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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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