COMP7880: E-Business Strategies
Sustaining competitive advantage
Dickson K.W. Chiu
PhD, SMIEEE, SMACM, Life MHKCS
Jelassi & Enders: Chapter 6
1
Our Roadmap
Mobile e-commerce strategy
E-business strategy
Strategy
Strategy formulation
implementation
12
Strategic
analysis
3
External
analysis
9
5
Internal
organisation
Strategy
options
Opportunities/
threats
Strengths/
weaknesses
4
Internal
analysis
6
Sustaining
competitive
advantage
8
7
Exploring
new market
spaces
Creating and
capturing
value
10
13
Interaction with
suppliers
Implementation
11
Interaction with
users/customers
COMP7880-SCA-2
Dynamic e-business strategy model
Consistency
≠ Static
Source: Adapted from description in Kalakota and Robinson (2000)
COMP7880-SCA-3
Barriers against imitation
Imitator
Requirements for successful
imitation
1
Must be able to identify
competitive superiority
2
Must be willing to imitate
3
Must be able to understand
sources of competitive
advantage
4
Must be able to build/acquire
necessary resources
Incumbent
Barriers against successful imitation
• Withhold information about profitability
• Forgo short-term profits for long-term
success
• Deterrence: signal promise of retaliation
• Make commitments to make threat credible
• Pre-emption: exploit all available investment
opportunities/secure access to resources
• Tacit knowledge: rely on skills,
processes or culture/resources that
are implicit
• Causal ambiguity: rely on a complex,
multidimensional mix of sources
• Base differentiation on resources
that are
rare/immobile/contracted
• Exploit-time lags
Source: Adapted from H. Hungenberg (2006), p. 251.
COMP7880-SCA-4
Performance
Disruptive innovations meeting
demands of mainstream customers
Most
demanding
customers
Sustaining
innovations
Performance
demanded by
mainstream
customers
Disruptive
innovations
Least demanding
customers
Time
Source: Adapted from C. Christensen and M. Raynor (2004), p. 33.
COMP7880-SCA-5
Framing during
resource commitment
Overcoming organizational rigidities
Threat
Opportunity
Rigid plan,
Flexible plan,
high commitment high commitment
Rigid plan,
low commitment
Threat
Flexible plan,
low commitment
Opportunity
Framing during implementation
Source: Adapted from C. Gilbert (2006), p. 152
COMP7880-SCA-6
Determine threat of a disruptive
innovation
Non-served
customers
Over-served
customers
Disruptiveness
to competitors
Is there a large group of people who previously did not
have the money or the skills to purchase the product
themselves? Did customers have to go to a central,
inconvenient location to purchase the product?
Are there customers at the bottom end of the market
who would buy the same product with fewer features for
a lower price? Is it possible to build a profitable business
model while keeping down prices?
Is the innovation disruptive relative to all relevant rival
companies that are currently competing in that
market?
COMP7880-SCA-7
E-business strategy changes based on
SWOT Analysis
COMP7880-SCA-8
Dealing with disruptive innovations
Not
responding at
all
Not responding is quite often based on ignoring or not
properly assessing the underlying facts.
Migrating/
harvesting
The migration strategy is based on a conscious decision to ‘milk
existing resources’.
Defending
Straddling
Switching
Leapfrogging
Source: See P. Ghemawat (2005), p. 106.
When defending their existing markets, incumbents need to
improve their business model so that they are either able to
lower their prices or increase the benefits they provide to
their customers
This strategy attempts to combine the best of both worlds.
While this option might seem to be the most promising at
first sight, it also entails major risks.
This option entails a complete switch to the new business
model. Yet, it is also the riskiest of all options, since there is
always a high degree of uncertainty associated.
Through this approach, a company tries to out-substitute the
substitution. From a long-term strategic perspective, this option
is highly attractive, yet it requires a very deep understanding of
how technology and market demand will evolve.
COMP7880-SCA-9
Alternative positioning for
services / products / price
COMP7880-SCA-10