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

Evaluating strategies for e-business change
Dell Computer is a good and often quoted example of a supplier
that uses electronic trading networks. It does this to collect and
analyse customer orders and to control the creation and delivery
of made-to-order goods to their customers, normally faster than
conventional competitors and with a rich layer of value in the
form of information supplied.
Not only can the product advertised be supplied more effectively
using attention to personal demand and circumstance using
electronic information flows, but the potential also arises for the
sensing and testing of demand for new goods and services that
can be exploited by electronic means. Would a customer already
on a website react positively to tailored news casting? Database
access? Free chips in an online casino? And so on.
We readily see that new electronic information flows dramatically
alter sales and distribution channels, having impact on
two categories of primary flows: physical goods and virtual
goods.
The physical goods may be advertised and ordered online yet
delivered traditionally, whereas virtual goods may be advertised,
customized, ordered, paid for, and delivered online
without the customer moving from his/her chair. In the first
category e-business comes into its own in markets in which
information (for example, an array of choice) forms a significant
component of value, rather than in commoditized and wellknown
products.
The second category consists of products that can be digitized –
books, banking and investment transactions, insurance and
travel contracts, off-course betting and so on. For virtual goods
the world of e-business provides a new distribution channel, for
example by means of the Web. We do not need to visit the
racecourse to place a bet or collect our winnings if we have a
remote terminal or an account which can be accessed by our
electronic device – be it phone or PC. This category is obviously
in use and examples will be familiar to you all: you may even
have downloaded your own selection of music from a website,
checked online travel agents or investigated online banking.
While visible to the consumer, these are but tiny fragments of
the vast amount of business-to-business currently conducted
electronically and changing the ways in which firms think and
operate.
Are there any drawbacks to this apparently simple way of
transforming the economics of doing business? Of course there
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