[8] 2002 e-business-strategies-for-virtual-organizations

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Moving from e-business to i-business strategies in virtual markets Retailer’s demand chain Assortment plan Offer to purchase Assortment plan Offer to inventorymanage Assortment plan Offer to plan Inventory manage Inventory manage Inventory manage Retail Figure 5.5 The VOPs (after Holstrom et al. 2000) The further back in the supply chain the supplier moves the OPP, the more steps there are to complete without disruption and the more difficult it becomes to fulfil orders promptly. The advantage to the supplier of this approach depends on the amount of cost savings effected by lower inventory, on the one hand, compared with the reduction in sales that may be brought about by longer delivery times and higher total costs for customers, on the other. Customers and suppliers never benefit equally. The value offering point (VOP) – the second place where the demand and supply chains meet – is where the supplier fulfils demand in the customer’s demand chain. Moving the VOP back in the demand chain largely benefits the customer, requiring more work from the supplier. There are three principal VOPs. In the conventional buyer–seller relationship, the VOP is the purchasing department, which accepts an ‘offer to purchasing’ by choosing the supplier and deciding when goods are needed. An ‘offer to inventory management’ moves the VOP further back in the demand chain: by carefully monitoring the customer’s inventory levels, a supplier can cut down on stock that is unlikely to sell and ensure that the customer never runs out of Purchase Purchase Purchase Warehouse Warehouse Distribute Distribute Distribute Manufacturer’s supply chain Pack Pack Pack Manufacture Manufacture Manufacture 99
e-Business Strategies for Virtual Organizations fast moving goods. An ‘offer to planning’ moves the VOP back to merchandising or production. As the VOP is moved back so this means more work for suppliers and greater benefits for retailers or even end users. The fourth VOP is the ‘offer to end user’, such as Dell Computer’s direct-sales model for business clients. Rather than fulfil orders from wholesalers (an offer to purchasing), Dell went all the way back in the demand chain to the end consumer by fulfilling orders for customized PCs – complete with software and network configuration. By coordinating changes in both the supply and demand chains a supplier can raise its customers’ efficiency, as well as its own, i.e. simultaneous movements of the OPP and VOP will be of mutual benefit to customer and supplier. Effectively, this can result in the development of a virtual value chain. 5.11 Virtual value chains 100 An e-business must then consider the following two questions: � Can we increase the number of electronic connections, simplify interorganizational processes and at the same time discover ways to shrink, speed up, or virtualize the value chain? � What is likely to happen with our wholesalers, distributors, or retailers? Are they going to be disintermediated or are they likely to survive by transforming their businesses into new types of intermediaries operating in a neutral market? One obvious scenario is that the old value chain gets smaller and so more efficient as you bypass some of the steps in the supply chain (for example, as currently happens with the online delivery of software and other products that can be digitized). In some cases as one cuts out previous links in the supply chain, new intermediaries will arise (for example, selling may move to an industry-wide portal or vortal to reach a larger market). This dynamic reconstruction of intermediaries can also lead to dynamic allocation of intermediaries where the channels become invisible and so creating the virtual value chain. The value chain of the firm does not exist in isolation but exists as part of an industry value system and the whole value system will consist of the value chains of suppliers, customers and competitors. This can become the model for the virtual organization as it links electronically into value networks.
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e-Business Strategies for Virtual O
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Contents Computer Weekly Profession
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Contents 6 Globalization and e-busi
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Contents 11.6 The increasing power
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Computer Weekly Professional Series
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Authors’ Preface There are dozens
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Authors’ Preface model will there
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Authors’ Preface alliances, bette
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1 e-business and the virtual organi
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e-business and the virtual organiza
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Figure 1.2 e-business and the virtu
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1.5 e-business e-business and the v
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Figure 1.3 e-business and the virtu
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Figure 1.4 Virtual objects, Scholz
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Characteristics of the virtual orga
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Figure 2.1 Formation of business al
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� empowerment of staff; Character
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e-business models for virtual organ
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3.4 Models of efficient response e-
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Figure 3.4 Star alliance model e-bu
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Figure 3.6 Market alliance model Fi
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Page 70 and 71: Figure 3.10 Virtual alliance framew
Page 72 and 73: Figure 3.11 Virtual organizational
Page 74 and 75: References e-business models for vi
Page 76 and 77: IS planning strategies for emerging
Page 80 and 81: Figure 4.1 The evolution of IS/IT p
Page 82 and 83: Figure 4.3 A framework for SISP (Wa
Page 86 and 87: Figure 4.4 Planning adopts a busine
Page 88 and 89: Figure 4.5 Interconnected ecologies
Page 90 and 91: Figure 4.6 The interrelationships b
Page 94 and 95: 4.8 Conclusion IS planning strategi
Page 96 and 97: References IS planning strategies f
Page 98 and 99: Moving from e-business to i-busines
Page 130 and 131: Globalization and e-business strate
Page 134 and 135: Adoption and deployment of online i
Page 136 and 137: Table 6.1 Online business models On
Page 140 and 141: Figure 6.2 VIM strategy Globalizati
Page 162 and 163: 7 Developing knowledge-based strate
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Developing knowledge-based strategi
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8 Evaluating strategies for e-busin
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Figure 8.2 Fitness landscapes Evalu
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Evaluating strategies for e-busines
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Table 8.1 Information economics - v
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Customer view Whatisour image? Eval
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Table 8.6 Matrix for preparing to m
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9 Outsourcing, partnering and the v
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Outsourcing, partnering and the vir
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Figure 9.2 Outsourcing, partnering
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9.9 Summary Outsourcing, partnering
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References Outsourcing, partnering
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e-business strategies in the virtua
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10.10 Summary e-business strategies
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11 Creating virtual cultures for gl
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Creating virtual cultures for globa
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Four stages of market evolution Mar
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Figure 11.4 The four paths of evolu
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References Creating virtual culture
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Advanced knowledge, see Knowledge A
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[8] 2002 e-business-strategies-for-virtual-organizations

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