Reconsidering the source of value of e-business strategies
Reconsidering the source of value of e-business strategies
Tse T. Strategic Change, May 2007, Vol. 16 No. 3, Start page: 117, No. of pages: 10
Purpose – To revisit recommendations on e-business strategy within the research literature. Design/methodology/approach – Observes that the source of value creation in e-business is still not fully understood. Points out that many of the companies cited in earlier studies as exemplars of best practice have subsequently disappeared or radically reduced the extent of their operations. Describes and comments on three value drivers associated in the literature with pure-play e-commerce strategy: transaction costs, lock-in and novelty. Examines the strengths attributed to the clicks-and-mortar (CAM)business model in earlier research, commenting on the suggestion that it confers advantages that pure Internet firms cannot achieve, including cost savings, new value-adding services and the conversion of existing customers. Summarizes the intrinsic problems and issues associated with these different e-commerce strategies and considers what e-retailers can do to formulate more successful strategies. Points out that not all consumers take up new technologies and that they will not buy online when it is incompatible with their lifestyle. Adds that many products and services require consumer expertise and that whilst consumers may be willing to buy simple products online, many still prefer to visit a human adviser to assess more complicated offerings, in order to compensate for their own lack of expertise. Concludes that truly differentiated strategies are created by using technologies to empower human relationships, rather than by simply putting Internet technology and human factors together. Originality/value– Suggests that the key challenges for e-business retailers involve finding new ways to integrate technologies and human factors.ISSN:1086-1718Reference: 36AR430DOI: 10.1002/jsc.788
Keywords: Corporate strategy, Customer relations, Internet, Strategic choice
