Strategy formulationinvolves the identification of alternative strategies, a review of their
merits and then selection of the best candidate strategies. Since the Internet is a rela-
tively new medium, and many companies are developing a strategy for the first time, a
range of strategic factors must be considered in order to make the best use of it. In this
section we shall cover the main strategic options by defining eight key decisions.
Although at the height of the dot-com bubble it was suggested by some commenta-
tors that companies should entirely re-invent themselves, for most companies Internet
marketing strategy formulation typically involves making adjustmentsto marketing strat-
egy to take advantage of the benefits of online channels rather than wholescale changes.
Michael Porter (2001) attacks those who have suggested that the Internet invalidates
well-known approaches to strategy. He says:CHAPTER 4· INTERNET MARKETING STRATEGY
Figure 4.9 An example of a performance measurement system for an e-commerce electrical goods retailer
Source: Friedlein (2002)
- Strength of proposition
- Marketing
- Increased acceptance of online shopping
Customer
acquisition- Competitive differentiation
- Customer service
- Customer relationship management
- Content freshness
- Seducible moments
- Loyalty
Frequency
of visits- Ease of use
- Speed of site
- Security/trust
Abandoned
purchases- Relevance
- Value Promotions
- Navigation
- Browsing behaviour
- Service
Customer
journey- Reward schemes Up-selling
- Product grouping
- Bundling incentive
Cross-
sellingConversion
rate = 5%Average
order value
= £160Average
order value
= £8Number of
visits = 10mTotal
online sales
£80 millionPerformance
driversKPICustomer
retentionSuccess factorsStrategy formulation
Strategy
formulation
Generation, review and
selection of strategies
to achieve strategic
objectives.