The Transforming Power of Business-to-Business Electronic Business
©2002
Diplomarbeit
179 Seiten
Zusammenfassung
Abstract:
At the beginning of the 21st century Internet-based B2B e-Business is the ultimate driving force and transforming power in traditional business - the Old-Economy - and its continuous evolution toward a truly networked and globalized economic system. This paper develops a holistic definition and classification of e-Business in general and B2B e-Business in particular. It provides concepts to describe and categorise the development of B2B e-Business, the emerging opportunities of B2B e-Business, and how B2B e-Business shapes and transforms the goals, strategies, structures and processes of a traditional firm in the Old-Economy. The paper concludes with a discussion of selected strategic issues of B2B e-Business. The goal is to show that B2B e-Business means the advent of the next generation of business, just as the industrialisation did 200 years ago.
Table of Contents:
1. Introduction
1.1 Internet based B2B e-Business -The rise of a new economic era
1.1.1 The Automotive Industry- the case for B2B e-Business
1.1.2 A lack of common definitions and categorisations
1.2 Objectives
1.3 Limitations
2. Methodology
2.1 Research Background
2.2 Research Approach
2.2.1 Inductive vs. deductive research approach
2.2.2 Qualitative vs. quantitative research approach
2.3 Research Methods
2.3.1 Desk research - document analysis
2.3.2 Field Research - qualitative interviews
2.3.2.1 Unstructured interview
2.3.2.2 Semi-structured interview
2.4 Data Sources
2.4.1 Secondary data
2.4.2 Primary data
2.5 Data Analysis
2.6 Frame of reference
3. Porters value chain and value system
3.1 Value chain
3.2 Value system
3.3 Supply chain
3.4 Demand chain
3.5 Value chain & value System vs. supply chain & demand chain
4. e-Business - The e-Volution of business
4.1 Internet Revolution vs. e-Business Evolution
4.1.1 The case for incremental change
4.2 e-Business - A change of paradigms
4.2.1 The birth and death of the e
4.2.2 The EURO Metaphor
4.3 B2B e-Business - the driving force of e-Business
4.4 B2B e-Business - an innovative and transforming power
5. e-Business - holistic approach
5.1 The nature of e-Business
5.2 The evolutionary context of e-Business
5.3 The reversion of the traditional value chain and value system
5.4 The 4 generic dimensions of e-Business - A classification
5.4.1 Business-to-Business e-Business
5.4.1.1 B2B e-Business - integrating the […]
At the beginning of the 21st century Internet-based B2B e-Business is the ultimate driving force and transforming power in traditional business - the Old-Economy - and its continuous evolution toward a truly networked and globalized economic system. This paper develops a holistic definition and classification of e-Business in general and B2B e-Business in particular. It provides concepts to describe and categorise the development of B2B e-Business, the emerging opportunities of B2B e-Business, and how B2B e-Business shapes and transforms the goals, strategies, structures and processes of a traditional firm in the Old-Economy. The paper concludes with a discussion of selected strategic issues of B2B e-Business. The goal is to show that B2B e-Business means the advent of the next generation of business, just as the industrialisation did 200 years ago.
