Slide 4.1
Recap
Chapter 2
Strategy: Fit between Market Positioning and Resource Exploitation
Competitive Advantage: Through asset, competency, RBV
SWOT Analysis
Strategic Decision:
Cost leadership, Differentiation, Hybrid
Chapter 3: External Analysis
Firm < Industry < Remote macro-environment
Industry:
Porter’s Five Forces
Co-opetition Framework
Segmentation:
Why segment?
Features
Types
Targeting strategies
Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2nd edition, © Pearson Education Limited 2008
Slide 4.2
Chapter 4:
Internal analysis: e-business competencies as sources of
strengths and weaknesses
Goal of Strategy Formulation
Position an e-business venture so that it can:
• Exploit the opportunities that are afforded by
its environment
• Avoid risks that it is exposed to
Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2nd edition, © Pearson Education Limited 2008
Slide 4.3
Chapter 4: Internal analysis: e-business competencies as
sources of strengths and weaknesses
After this session you should be able to:
 Understand the meaning of core competence in e-business.
 Assess the impact of the Internet on the value chain.
 Appreciate how a company can leverage the virtual value chain.
 Understand the four virtual spaces of the ICDT (Information,
Communication, Distribution, and Transaction) framework.
 Apply the ICDT framework for selecting activities suited for e-business.
 Recognize that companies move from managing an internal value chain
to operating along a value network.
Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2nd edition, © Pearson Education Limited 2008
Slide 4.4
Exhibit 4.1 Distinctive e-business competencies result from
the combination of unique resources and capabilities
Resources
Tangible
resources
(Equipment,
location, ...)
Intangible
resources
Capabilities
The ability to
deploy resources
by co-ordinating
them through
• Structures
• Processes
• Systems
Strategic importance
• Valuable
e-Business
• Unique
competencies
• Hard to imitate/
substitute
• Valuable across different
products/markets
(Technology, knowhow, brand, ...)
Build
resources
Utilise
resources
Source: Adapted from H. Hungenberg (2006), p. 143.
Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2nd edition, © Pearson Education Limited 2008
Slide 4.5
Exhibit 4.2 The core competence approach cuts across
different functional areas within a firm
Inbound
logistics
Oper
ations
Outbo
und
logisti
cs
Demand and supply processes
Mark
eting
and
sales
Aftersales
servic
es
Service processes
New product development processes
Etc.
Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2nd edition, © Pearson Education Limited 2008
Slide 4.6
The following criteria should be used when including specific
activities in a company analysis
An activity should:
Display different
economics
For instance, the development activity of a new software program
displays very large economies of scale since the software can be
replicated at a negligible cost.
Provide high
differentiation potential
These are activities that can greatly increase tangible and intangible
consumer benefits, such as product and service quality, convenience
and reputation.
Present sizeable costs
These are activities that add significantly to the overall cost structure
of the firm.
Analyzing the internet-impacted value chain
Source: See M. Porter (1998).
Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2nd edition, © Pearson Education Limited 2008
Slide 4.7
Exhibit 4.3 A company’s value chain consists of distinct valueadding activities
Support
activities
Firm infrastructure
Human resource management
Technology development
Procurement
Inbound
logistics
Operations
Outbound
logistics
Marketing
and sales
After-sales
services
Primary
activities
Source: Adapted from M. Porter (1998)
Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2nd edition, © Pearson Education Limited 2008
Slide 4.8
Exhibit 4.4 The Internet impacts all activities in the value chain
Firm Infrastructure
• Web-based, distributed financial and ERP systems
• On-line investor relations (e.g. information dissemination, broadcast conference calls)
Human resource management
• Self-service personnel and benefits administration
• Web-based training
• Internet-based sharing and dissemination of company information
Technology development
• Collaborative product design across locations and among multiple value-system participants
• Knowledge directories accessible from all parts of the organisation
• Real-time access by R&D to online sales and service information
Procurement
• Internet-enabled demand planning
• Other linkage of purchase, inventory, and forecasting systems with suppliers
• Direct and indirect procurement via marketplaces, auctions and buyer-seller matching
Web-distributed supply chain management
Source: Reprinted from M. Porter (2001)
Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2nd edition, © Pearson Education Limited 2008
Slide 4.9
Exhibit 4.4 The Internet impacts all activities in the value chain
(Continued)
Inbound logistics
• Real-time integrated
scheduling, shipping,
warehouse
management, demand
management &
planning, and
advanced planning &
scheduling across the
company and its
suppliers
• Dissemination through
out the company of
real-time inbound and
in-progress inventory
data
Operations
• Integrated information exchange,
scheduling and
decision making in
in-house plants
and components
suppliers
Outbound logistics
• Real-time transaction of
orders
• Automated customerspecific agreements
and contract terms
• Customer and channel
access to product
development and
delivery status
• Collaborative
integration with
customer forecasting
systems
• Integrated channel
management
Marketing and sales
• Online sales channels
including web sites and
marketplaces
• Real-time inside and
outside access to
customer information,
product catalogues,
dynamic pricing,
inventory availability,
online submission of
quotes, and order entry
• Online product
configurators
• Customer-tailored
marketing via customer
profiling
After-sales service
• Online support of
customer service
representatives
• Customer selfservice via websites
and intelligent
service request
processing
• Real-time field
service, access to
customer account
review, work-order
update, etc.
Web-distributed supply chain management
Source: Reprinted from M. Porter (2001)
Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2nd edition, © Pearson Education Limited 2008
Slide 4.10
Exhibit 4.5 The virtual value chain illustrates how information
captured in the physical value chain can be used to develop
new markets
Customer
identification
Purchasing
process
Logistics
Physical
value chain
Etc.
Gather
Organise
Data
Data
Data
Data
Select
Synthesise
Distribute
Customer
identification
information
Purchasing
information
Logistics
information
Etc.
Virtual
value chain
New customers
New products
New
markets
New services
Source: Adapted from A. Enders and T. Jelassi (2006), pp. 31–44.
Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2nd edition, © Pearson Education Limited 2008
Slide 4.11
Exhibit 4.6 The ICDT model describes the four main usage
dimensions of the Internet in the virtual market space
The market space
Virtual
information
space
Virtual
communication
space
Traditional
marketplace
Virtual
distribution
space
Virtual
transaction
space
Selecting activities for online interaction with customers - the ICDT Framework
(Information, Communication, Distribution, and Transaction)
Source: Adapted from A. Angehrn (1997), pp. 38-47.
Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2nd edition, © Pearson Education Limited 2008
Slide 4.12
Exhibit 4.7 The value network includes numerous partners
with differing functions
Strategic core value chain partners
Inbound logistics
Manufacturing
Admin., e.g.
travel
Upstream
value chain partners
Downstream
value chain partners
Value chain integrators
Suppliers
Fulfilment
Core value chain
activities
Buy-side
intermediaries
Sell-side
intermediaries
Value chain integrators
Finance
Human
resources
Admin., e.g.
travel
Non-strategic service partners
Source: Adapted from D. Chaffey (2007), p.282
Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2nd edition, © Pearson Education Limited 2008