A global educational resource for e-business and Internet marketing strategies
The Health and Health Care
 e-Business North American Tour
Phase 1:
The Foundation Phase

Phase 2:
The Exploitation Phase

Phase 3:
The Innovation Phase

Phase 4:
The Business Extension Phase

Phase 5:
The Strategic Transformation Phase

AlexDrossos.com
A thorough resource for the use of technology in health and health care

TomVassos.com
A practical global resource for industry specific e-business strategies

UofEbusiness.com
A global educational resource for e-business and Internet marketing strategies

e-Business World Tours
Examples of the e-Business Roadmap applied across several industry sectors

Phase 5: The Strategic Transformation Phase

The Strategic Transformation Phase

29. The Global Stage

The Global Stage involves the creation and execution of a strategy that can truly meet the needs of the global community. Here are some examples of global tactics that must be considered:

  • Translation of web pages into multiple languages
  • Sales support and customer support provided in multiple languages
  • Product literature, instructions and warranties that are published in multiple languages
  • The availability of product prices in multiple currencies
  • Flexible order entry forms that ask for a state or a province, a zip code or a postal code, etc.
  • Web content that takes into account cultural differences between people in countries around the world
  • Consideration for global shipping logistics, duties, taxes, import/export paperwork, etc.

Even companies that only want to support and sell to one country or one region must have a global strategy. This may simply mean explaining to visitors in your tagline and on your web pages that you will only do business in certain areas. This will eliminate the problem of visitors from other countries wasting their time at your web site.

In the Health and Health Care industry, we found two examples of companies that have begun to think about addressing the needs of the global community:

  • At the Health Canada web site, they have translated their web pages into French. Of course this is mostly because Canada has two official languages - English and French. It also enables Health Canada to reach a larger market in a global economy.
  • The Kids Health web site has translated its content into Spanish.

30. The Niche Marketing Stage

In contrast with the real world, the Internet is an ideal environment for reaching homogeneous groups of consumers with similar likes, interests, hobbies, cultural backgrounds, age categories, etc. This could open the door to a market segmentation strategy on the Internet that targets several focused and narrow segments, versus a real world market segmentation strategy that would likely cover much broader segments.

The Niche Marketing Stage involves targeting niche market segments with specific and relevant products, services, marketing messages, references, branding strategies, etc. In a B2B environment, the segmentation strategies could be along these lines:

  • By Industry Banking, insurance, manufacturing, travel, brokerage, transportation, retail, etc.
  • By Job Category Presidents, CEOs, CIOs, finance managers, HR managers, engineers, sales reps, buyers, etc.

In a B2C environment, the segmentation strategies tend to be along these lines:

  • Age
  • Sex
  • Culture
  • Geographic location
  • Sexual orientation
  • Ethnicity
  • Hobbies
  • Interests

For example, imagine a travel agency that is targeting the global consumer travel opportunity ABC Global Travel, "We offer the best vacation packages to meet your global travel needs." Now imagine a series of niche market competitors, each doing a great job of meeting the needs of a specific segment of the market:

It would be very difficult for ABC Global Travel to compete with these niche competitors on the Internet. This would likely result in a loss of market share one customer at a time one market segment at a time. A possible strategy for ABC Global Travel could be to select 5 niche segments that they have strength in, and create 5 very targeted niche strategies.

Building a niche marketing strategy involves the following tactics:

  • Conduct research and select the niche market segments you want to target
  • Create products and services that are better able to meet the needs of these segments
  • Create multiple web sites that demonstrate your ability to meet the needs of these segments
  • Create a very hard hitting and focused e-brand strategy for each of the segments you have decided to target
  • Create a support infrastructure that is able to meet the needs of each of your targeted customer segments
  • Launch a very targeted marketing campaign for each of these segments

A niche marketing strategy should benefit your customers in the following ways:

  • Improved satisfaction with your products or services since they are much more targeted to their needs
  • Improved satisfaction with your overall level of support

A niche marketing strategy should result in an improved level of customer satisfaction, providing you with the following benefits:

  • Stronger customer references
  • More customer referrals
  • A strengthening of your e-brand
  • An increase in sales and market share
  • An avoidance of market share erosion

Possible disadvantages of a very fragmented niche marketing strategy could be:

  • A dramatic increase in marketing costs
  • An increase in customer acquisition costs
  • An increase in customer support costs
  • A decrease in profitability
  • A loss of market share if you spread yourself too thin and do not properly address each of the segments that you are targeting

In the Health and Health Care industry, here is a specific example of a niche marketing strategy in action:

  • The Kids Health web site allows users to enter as Parents, Kids, or Teens. It then gives each of these three groups entirely different experiences on its web site in terms of content, style, look and feel.

