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IntroductionConcentration

on

strategic

issues

will

preventthe

elaboration

of

the

first

three

topics

in

thischapter.E-business

exerts

great

influences

on

thebusiness

model

and

the

strategic

aspects

of

theorganization.

We

should

incorporate

e-businessinto

our

analysis

in

the

exam

if

necessary,especially

when

five-forces

model

and

valuechain

are

applied.IntroductionConcentrationons11

Principles

of

e-businessE-business

is

the

transformation

of

key

businessprocesses

through

the

use

of

Internettechnologies.E-business

VS

E-commerceDistinctive

features

of

e-business1Principlesofe-businessE-bu2Motives

to

adopt

e-businessThe

motives

can

be

analyzed

with

regard

toenvironment,

capability

and

stakeholder’s

expectations.Benefits

of

e-businesscost

reductioncapabilitycommunicationcontrolcustomer

servicecompetitive

advantageMotivestoadopte-businessThe3Barriers

to

e-businessCountry,

the

ability

to

access

to

internet.economic

issues,

cash

or

credit

buying.Culture,

conservative

or

anizational

typeBarrierstoe-businessCountry,42

Organizations

and

their

customersVarieties

of

e-commerce:

B2B,

B2C,

C2B

andC2C.Channel

structure

will

be

changed

by

internet.Disintermediation,

such

as

Dell

computers.Reintermediation,

for

example,

Amazon

is

replacing

thetraditional

intermediaries.New

types

of

intermediary,

search

engines

like

GoogleCountermediation2Organizationsandtheircust5Business

models

for

e-commerceRappa

identifies

nine

generic

business

model:Brokerage

modelAdvertising

modelInfomediary

modelMerchant

modelManufacturer

modelAffiliate

modelCommunity

modelSubscription

modelUtility

modelBusinessmodelsfore-commerce64

IT

and

strategyMegatrends

resulted

from

e-commerceNew

distribution

channelsShift

of

power

to

customersGrowing

competitionAn

acceleration

of

pace

of

businessTransformation

of

businessAdd

value

to

a

wider

environmentKnowledge

as

a

strategic

asset4ITandstrategyMegatrendsre7Organizations

can

visualize

changes

atthree

interconnected

levels.Level

1-

the

simple

introduction

of

newtechnologyLevel

2-reorganizationLevel

3-re-positioning

of

the

organizationOrganizationscanvisualizech8Building

an

e-commerce

strategyE-commerce

strategies

should

be

justified

interms

of

suitability,

acceptability

andfeasibility.Suitability:

e-commerce

strategy

should

beconsistent

with

the

general

strategy.Acceptability:

distributors

are

particularlyimportant

here.Feasibility:

financial

and

resource

feasible.Buildingane-commercestrateg9Strategy

process

model

for

e-businessKnowledge

building

and

capabilityevaluationDevelop

a

comprehensive

e-businessdesignE-business

blueprintApplication

development

and

deploymentStrategyprocessmodelfore-b10Stage

modelsRichard

Nolan’s

model:Initiation

stageContagion

stageControl

stageIntegration

stageThe

initial

model

was

adjusted:Data

administration

stageMaturity

stageStagemodelsRichardNolan’smo11Rayport

and

Jaworski

suggest

a

four-stagemodel

of

the

evolution

of

Internet-basedB2B

e-commerce:EmissionInteractionTransactionCollaborationRayportandJaworskisuggesta125

Supply

chain

managementA

traditional

supply

chain

is

based

on

pushmodel,

which

is

very

product-centric.Driven

by

e-commerce’s

capabilities

toempower

clients,

many

companies

are

moving

toa

customer

driven

pull

model.E-commerce

creates

a

much

more

efficientsupply

chain

that

benefits

both

customers

andmanufacturers.5SupplychainmanagementAtra13In

reality,

a

supply

chain

is

a

hybrid

of

bothmodels.

For

example,

in

Dell,

the

inventorylevels

of

individual

components

aredetermined

by

forecasting

general

demand,but

final

assembly

is

in

response

to

aspecific

customer

request.Inreality,asupplychainis14Impact

of

IT

on

the

value

chainInbound

logistics.

MRP

and

JITOperations.

CIM

and

ERPOutbound

logistics.

Track

the

progress

ofdeliveryMarketing

and

sales.

EPOS.Service.

Customer

databaseImpactofITonthevaluechai15Procurement.

EDITechnology

development.

CADHuman

resource.

