Chapter 5

Creating E-business Plan

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 Learning Objectives

To understand –
• The structure of an e-business plan document
• Various aspects of an e-business plan
• How to prepare a professional looking
business plan
• Process of generating an e-business plan
• Various software available that will help in
making the e-business plan most effective and
useful  
• How to incorporate e-business strategies into
the business plan
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 Introduction
• To start any business, online or traditional, a
well thought out business plan is must
• A carefully thought out business plan
document is an important preliminary step
for any business owner
• It helps determine whether or not the idea
for an e-business is viable
• It evaluates every aspect of the new business
venture
• The more details a business plan offers, the
better are the long-term chances for the
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success of the business
 Why a Business Plan
There are many reasons why a business plan has
to be prepared, like –
– To outline and focus on the objectives, provide other
necessary information and analysis
– An essential document while contracting with bankers,
investors, and money lenders
– To rightly point out / uncover the exclusions or weak
spots in the plan and planning process
– To understand and handle the unforeseen
complications to take proper business decisions
– Can be used to take advice from the experienced people
– To assign or distribute the business resources
appropriately
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 Questions to be Prepared
• Before writing business plan, asking few core
questions help in easing out the process
– What products / services will the business
provide its customers and what expectations is it
going to fulfil?
– Who are the potential customers for the products/
services that the business is planning to sell on
the Internet?
– What is so special about the products so that the
potential buyer will purchase them?
– How is the business planning to reach out to the
customer base? What are the marketing and
advertising plans?
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 Software to Create a Business Plan

• Various software programs available to help

create the business plan and compile
essential information
• Intended mainly for those who have not
written business plan earlier
• Majority of software packages guide through
the process, help in understanding the
information required and how to format it in
the best possible manner
• Can create a professional looking document
combining text, graphics, charts, pictures,
spreadsheets etc.
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 E-business Plan Elements
Depending upon the type of business being
created, a carefully planned and precisely
written business plan would include most of
the following sections -
1. Company name of the proposed business
2. An executive summary of the document
3. Objectives or goals of the e-business
4. One-paragraph mission statement that explains
the purpose of the company
5. Keys to success
6. Details about the company and products or
services with the heading company summary
7. Company location and facilities
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E­Business
 E-business Plan Elements
Cont..
8. Start-up summary detailing about requirements,
to get the company launched
9. Investments section
10. Detailed product / service description section
11. Competitive comparison section
12. Sourcing describes who the suppliers will be
13. Market analysis, Marketing and sales strategy
14. Strategic deals
15. Organizational structure of the company
16. Financial plan section
17. Risks that are involved in running e-business
18. Expansion plan 
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 Process of Writing e-business Plan

• Equally important as that of plan

• The process of writing the plan itself
increases the chances that the e-business
will be a success
• It makes a businessperson to –
– think forward
– to set the achievable business goals
– to foresee the problems and
– to be ready for the competition

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e-business Plan writing Aspects

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 Opportunity Analysis
• Opportunity Analysis is to assess how
prepared the organization is to start the e-
business on the potential benefits of the e-
business against the investments required
• This phase is the strategic planning stage of
the online business development process
• It helps to understand the extent of creating
visibility
• Understanding business scenario is
necessary to set realistic goals for the
business
• SWOT analysis can help in this stage toE­Business
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 Understanding Business Scenario
To analyse the business scenario the following
factors are important -
• Identify the nature of the business, as - soft
goods providers, hard goods providers or
service providers
• Know better about the needs of the customer
base
• Evaluate Internet as how much useful channel
for the business
• Advertise and promote the business website, e-
business, and judge how the response will be
when the © business actually starts
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 SWOT Analysis
• Provides a powerful insight of an organization
• Allows to check against the strengths and critical
issues to keep an eye on
• A useful tool to define and decide business
organization’s goals as well as marketing strategies
• Generally carried out at planning stage
• Helps the management to understand
– how the business is doing better than the
competitors or vice versa
– What the possible opportunities that may help
the business get benefited
– How a business should prepare to respond to the
possible external threats
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 SWOT Analysis

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 E-marketing and Sales Strategies
• Developing Internet marketing goals and
strategies before launching the website,
allow one to check how well the website can
serve the goals of e-marketing programmes,
before an actual long-term financial
commitment is made
• The sales and e-marketing strategies for an e-
business can be based on few simple
guidelines, as -
1. A proper domain name for the e-business
website can help in marketing the company and
its products
2. Create© freebie offerings for the loyal customers
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 E-marketing and Sales Strategies
Cont..
4. Concentrate on some particular part of the world,
as it may help to focus the business on a special
kind of target customers or individuals
5. Follow the advertising and Internet marketing
ethics and maintain the confidentiality of customer
data
6. Online events build awareness quickly. Try to
identify some event which will suit the business
and will help attract customers
7. The possible cross references for online products
must be thought out
8. Plan to have a newsgroup
9. Plan to be faster than competitors in adopting new
technologies and providing services to customers
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Cont..
 E-marketing and Sales Strategies
Cont..

