strategy-Performance Model

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eB Strategy Alignment

Strategy of entire org.

SC Strategy

Functional Strategy

(Marketing)

Objectives

SC Models/Strategy

Implementation Plan

Performance Measures

SC strategy must be aligned to organization’s business, mktg & IT strategy.

Business Plan

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The SC Strategic Planning Process

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Step 1: Strategy Initiation

Organization examines itself and its environment to determines SC opportunities and goals

• First step is to review the micro & macro business environment.
• Company Analysis: company vision, mission, value proposition, goals, core competencies, strengths, weaknesses, customers, target market, partners, etc.
• Industry Analysis: which industry, who are the competitors, what current practices of selling & buying, what SC strategies are used, competitors’ performance, etc.
• Competitive Analysis: Compare company with competitors: SWOT analysis.

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Business Environment

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Figure 10.2 Porter’s Five Forces Model

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SWOT Diagram

https://www.youtube.com/watch?v=EIzNF0gl_bQ

Which category is Voov partnering with Namewee to have a competition?

Company Analysis

Industry & Porter’s Analysis

Weakness Opportunity

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Specific outcomes from the strategy initiation phase include:

• End results: A set of goals for SC (in which strategies/plans need to be developed):
• Company analysis (vision, business strategies, customers, etc.)
• Competitor & industry analysis
• Macro-environment analysis
• Porter’s Competitive Forces Model
• SWOT Analysis

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Marketing objectives & social media

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Examples of SC Goals

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Step 2: Strategy Formulation

• Strategy formulation

The development of strategies to exploit opportunities and manage threats in the business environment in light of corporate strengths and weaknesses

• Come out with Business Plans (SC Business Models) to achieve the goals (from Step 1). This includes a list of SC initiatives to be developed.

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Specific activities and outcomes from the strategy formulation phase include:

• Cost-benefit analysis – value proposition & ROI
• SC models (SC initiatives/apps/services, SN platform, activities, & technologies)
• Risk analysis, assessment, and management
• Business plan

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Cost-Benefit

• Need to provide economic feasibility of the identified opportunity.
• It is difficult to justify SC investment due to many intangible variables
• Methods used for analysis:
• Value analysis approach
• Tangible cost-benefits

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• A Value Analysis Approach (Value proposition)

How the new eB application adds value to customer & company? Can include intangible costs & benefits.

Several ideas to measure value can be used.

Cost-Benefit

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Value Exchange Model – components
Adapted from Tuunanen (2010)

Value Facilitating

Exchange

Social Commerce Site

Desired

Benefits

Desired

Benefits

Customer

Company

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Customer Investment (Coursework.info, 2003)

(Note: This is not exhaustive.Which are related to SC)

Psychological cost of Acquisition

Physical and mental effort of Consumption

Disposal – recycling, resell

Association – Social Community

Memory – Brand perception

Risk – Social Commerce – User ratings, recommendations.

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Customer Desired Benefits and Outcomes (Holbrook, 1999)

(Note: This is not exhaustive, which are related to SC)

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• Material (e.g. Raw material for production)
• People (e.g. clerks, officers)
• Infrastructure (e.g. Buildings, Servers, Electricity, Website)
• Processes (e.g. business procedures)
• Communication (e.g. Internet connection)

Supplier Investment

What investment can be reduced in Voov?

People – marketing people to acquire new members

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• Transactional Equity ($)
• value from transactions that allows it to pay for its investments (a/r, commissions)
• Relationship Equity
• relationships between customers and suppliers have a value
• Societal Equity
• generated by engaging in activities that give something back to the community e.g. Corporate Social Responsibility
• Organisational Equity
• Information and knowledge that are hard to imitate or can be only mimicked at a high cost

Supplier Desired Benefits

Which benefits relates to SC?

Relationship equity – customer’s affinity towards a brand.

Organization equity

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• Value for Employees
• Being treated respectfully (Malley, 2008)
• Involved in decision making (Malley, 2008)
• Meaningful work (Malley, 2008)
• Excellent compensation opportunities (Malley, 2008)
• Continued training and development (Malley, 2008)
• Value for Investors
• High returns
• Strong revenue growth
• Attractive profit margin

Supplier Desired Benefits

Enterprise social Network is most effective to increase value for employees

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• Tangible cost-benefits

Cost-Benefit

• Measureable tangible costs & benefits e.g. measures in financial statement.
• E.g. Return on Investment: A ratio of resources required & benefits generated by an SC project. Includes only quantifiable items (cost of resources, computed monetary savings, increase in revenue, etc.)

Not so relevant to SC. Conversion could be many factors. Only 1% is due to social media particularly social shopping tools e.g. ratings

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Figure 1.3 The Major Dimensions of Social Commerce

Social Commerce Models

You can use SC zones

as model

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Table 5.1 Mapping objectives with tactics

Activities, SNS, Tools & Tech

Which Zone?

• Social Community – Build brand awareness
• Social Publishing Model – Viral Marketing
• Social Commerce – reviews and rating
• Social Commerce – Group deals
• Social Community

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Risk Analysis

• SC risk

The likelihood that a negative outcome will occur in the course of developing and operating an SC strategy

• ISSUES TO CONSIDER DURING STRATEGY FORMULATION
• Social Media Fraud
• Multimedia liability (e.g., libel, slander, invasion of privacy…)
• Negative sentiment
• Computer virus attack
• Leak of sensitive information

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Risk Analysis

• Identify risks: strategic (wrong directions), financial (lack money & poor budgeting) & operational risks (security & privacy issues).
• Assess potential damage if occur.
• Contingency plan to mitigate risk.

• Risk Analysis

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Business Plan

• A written document that identifies the company’s goals and outlines how the company intends to achieve those goals.
• Combine the outcomes of first 2 phases, e.g. goals (derived from company, customer and competitor analysis, macro forces, SWOT), value propositions & ROI, cost-benefits, SC models (SC activies/apps/services, SNS & tools/technologies), & risks analysis, estimated resource required, Gant Chart and performance measures (see assignment)

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Step 3: Strategy Implementation

The development of detailed and short-term plans for carrying out the projects agreed on in SF

• Project team to implement according to formulated strategy (Step 2). Undertake a pilot project (help discover problems)
• Implementing SC Strategy includes:
• Use SC development process
• Require redesign of existing business processes
• Company should integrate SC with existing Marketing Communication Channel

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Specific activities and outcomes from strategy implementation phase include:

• Project planning
• Resource allocation
• Project management
• Pilot Project
• Actual Implementation of Project

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Step 4: Strategy Assessment & Performance Management (Why?)

The continuous evaluation of progress toward the organization’s goals, resulting in corrective action and, if necessary, strategy reformulation

• Find out if SC project achieves its goals. Corrective steps might be required
• Innovations: Could change models
• Go back to strategy planning, formulation or implementation

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The eB Strategic Planning Process

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Metrics, Measurements

• metric

A specific, measurable standard against which actual performance is compared

• measurement

Describing the metrics e.g. revenue growth metrics - measurements include total dollars, percentage change over time, percentage growth as compared to that of the industry.

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Metric must link to objectives

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Figure 5.7 Social Media Measurement Areas

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Social Media
Analytics and Sentiment Analysis

• Tools for Mining Social Media Activities
• Sentiment Analysis and Web 2.0
• Sentiment analysis* (opinion mining*)
• Video: “Social Sentiment: Are You Listening?” at youtube.com/watch?v=YGlhCCwYVh4
• Social Media Dashboards – Radian6, HootSuite

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For 50 top tools for social media monitoring

http://www.socialmediatoday.com/content/50-top-tools-social-media-monitoring-analytics-and-management