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

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Evaluating strategies for e-business change In truth very few examples can be found of organizations who apply a fully comprehensive approach to measuring value – particularly in regard to intellectual assets. Whatever the approach, consideration should be given to the organizational level of implementation. Generally it is most successful at the smallest replicable unit in the organization. This can be a process rather than a functional department. Micro-units permit the highest possible degree of segmentation, strategic fine-tuning, value added and customer satisfaction at the lowest cost. The larger the organization the more refined are these replicable units and the greater their leverage for creating added value. 8.6 Value measurement 8.6.1 Strategic value analysis (SVA) Competitive advantage in the marketplace ultimately derives from providing better customer value for equivalent cost or equivalent customer value for a lower cost – the standard differentiation or lower cost strategic choice. Occasionally, but rarely, a company achieves both by providing better value at a lower cost such as in the case of Microsoft with Windows 95. Regardless of strategic focus the organization needs to measure the added value across the whole value chain to determine exactly where in the chain customer value can be enhanced or costs lowered. This includes linkages upstream as well as downstream in the overall value alliance. The value chain analysis will break down the chain from basic raw materials to end-use customers into strategically relevant activities in order to understand the behaviour of costs and the sources of differentiation. Since no two companies compete in exactly the same set of markets with exactly the same set of suppliers, the positioning within the overall value chain for each company is unique. SVA is a technique for quantifying business issues and opportunities across the entire value chain for an industry and differs in two important ways from traditional business analysis: � SVA disaggregates activities into the fundamental building blocks of the full value chain, from suppliers to consumers, and then groups these activities consistent with the way markets actually work. � SVA evaluates each stage of the chain on an economic value basis eliminating problems caused by historical cost, transfer prices and accrual-based accounting. 179
e-Business Strategies for Virtual Organizations In order to determine whether SVA would be a useful framework for strategic analysis in your organization there are four tests that can be applied: � Are there new or emerging players in the industry (within any part of the value chain) who may be more successful than existing players? � Are these companies positioned differently in the value chain from current players? � Are new market prices emerging across segments of the value chain? Are these markets sufficiently deep to reflect arm’slength trading? � If we used these market prices as transfer prices in our company would it fundamentally change the way that the major operating units behave? If the answer to any of these questions is ‘yes’ then SVA will be of far greater benefit than a standard ‘value-added’ (revenues minus purchases) approach. Applying these four tests will provide an explanation of the relative position of your company in an industry and then can be used to guide a plan for management action with regard to overall structure, markets and assets and reporting relationships most likely to succeed in specific parts of the industry. In this way SVA is uniquely helpful in understanding restructuring processes that may be required in periods of dramatic change. The next step is to evaluate a specific e-business opportunity. 8.7 Identifying the economics of e-business 180 For an organization considering whether to enter into a new e-business value proposition a simple matrix such as that suggested by Riggins (1999) can provide the first step. This framework seeks to display, in a simple form, how factors combine to allow a single organization to plot itself in respect of the opportunities offered by contemporary e-business. The value of this matrix lies in the fact that each business can allocate their own value and weighting to the factors leading to comfortable development of their enterprises, and position themselves accordingly. The EC Value Grid offers a means to order and categorize the different features offered by forms of online storefronts – to use the grid, managers are recommended first to determine which of the five dimensions of commerce to target with an online presence.
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e-Business Strategies for Virtual O
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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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Figure 3.10 Virtual alliance framew
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Figure 3.11 Virtual organizational
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References e-business models for vi
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IS planning strategies for emerging
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Figure 4.1 The evolution of IS/IT p
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Figure 4.3 A framework for SISP (Wa
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Figure 4.4 Planning adopts a busine
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Figure 4.5 Interconnected ecologies
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Figure 4.6 The interrelationships b
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4.8 Conclusion IS planning strategi
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References IS planning strategies f
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Moving from e-business to i-busines
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Globalization and e-business strate
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Adoption and deployment of online i
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Table 6.1 Online business models On
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Figure 6.2 VIM strategy Globalizati
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Page 220 and 221: 9.9 Summary Outsourcing, partnering
Page 222 and 223: References Outsourcing, partnering
Page 224 and 225: e-business strategies in the virtua
Page 242 and 243: 10.10 Summary e-business strategies
Page 244 and 245: 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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