10. Providing additional real-time information to the

customers can increase the company reliability.
For example, order tracking facility
11. Never try direct marketing methods as spamming
which may ruin the image of the company
12. Individualized customer centric e-marketing and
sales strategy is the key to the success of e-business

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 Product and Pricing Strategies
• Deciding product and pricing strategies,
budgeting, costing takes a major role in the
planning process
• In e-businesses, the price pressure is very
high as the prices have to be set to the
lowest possible as compared to that of the
competitors
• Customers may distinguish among the
products depending upon what value added
services can get with the same price
• The pricing strategies that can be used are -
– In the © 
initial/start up phase of the e-business,
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prices can be as low as possible to attract
Product and Pricing Strategies
Cont..
– One can fix the prices equal to the manufacturing
cost of the product, adding with it a fixed
percentage of profit margins
– It is a good practice to keep the prices just lower
than a big number, such as Rs 9999 rather than
Rs 10000, which psychologically affects the
buying tendency of the customers.
– Pricing can be defined by referring to prices
framed by the competitors
– Pricing can also be decided by the products and
the market
– Pricing strategies should be designed in such a
way to get the advantage of markets and market
situations and the clients and their mentality
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 Budgeting and Costing of e-
business
• Budget for e-business can be projected as a
single activity, such as website designing
and maintenance
• Or it can be spread across all other
departments, such as in e-marketing,
advertising, order handling, office
maintenance, delivery of the products etc.
• The following steps can be followed to
estimate the annual e-business budget -
– Try to identify the cost for every e-business
process, such as marketing, manufacturing, order
handling, office maintenance, and so on E­Business
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Cont..
Budgeting and Costing of e-business
Cont..

– Estimate the costs for website development and

maintenance, domain name registration, adding
graphics and multimedia on the website,
copywriting, licensing, hosting, testing, upgrades
and so on
– Calculate the employees’ salaries for all twelve
months and various costs involved in the
business to estimate the accurate budget
– Try to identify the work which can be done in-
house and the work to be outsourced and
accordingly the costs for each
– One can divide all these costs by twelve months.

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 Management and the Team
• It’s absolutely necessary that the
management team works in alignment with
the business objectives that are written
down in the business plan
• A proper recruitment planning is must
before starting recruitment process
• Plan for the management team selection,
operation, and task execution is based on
three factors -
– Clarity of business objectives to everyone
involved in the business
– Getting©  the right people with right orientation
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 Management and the team
• The plan of the management team at high
level should include the following -
– Crisp process of defining goals and
business objectives
– Understanding of engineering plans,
marketing plans, and financial statements
against the real performance matrix
– Setting the goals and objectives in the
business plan and making the
management team aligned with them is
the first step to be comparable with the
projected goal
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Website and Portal Development
• In this phase, it is determined –
– What kind of web presence the organization
needs
– How to develop the business web site—in-house
or outsourced
– Who’ll be the Internet Service Provider (ISP) for
porting the business website

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 Website Design Issues
The issues that need to be taken care of while
designing websites are -
• Decide how much portion of the overall
business should be made online
• Plan and make provision of two-way
communication for direct feedback from the
customers
• Customize the website to suit the
requirements of every user
• A useful visual presentation of the company
should be prepared and host on the website
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Cont..
E­Business
 Website Design Issues
Cont..
• Decide the proportion of company and product
information, depending upon the type of
business
• Set proper security procedures such as
encryption, digital signatures, Firewall etc. for
the website
• Think and keep provisions for available,
possible information to be shared among all
those involved in business processes using
business website
• A core team of experts can be formed to
understand the rapidly changing new
technologies and finding solutions to quickly
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 Expansion / Exit Strategy
• E-business life cycle starts with planning,
continues with growth and concludes with exit
• The decision about growth strategies as well as
exit strategies should be thought of during the
planning itself
Expansion Strategy
– Every business needs to stay competitive in
a global marketplace
– A plan to expand, to become a more modern
business to improve on the sales and
customer relationships, has to be thought of
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Cont..
E­Business
 Expansion Strategy
– An existing e-business can be expanded
simply by upgrading the website to a
higher level to facilitate more e-business
operations through the website
– A well laid-out strategy is necessary to
make the expansion efficient and cost
effective
– Effective expansion enables the e-
business to enter into new markets, to
reach out to a wider customer base, and to
achieve more customer satisfaction
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 Exit Strategy
Exit Strategy
• It is equally important to plan the exit of any e-
business as that of expansion
• If exit is not planned at the beginning or at certain
point of e-business, one may end up in huge loss
• It is a good hold on particular market, or the people,
management, or technical expertise involved in the
business that can become a selling point to get good
profit out of selling the business
• There has to be a clear idea about the strengths and
selling points of the business, to exit
• Exit strategies too should get changed or refined
with the revelation of new facts related to the
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