E-business: Marketing and Virtual Value Chain

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1) Explain whether competence-based thinking is more suitable for e-business strategy formulation than the activity-based approach outlined in the value chain concept.

Competence-based thinking focuses heavily on the resources and capabilities of a firm. It is thought to take a resource-based approach towards creating competitive advantage (Core competence, 2010). It considers how the different recourses and capabilities of a firm are used in conjunction with one another. Rather than looking at the individual activities of a firm, this approach evaluates the processes of a firm and how they can be used to create strategies that provide superior value to customers.
The activity-based approach, on the other hand, measures the value and competitive advantage of a firm by analyzing individual activities in the firm’s value chain. Activities identified in the firm’s value chain include those activities that can provide a competitive advantage for a firm; such activities should have economics of scale or scope
Competency-based thinking allows companies to align its strengths with the business opportunities and eliminate weaknesses in order to avoid threats creates a ‘strategic fit’ between its internal competencies and the external environment.
The competence-based thinking allows businesses to investigate and understand the entire picture of the organizational structures and actual practices in order to understand the current situation. It can improve and enhance the current practice and further plan for the future.
Competency development can take place over a period of time if the company has measures in place to ensure that employees learn and develop the competencies as their careers progress. Competency-based thinking in e-business strategy can be an effective model for businesses to use also.
Small business owners must be able to develop technical competencies to thrive in the field of e-business. One of the primary barriers that many small business



References: Jelassi, T., & Enders, A. (2008). Strategies for e-business: Creating value through electronic and mobile commerce. (2nd ed.). London, UK: Prentice Hall.

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