Entry into the Kids Health web site

31. The e-Channel Stage

The e-Channel Stage involves the creation and execution of a global online channel strategy. Here are some potential objectives of your e-channel strategy:

  • Maximize global sales
  • Reduce operating costs
  • Maximize global profits
  • Improve communications and support for your existing channel partners
  • Improve communications and support for your corporate owned channels
  • Minimize horizontal channel conflict (between channel partners)
  • Minimize vertical channel conflict (between you and your channel partners)

There are 2 strong forces at work on the Internet that could have an impact on your e-channel strategy decisions. The first strong force is called disintermediation. Disintermediation refers to the elimination of channel layers, enabling certain companies to be able to shorten the value chain from their company to the end consumer. For example, rather than selling through distributors and retailers, a manufacturer could disintermediate these channel partners and sell direct to consumers.

Therefore, an important e-channel question for your company is whether or not to disintermediate your channel partners and sell direct, or avoid direct sales altogether and strictly support your existing channel partners both on the Web and off the Web. The answer to this question should be determined by a number of factors, including:

  • The relative strength of your company and your channel partners in the value chain
  • The strength of your brand relative to the strength of your channel partners' brands
  • The strength of your current global channel coverage
  • The relative strength of your company versus your competitors

Depending on your answer to these questions, it may make sense to customize your e-channel strategy region by region. Because of an existing strong channel infrastructure in North America, it may make sense to avoid e-commerce altogether and only sell your offering through existing channel partners. In Europe however, it may make sense to attempt both direct online sales, as well as channel partner sales. And in markets such as Asia where you may not have any channel coverage, you may decide to sell entirely direct on the Web.

Selecting an appropriate e-channel strategy is further complicated by the fact there are many different approaches to conducting online commerce without fully disintermediating your existing channel partners. For example, you could avoid selling your primary product online, and only focus your online sales efforts on selling:

  • Replacement parts
  • Product refills or supplies
  • Only your low-end product line
  • Only customized products
  • Only products that you have re-branded under a different company name and a different brand name

Some companies decide not to disintermediate their channel partners, but instead choose to use Internet and extranet investments to solidify their existing channel relationships. A strong e-channel support strategy could provide the following online functionality for their channel partners:

  • Online catalogues
  • Online data sheets and product specifications
  • Access to real-time inventory data
  • Access to real-time order entry and order tracking
  • Access to applications for online paperless bill presentment and bill payment

In the Health and Health Care industry, there is some evidence that companies are using the Internet to support their channel partners. For example:

In the Health and Health Care industry, there is some evidence that companies are using extranets to support their channel partners. For example:

  • At the Telemedical.com web site there is a password protected area for their channel partners which provides capabilities such as access to personalized clinical, financial, and operational data.

The second strong force at work on the Internet is called cybermediation the introduction of entirely new channel layers. These new cybermediaries are typically very specialized and focused on a narrow segment of the value chain for that industry.

When considering potential forces of cybermediation in your industry, you should consider the potential implications in terms of both threats and opportunities. Do any recent new cybermediaries pose a competitive threat to your company? Is it possible that new cybermediaries in the future could cause a major potential upheaval for your company? Could your company reposition itself as a cybermediary in order to strengthen your own market and competitive positioning? These are important considerations for any company.

In the Health and Health Care industry one simple example of a competitive cybermediary was found. Many books from the HIMSS Books web site are also sold at Amazon.com.

32. The Strategic Alliance Stage

The Internet allows us to break down barriers between companies. This opens the door to creative strategic alliances between companies that will benefit all, as well as provide benefits to your customers. For example, imagine a company that sells wedding cakes. Rather than create their own web site, they could create a strategic alliance with a wedding photographer, a wedding videographer, a wedding hall, etc.