Table of Contents:
1. Introduction
1.1 Internet based B2B e-Business -The rise of a new economic era
1.1.1 The Automotive Industry- the case for B2B e-Business
1.1.2 A lack of common definitions and categorisations
1.2 Objectives
1.3 Limitations
2. Methodology
2.1 Research Background
2.2 Research Approach
2.2.1 Inductive vs. deductive research approach
2.2.2 Qualitative vs. quantitative research approach
2.3 Research Methods
2.3.1 Desk research - document analysis
2.3.2 Field Research - qualitative interviews
2.3.2.1 Unstructured interview
2.3.2.2 Semi-structured interview
2.4 Data Sources
2.4.1 Secondary data
2.4.2 Primary data
2.5 Data Analysis
2.6 Frame of reference
3. Porters value chain and value system
3.1 Value chain
3.2 Value system
3.3 Supply chain
3.4 Demand chain
3.5 Value chain & value System vs. supply chain & demand chain
4. e-Business - The e-Volution of business
4.1 Internet Revolution vs. e-Business Evolution
4.1.1 The case for incremental change
4.2 e-Business - A change of paradigms
4.2.1 The birth and death of the e
4.2.2 The EURO Metaphor
4.3 B2B e-Business - the driving force of e-Business
4.4 B2B e-Business - an innovative and transforming power
5. e-Business - holistic approach
5.1 The nature of e-Business
5.2 The evolutionary context of e-Business
5.3 The reversion of the traditional value chain and value system
5.4 The 4 generic dimensions of e-Business - A classification
5.4.1 Business-to-Business e-Business
5.4.1.1 B2B e-Business - integrating the […]
Leseprobe
Inhaltsverzeichnis
ID 7651
Wenna, Christoph: The Transforming Power of Business-to-Business Electronic Business
Hamburg: Diplomica GmbH, 2004
Zugl.: Johannes Kepler Universität Linz, Universität, Diplomarbeit, 2002
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Diplomica GmbH
http://www.diplom.de, Hamburg 2004
Printed in Germany
Christoph Wenna
The Transforming Power of Business-to-Business Electronic Business
ABSTRACT
University: Johannes Kepler University of Linz
Department: Centre for Research in International Management
Tutor:
o.Univ.-Prof. Dr. Lars Håkanson
Author: Christoph
Wenna
Work:
Diploma Thesis
Pages: 177
Date:
March 2002
Work Title: The transforming power of business to business electronic business
At the beginning of the 21
st
century Internet-based B2B e-Business is the ultimate
driving force and transforming power in traditional business - the Old-Economy - and
its continuous evolution toward a truly networked and globalized economic system.
This paper develops a holistic definition and classification of e-Business in general
and B2B e-Business in particular. It provides concepts to describe and categorise the
development of B2B e-Business, the emerging opportunities of B2B e-Business, and
how B2B e-Business shapes and transforms the goals, strategies, structures and
processes of a traditional firm in the Old-Economy. The paper concludes with a
discussion of selected strategic issues of B2B e-Business. The goal is to show that
B2B e-Business means the advent of the next generation of business, just as the
industrialisation did 200 years ago.
Johannes Kepler University of Linz Austria
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Christoph Wenna
The Transforming Power of Business-to-Business Electronic Business
ACKNOWLEDGEMENT
This book is dedicated to my family, in particular to my parents:
Leo and Renate Wenna
My special thanks go to my friends:
Lucia Del Chicca
José A. Campos Hernández
Johannes Kepler University of Linz Austria
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Christoph Wenna
The Transforming Power of Business-to-Business Electronic Business
TABLE OF CONTENT
1 Introduction
9
1.1
Internet based B2B e-Business
The rise of a new economic era
9
1.1.1
The Automotive Industry the case for B2B e-Business
12
1.1.2
A lack of common definitions and categorisations
15
1.2 Objectives
17
1.3 Limitations
18
2 Methodology
20
2.1 Research
Background
20
2.2 Research
Approach
22
2.2.1
Inductive vs. deductive research approach
23
2.2.2
Qualitative vs. quantitative research approach
24
2.3 Research
Methods
25
2.3.1
Desk research document analysis
26
2.3.2
Field Research qualitative interviews
26
2.3.2.1
Unstructured interview
27
2.3.2.2
Semi-structured interview
28
2.4 Data
Sources
29
2.4.1 Secondary
data
29
2.4.2 Primary
data
31
2.5 Data
Analysis
32
2.6
Frame of reference
32
3 Porters value chain and value system
34
3.1 Value
chain
35
3.2 Value
system
38
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The Transforming Power of Business-to-Business Electronic Business
3.3 Supply
chain
40
3.4 Demand
chain
40
3.5