Skills

database.Procurement.EDITechnologydev16Taking

advantage

of

ITPorter

and

Millar

advocate

five

steps

seniorexecutives

may

follow

to

take

advantage

ofopportunities

created

by

IT:Assess

information

intensityDetermine

the

role

of

IT

in

industry

structureIdentify

and

rank

the

ways

in

which

IT

can

createcompetitive

advantageInvestigate

how

IT

spawn

new

businessesDevelop

a

plan

to

exploit

ITTakingadvantageofITPortera17Banking,airlinesFashionOil

refiningCementLowHigh

HighInformation

intensityof

the

value

chain

LowPorter

and

Millar’s

information

intensity

matrix

Information

content

of

the

productBanking,OilrefiningLowHigh Hi18If

the

information

content

of

the

product

ishigh,

Internet

can

be

employed

to

exhibit

theproduct,

thereby

enhancing

the

productdelivery.For

the

segment

where

the

informationintensity

of

value

chain

is

high,

IT

mayimprove

the

efficiency,

for

example,

thelinkages

will

become

smooth.When

both

information

content

andinformation

intensity

are

low,

IT

mayfacilitate

the

automation

of

business.Iftheinformationcontentof196

Restructuring

the

supply

chainVertical

integrationVertical

disintegration

means

that

variousdiseconomies

of

scale

and

scope

have

broken

aproduction

process

into

separate

companies,each

performing

a

limited

subset

of

activitiesrequired

to

create

a

finished

goods,For

example,

filmed

entertainment

was

brokeninto

small

fragments

after

World

War

Ⅱ.6Restructuringthesupplycha20Virtually

integrated

company

is

one

where

corebusiness

function,

as

well

as

non-core

businessfunctions

take

place

in

external

organizations,such

as

NIKE.Virtuallyintegratedcompanyi21SuppliersManufacturingCustomersTwo

kinds

of

integration

Delivery

integrationInformation

integrationSuppliersManufacturingCustomer22E-business

is

increasing

the

pressure

forsupply

chain

responsiveness

in

three

ways:Increased

competitionIncreased

volume

and

speed

of

dataMore

demanding

customer

requirementsE-businessisincreasingthep236

E-procurementThe

benefits

of

e-procurementCost

reductionsReduced

inventory

levelsWider

choice

of

suppliersImproved

manufacturing

cyclesIntangible

benefitsBenefits

to

suppliers6E-procurementThebenefitsof24Risks

of

e-procurementControl,

unauthorized

ordersOrganizational

risk,

failure

of

implementationData

securityManagement

loses

spending

controlSupply

chain

problemsRisksofe-procurementControl,25SummarySeveral

stage

models

are

proposed

to

evaluatethe

maturity

of

capability,

then

to

guide

the

ISdevelopment

with

businesses.IS

will

shape

the

value

chain

and

value

network.The

influence

can

be

assessed

based

on

theinformation

intensity

of

value

chain

andinformation

content

of

products.Supply

chain

management

options

can

beportrayed

as

a

continuum

from

vertical

integrationand

virtual

integration.SummarySeveralstagemodelsar26IntroductionConcentration

on

strategic

issues

will

preventthe

elaboration

of

the

first

three

topics

in

thischapter.E-business

exerts

great

influences

on

thebusiness

model

and

the

strategic

aspects

of

theorganization.

We

should

incorporate

e-businessinto

our

analysis

in

the

exam

if

necessary,especially

when

five-forces

model

and

valuechain

are

applied.IntroductionConcentrationons271

Principles

of

e-businessE-business

is

the

transformation

of

key

businessprocesses

through

the

use

of

Internettechnologies.E-business

VS

E-commerceDistinctive

features

of

e-business1Principlesofe-businessE-bu28Motives

to

adopt

e-businessThe

motives

can

be

analyzed

with

regard

toenvironment,

capability

and

stakeholder’s

expectations.Benefits

of

e-businesscost

reductioncapabilitycommunicationcontrolcustomer

servicecompetitive

advantageMotivestoadopte-businessThe29Barriers

to

e-businessCountry,

the

ability

to

access

to

internet.economic

issues,

cash

or

credit

buying.Culture,

conservative

or

anizational

typeBarrierstoe-businessCountry,302

Organizations

and

their

customersVarieties

of

e-commerce:

B2B,

B2C,

C2B

andC2C.Channel

structure

will

be

changed

by

internet.Disintermediation,

such

as

Dell

computers.Reintermediation,

for

example,

Amazon

is

replacing

thetraditional

intermediaries.New

types

of

intermediary,

search

engines

like

GoogleCountermediation2Organizationsandtheircust31Business

models

for

e-commerceRappa

identifies

nine

generic

business

model:Brokerage

modelAdvertising

modelInfomediary

modelMerchant

modelManufacturer

modelAffiliate

modelCommunity

modelSubscription

modelUtility

modelBusinessmodelsfore-commerce324

IT

and

strategyMegatrends

resulted

from

e-commerceNew

distribution

channelsShift

of

power

to

customersGrowing

competitionAn

acceleration

of

pace

of

businessTransformation

of

businessAdd

value

to

a

wider

environmentKnowledge

as

a

strategic

asset4ITandstrategyMegatrendsre33Organizations

can

visualize

changes

atthree

interconnected

levels.Level

1-

the

simple

introduction

of

newtechnologyLevel

2-reorganizationLevel

3-re-positioning

of

the

organizationOrganizationscanvisualizech34Building

an

e-commerce

strategyE-commerce

strategies

should

be

justified

interms

of

suitability,

acceptability

andfeasibility.Suitability:

e-commerce

strategy

should

beconsistent

with

the

general

strategy.Acceptability:

distributors

are

particularlyimportant

here.Feasibility:

financial

and

resource

feasible.Buildingane-commercestrateg35Strategy

process

model

for

e-businessKnowledge

building

and

capabilityevaluationDevelop

a

comprehensive

e-businessdesignE-business

blueprintApplication

development

and

deploymentStrategyprocessmodelfore-b36Stage

modelsRichard

Nolan’s

model:Initiation

stageContagion

stageControl

stageIntegration

stageThe

initial

model

was

adjusted:Data

administration

stageMaturity

stageStagemodelsRichardNolan’smo37Rayport

and

Jaworski

suggest

a

four-stagemodel

of

the

evolution

of

Internet-basedB2B

e-commerce:EmissionInteractionTransactionCollaborationRayportandJaworskisuggesta385

Supply

chain

managementA

traditional

supply

chain

is

based

on

pushmodel,

which

is

very

product-centric.Driven

by

e-commerce’s

capabilities

toempower

clients,

many

companies

are

moving

toa

customer

driven

pull

model.E-commerce

creates

a

much

more

efficientsupply

chain

that

benefits

both

customers

andmanufacturers.5SupplychainmanagementAtra39In

reality,

a

supply

chain

is

a

hybrid

of

bothmodels.

For

example,

in

Dell,

the

inventorylevels

of

individual

components

aredetermined

by

forecasting

general

demand,but

final

assembly

is

in

response

to

aspecific

customer

request.Inreality,asupplychainis40Impact

of

IT

on

the

value

chainInbound

logistics.

MRP

and

JITOperations.

CIM

and

ERPOutbound

logistics.

Track

the

progress

ofdeliveryMarketing

and

sales.

EPOS.Service.

Customer

databaseImpactofITonthevaluechai41Procurement.

EDITechnology

development.

CADHuman

resource.

Skills

database.Procurement.EDITechnologydev42Taking

advantage

of

ITPorter

and

Millar

advocate

five

steps

seniorexecutives

may

follow

to

take

advantage

ofopportunities

created

by

IT:Assess

information

intensityDetermine

the

role

of

IT

in

industry

structureIdentify

and

rank

the

ways

in

which

IT

can

createcompetitive

advantageInvestigate

how

IT

spawn

new

businessesDevelop

a

plan

to

exploit

ITTakingadvantageofITPortera43Banking,airlinesFashionOil

refiningCementLowHigh

HighInformation

intensityof

the

value

chain

LowPorter

and

Millar’s

information

intensity

matrix

Information

content

of

the

productBanking,OilrefiningLowHigh Hi44If

the

information

content

of

the

product

ishigh,

Internet

can

be

employed

to

exhibit

theproduct,

thereby

enhancing

the

productdelivery.For

the

segment

where

the

informationintensity

of

value

chain

is

high,

IT

mayimprove

the

efficiency,

for

example,

thelinkages

will

become

smooth.When

both

information

content

andinformation

intensity

are

low,

IT

mayfacilitate

the

automation

of

business.Iftheinformationcontentof456

Restructuring

the

supply

chainVertical

integrationVertical

disintegration

means

that

variousdiseconomies

of

scale

and

scope

have

broken

aproduction

process

into

separate

companies,each

performing

a

limited

subset

of

activitiesrequired

to

create

a

finished

goods,For

example,

filmed

entertainment

was

brokeninto

small

fragments

after

World

War

Ⅱ.6Restructuringthesupplycha46Virtual

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