The benefit to the customer is that they could get everything they need at one web site, rather than having to go to 5 different web sites and conducting 5 different transactions. The benefits to the strategic alliance members include:

  • Lower costs since they would be sharing the development and support costs with other companies
  • A bigger overall marketing budget which should lead to a bigger impact in the market
  • A direct positive impact on your e-brand since you would now have the credibility of the multiple companies involved

There are many different kinds of strategic alliances that you could consider:

  • Companies offering complementary products and services (as in the example above)
  • Competitors
  • Government
  • Services intermediaries
  • Marketing intermediaries
  • Associations
  • Content intermediaries
  • Cybermediaries
  • Technology companies
  • Value chain partners
  • Web pioneers
  • B2B customers

Here are some examples of strategic alliances in the Health and Health Care industry:

  • The AOL Health portal has created an alliance with WebMD.com and Oxygen.com which results in AOL being able to focus on its core competencies (Internet infrastructure) and allowing WebMD and Oxygen to deliver the content (their core competencies). Furthermore, the three brands working together strengthen each other.
  • At the Nurse.com web site, they have this logo:    Stethoscope.com
    which shows that they have created a strategic alliance with another online store, Stethoscope.com. In fact, Nurse.com has used this strategy with almost all of their services - they have created strategic alliances with other online companies that deliver the services that the Nurse.com portal appears to directly offer.

33. The e-Marketplace Stage

E-marketplaces are e-business trading networks that enable the buying and selling of goods in a multi-vendor marketplace-like setting. E-marketplaces can also automate many of the functions and processes that occur in the value chain, as well as provide very targeted information for this segment such as breaking news, legislation, etc. Companies that participate in e-markets may be competitors and/or supply chain partners.

To build your e-marketplace strategy, you could take two approaches. You could create your own e-marketplace and convince companies to participate in it, or, you could participate in existing e-marketplaces. An example of an existing e-marketplace is e-Steel which is dedicated to the steel industry, or GoFish.com which enables fisherman/women and restaurants to conduct e-commerce transactions directly with each other.

In the Health and Health Care industry, we found this e-marketplace:

  • FitnessMX.com is an e-marketplace for buyers and suppliers in the fitness arena to collaborate with one another and realize time and money savings.

34. The Mobile Stage

The Mobile Stage involves the use of Internet appliances and wireless computing in order to redefine your Internet marketing and support strategies. This could involve devices such as digital cellular telephones, pagers or various forms of offline and online personal digital assistants.

The Mobile Stage potentially offers you some interesting opportunities to create mobile applications that may:

  • Improve your market positioning and strength against competitors
  • Provide a soft lock-in with customers, reducing your customer attrition rate
  • Build barriers to entry, keeping competitors out
  • Increase your sales, market share and profits

A good example of the use of mobile devices for customer support has been implemented by SwissAir. Rather than waiting in long check-in line-ups at the airport, SwissAir customers can check in using their own mobile phone. And in the future, with location-based mobile devices such as cellular phones, the computer could automatically do the check-in for you and phone you when you arrive at the airport! 

In the Health and Health Care industry, we found the following examples of mobile wireless computing in action:

  • In the US, Veterans Affairs has recently received an award for its Bar Code Medication Administration software. It uses handheld devices to scan patients' bar codes before administering medications, which results in an 86.2% improvement in the reported medication error rate.
  • There are numerous handheld software vendors that provide reference material for physicians and other healthcare practitioners. If these handheld devices are wireless enabled the content can even be updated on the handheld in real-time as it changes.

35. "The Future" Stage

"The Future" Stage refers to the forward thinking that must go on to ensure that your company is not sideswiped by emerging trends and entirely new competitors using entirely new business models. It involves thinking about the future and making sure that your company continues to head down the right path.

Some potential future e-business trends and applications in the Health and Health Care industry include:

  • The widespread use of wireless technology for patient management in and out of the hospital setting.
  • The use of telemedicine enabled technologies that allow for remote diagnosis, monitoring, consultation, and even treatment. This is especially helpful in situations where the patient is in a remote geographic location or when the medical expertise does not exist locally.

Phase 1:
The Foundations Phase

Phase 2:
The Exploitation Phase

Phase 3:
The Innovation Phase

Phase 4:
The Business Extension Phase

Phase 5:
The Strategic Transformation Phase

TomVassos.com
A practical global resource for industry specific e-business strategies

UofEbusiness.com
A global educational resource for e-business and Internet marketing strategies


The co-authors of this report are Alex Drossos and Tom Vassos. Tom Vassos researched, created and wrote the content that relates to the 35-stage e-Business Roadmap. Alex Drossos completed this work as partial fulfillment towards an MBA degree at the Michael G. DeGroote School of Business at McMaster University in Hamilton, Canada. This report was written for the course called Marketing in Electronic Commerce, taught by Tom Vassos, author of the book Strategic Internet Marketing. There are also several more research reports available that cover over 200 other products, services and industries. Your feedback is welcome.


Tom Vassos

© 2002 Alex Drossos
© 2002 UofEbusiness.com