Value chain & value system vs. supply chain & demand chain
41
4 e-Business The e-Volution of business
43
4.1
Internet Revolution vs. e-Business Evolution
46
4.1.1
The case for incremental change
50
4.2
e-Business A change of paradigms
52
4.2.1
The birth and death of the e
56
4.2.2
The EURO Metaphor
58
4.3
B2B e-Business the driving force of e-Business
60
4.4
B2B e-Business an innovative and transforming power
65
5 e-Business A holistic approach
68
5.1
The nature of e-Business
71
5.2
The evolutionary context of e-Business
72
5.3
The reversion of the traditional value chain and value system
75
5.4
The 4 generic dimensions of e-Business A classification
77
5.4.1 Business-to-Business
e-Business
80
5.4.1.1
B2B e-Business integrating the value system
82
5.4.2 Business-to-Consumer
e-Business
84
5.4.3 Business-to-Direct-Environment e-Business
85
5.4.4 Intra-Business
e-Business
86
5.4.4.1
IB e-Business integrating the value chain
89
5.4.5 e-Business
91
5.5
Internet & Co. Networks are taking over the business world
92
5.5.1 Intranet
93
5.5.2 Extranet
98
5.5.3 Internet
100
5.5.4
Portals Where you get it all in one
100
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5.6
e-Business vs. e-Commerce
102
5.6.1 e-Commerce
103
5.6.2 e-Business
103
5.7
11 assumptions for the e-Business Transformation
104
5.8
Global Policy Directives for e-Business
106
6 From fragmented to integrated e-Business
108
6.1
The e-Business Integration Matrix
110
6.1.1
The intra-organisational dimension
111
6.1.1.1
Fragmented IB e-Business
111
6.1.1.2
Integrated IB e-Business
112
6.1.2
The inter-organisational dimension
112
6.1.2.1
Fragmented B2B e-Business
112
6.1.2.2
Integrated B2B e-Business
113
6.2 The
past
117
6.3
The present and the future
120
7 B2B e-Business a cornucopia of new opportunities
126
7.1
General opportunities
127
7.2
e-Procurement B2B buy-side opportunities
128
7.2.1
Human-to-human interaction
131
7.2.2 Human-to-application
interaction
131
7.2.3 Application-to-human
interaction
131
7.2.4 Application-to-application interaction
132
7.2.5
e-Procurement Potential benefits for customers AND suppliers 132
7.2.5.1
The customer perspective
133
7.2.5.2
The supplier perspective
136
7.2.6 e-Procurement
solutions
137
7.3
The network effect
140
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The Transforming Power of Business-to-Business Electronic Business
8 A framework for e-Business transformation
142
8.1
Four ways to enter the e-Economy
142
8.1.1
Path 1: New processes
145
8.1.2
Path 2: New structure + new processes
147
8.1.3
Path 3: New strategy + new structure + new processes
149
8.1.4
Path 4: New goals + new strategy + new structure
+ new processes
151
8.2
Adaptation vs. disruption
151
8.2.1
Porters generic strategies
152
8.2.2 Ansoffs
Product-Market-Matrix
154
8.3
Efficiency vs. strategy
156
8.3.1 Efficiency
focus
157
8.3.2 Strategy
focus
158
8.4
The e-Business Transformation Continuum
159
9 Strategic issues of B2B e-Business
161
9.1
When Old meets New Overcoming the generation clash
161
9.2
The direct environment An important competitive force
162
9.3
B2B e-Business Narrowing down the strategic focus
164
9.4
B2B e-Business The return of strategy
166
9.5
B2B e-Business A new approach to strategic integration
169
10 Appendix
171
10.1
Table of figures
171
10.2 Bibliography
173
10.3 Endnotes
179
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The Transforming Power of Business-to-Business Electronic Business
1 Introduction
The goals of this chapter are:
· Introducing B2B e-Business and its relevance for economic development.
· Presenting the major areas addressed in this paper.
· Presenting the major objectives of this paper.
· Presenting the major limitations for research and discussion.
1.1 Internet based B2B e-Business - the rise of a new economic era
The Internet and its applications are the most ruling and fascinating topics in todays
business world and will stay at the forefront of economic evolution for a long period of
time. Internet technology provides new and frame breaking ways to communicate,
interact, transact, and globalise and hence to create new competitive advantages at
any level of economic activities, nearly equal for businesses all around the world.
"The most powerful thing in the world is an idea whose time has come." (Victor
Hugo)
The widespread acceptance and adoption of the Internet, Extranets and Intranets as
business platforms created a solid foundation for the development of business-to-
business electronic business [B2B e-Business] which enables organisations to lower
costs and improve customer value in dramatic and unprecedented ways (cf.
