HEC Paris, April 2013
Group 5, Section 21
The emergence of e-business is radically changing almost all industries ranging from retail to media. An e-business process accomplishes a given business task by using digital technologies, often based on the Internet. This can be any business tasking such as procurement, sales, HR, or other admin tasks. An e-business is a company where a significant part of its business is based on the use of e-business processes. e-Business strategy, therefore, is any particular business strategy that deals with e-business processes and / or positioning of an e-business or a company in an industry that has been significantly changed by the emergence of e-business. When examining such e-business strategies and the new ways in which companies compete we can see that some industries have been drastically changed, which poses the question of whether traditional strategy frameworks are still useful and relevant in analyzing them, as new ways of competing become successful. In this report, we take account of the literature analyzing the effects of e-business processes on companies and then analyze whether the existing framework of competitive forces, comparative advantage and positioning still applies. We will not only conclude that the framework remains unchanged, as only the parameters have changed and all new developments can be explained in the existing frameworks, but also argue that traditional industry analysis is all the more important for understanding the successes and failures in the realm of e-business.
There is a large body of literature that suggest that the implementation of e-business processes leads to higher efficiency, payoffs, reaction speeds, better communication, and lower cost. We will now go through some of these studies and elaborate on their reasoning.
It is widely acknowledged that the rapid evolution of Information and Communication technologies has had a great impact in the reshaping of businesses´ strategies. In order to fuel this change, over the last decades firms have implemented different tools and solutions through the use of Internet technologies, each of them implying different goals, benefits and drawbacks. Nevertheless, it is important to bear in mind that “A coherent e-business strategy concerns both the right choice of tools and solutions according to the specific aims, goals and context of the application” (Soliman and Youssef, 2001), and that “the coherence of these choices with other organizational and managerial tools used to integrate the company’s processes.” (Graham and Hardaker, 2000) Consequently, in order for companies to seek the appropriate application and use of the Internet based tools it becomes necessary to define a classification among them. In this context, the literature highlighted the following categories concerning the use of the Internet: * e-Commerce (Brynjolfsson and Smith, 2000) – support to sales, distribution and customer service processes, representing the adoption of e-business in downstream relationships. * e-Procurement (De Boer et al., 2002) – support to sourcing, procurement, tendering, and order fulfilment processes in order to manage upstream relationships with suppliers * e-Operations – supporting demand and capacity planning, forecasting and internal supply chain integration, i.e. the use of the Internet in the operational activities across the company value chain. In the specific context of Supply Chain Management, e-business strategy has been referred as the way Internet tools are selected and used in relation to the needs of integration, “E-business is particularly important for the supply chain literature as a consequence of the increasing need to integrate activities and information flows and to optimize the processes not only at the single company level, but also at the level of inter-company processes.”...