Internet motivates planning
The success of every business entity is dependent on its effectiveness in planning and the implementation of various strategies (Scallan, 2003, p. 35). Internet technology has stimulated a large number of firm’s to undertake planning in their strategic management processes (Coupey, 2005).
This is because the firm is able to obtain useful market information, such as the performance of its competitors. As a result, the firm is able to gauge its competitive position. If the firm’s performance is low, the firm is able to identify alternatives which it can implement to improve its market position. This means that the internet motivates planning through provision of knowledge.
The planning process
The planning process is complex and involves a number of activities which include formulation of the firm’s mission, objectives, conduction of a situational analysis, and formulation of the strategy, implementation and control (Bidgoli, 2004, p. 482). For the planning process to be effective, the firm is required to scan the business environment (Kenjale& Phatak, 2002) owing to a dynamic business environment.
As a result, the firm’s plan must reflect the changes occurring in the environment. Some of the core environments which should be considered relate to political, economic, social, technological and legal environment. In addition, the firm should also conduct an internal environmental analysis. The internet is a rich source of information, and it may therefore enable a firm to gather the necessary information.
Through the internet, a firm is able to post its vision, mission and objectives for potential clients to access. Therefore, a firm must ensure that the components of its strategic plan reflect the interests of the various stakeholders (Kaufman, 2003).
In addition, the internet acts as a collaborative tool through which the firm can interact with the various parties. As a result, the firm is able to identify possible trends and hence adjust its strategies accordingly. This ensures effectiveness in the firm’s long-range planning (Bidgoli, 2004, p. 482).
Effects of internet on the planning outcomes
An outcome refers to a desired result. In business, outcomes can be categorized into financial and financial outcomes. Through the internet, a firm is able to determine whether it has achieved the forecasted outcomes as there are various internet technologies which aid in measuring the outcomes (Haig, 2001, p. 34).
In addition, a firm can be able to identify possible risks which might result in the failure of achieving the desired outcomes (Bidgoli, 2004, p. 234).
For example, through Customer Relationship Management (CRM) software which is an internet based technology, a firm is able to determine the customers’ attitude towards the firm’s products and services. This arise from the fact that the customers can post their views regarding the product or service. In case of dissatisfaction, the firm’s management is able to identify it and adjust it accordingly.
Business to Business exchanges
According to Haig (2001, p. 11), B2B exchanges ensure business partners such as suppliers and intermediaries interact with each other in their operation by offering products and services in line with a predetermined criteria. According to Coupey (2005) the number of individuals that a firm interacts with is dependent on the buying situations. There are three main buying situations which include;
- Straight re-buy.
- New buy.
- Modified re-buy.
Straight re-buy
This is a situation in which a firm purchases the same product without any form of modification. In addition, the firm continuously re-orders the same type of product from the same vendor. Examples of such products may include bulk chemicals or office supplies. In order to ensure that a straight re-buy is maintained between the firm and the supplier, the supplier has to ensure consistency of the quality of the product or service.
To ensure efficiency in the purchasing process, an automatic reordering system is installed. By establishing a straight re-buy, a firm is guaranteed of a constant stream of revenue as the firm will not need to seek for other vendors to supply the products. This means that the firm can concentrate on seeking other market opportunities.
New-buy
This is a form of B2B exchange which entails a firm purchasing products or services for the first time. During a new buy, a considerable duration is involved. The duration of time taken during a new-buy is dependent on the complexity of the product or service. If the product is complex, a large number of firms will be involved in an effort to select the most effective supplier.
Modified re-buy
This is a b2b exchange whereby a firm intends to purchase the same type of product. However, a number of modifications with regard to a certain specification such as delivery, quantity and packaging have to be made. Alternatively, the firm may require the product to be customized. In addition, the firm has discretion to make the purchase from another vendor.
Conclusion
The internet technology has positively influenced various business practices such as planning in three main facets. These include motivating firms to plan, the planning process and outcome. In addition, the internet has also enhanced business to business exchanges. The core b2b situations include straight re-buy, new-buy and modified re-buy.
Reference List
Coupey, E. (2005). Digital business: Concepts and strategies. Upper Saddle River, NJ: Pearson Prentice Hall.
Bidgoli, H. (2004). The internet encyclopedia: volume 2. New York: John Wiley and Sons.
Haig, M. (2001). The B2B e-commerce handbook: how to transform your business to business global marketing strategy. London, UK: Kogan Page Publishers.
Kaufman, R.A. ( 2003). Strategic planning for success: aligning people, performance and payoffs. New York: John Wiley and Sons.
Kenjale, K. & Phatak, A. (2002). The benefits of B2B exchanges. Web.
Scallan, P. (2003). Process planning: the design/manufacture interface. New York: Butterworth-Heinemann.