Timmers, 1999). B2B e-Business heralds the real Internet Revolution in business
the advent of the e-Economy where new ways of collaboration are transforming the
creation of wealth. Constructive destruction and reintegration of traditional value
chains and value systems are leading the way into a networked & globalized
Economy, where modular organisations are competing in virtual markets (Figure
1-1). Customer needs, speed and flexibility are the ultimate rules in an emerging
competitive environment beyond the traditional perception of sectors, industries and
political economies. Traditional borders between people, organisations and nations
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The Transforming Power of Business-to-Business Electronic Business
vanish and electronically integrated value systems start to act and compete virtually
as single corporations. In the long run, B2B e-Business has a direct or indirect impact
on all functional areas and linkages within a value chain and across the respective
value system, i.e. B2B e-Business is shaping and transforming the economy as
whole - on the microeconomic as well as on the macroeconomic level.
Reading these lines, many practitioners immediately would state that this description
is not more than a vague picture of a far future and that the Internet Revolution in
business still remains to be seen. There is no doubt about the fact that it still remains
to be seen. But the reason is that the incorporation of the Internet and Internet
technology into corporate strategies and day-to-day operations is not a revolution
changing the world from one day to another. It is, in fact, an evolutionary process
where trial & error are dominating the development. In this paper this process will be
called e-Business Transformation.
Figure 1-1: Electronic business environment the e-Economy.
Given the fact that we are just at the beginning of this e-Volution, there is an
undeniable need for traditional companies commonly known as the Old-Economy -
to analyse and refocus their goals, corporate strategies, organisational structures,
and business processes toward and around the Internet and its opportunities to gain
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The Transforming Power of Business-to-Business Electronic Business
and sustain competitive advantage. However, there is still a long way to go as for
most companies B2B e-Business is still a terra incognita waiting to be explored.
The following simple but holistic definition of e-Business by Kalakota and Robinson
anticipates the magnitude and complexity of this field and serves well as a foundation
for future research and development:
· e-Business means doing business electronically (2000) .
Consequently:
· B2B e-Business means doing business between firms electronically.
B2B e-Business, as defined in this paper, is a concept based on real and virtual intra-
organisational and inter-organisational networks of people, information, and business
application programs using electronic communication media such as the Internet to
create and execute all possible kinds of communication between business partners
and the corresponding flow of data.
B2B e-Business represents the next stage in the evolution of the commonly held
principle of the division of labour on the microeconomic as well as on the
macroeconomic level. Networks of (small / medium sized / large-scale) highly
specialised and integrated, independent operational modules and networks, in
organisational, technical and legal terms, have started to replace huge, vertically
integrated corporations which have been ruling the business world for more than a
century (cf. Kalakota Robinson, 2000).
Why? At the end of the day the objectives are creating new sustainable competitive
advantages through cutting costs and increasing customer satisfaction and thus
sales. This is a new variety of the classic problem of optimisation. The principles of
constructive destruction standardisation and (re-)integration are the underlying
concepts. The fact that this is done in a rather frame-breaking way is a welcome side
effect but not the ruling idea.
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1.1.1 The Automotive Industry the case for B2B e-Business
The automotive industry has always been a driving force in the field of cutting edge
communication processes, intra-organisational and inter-organisational networking
and process integration. e-Commerce processed via Electronic Data Interchange
[EDI] and Value Added Networks [VAN] has been in use successfully on a large
scale for more than 20 years. Today the automotive industry is again a major driving
force in the development of Internet based e-Business.
The key aspects of e-Business activities in the automotive industry are currently
revolving around the concepts of procurement, cooperative design, development,
and production. Within the areas of product development and manufacturing or
assembling, the concepts of Simultaneous Engineering, Product Data Management
[PDM] and Digital Mock-Up are leading the way. There is a significant trend from
simple stand-alone EDI solutions toward integrated e-Business systems as provided
by SAP, Baan, I2 Technologies etc. Supply chain integration causes reduction in
cycle times and inventories. Real time online information systems inform the
customer e.g. about the capacities of the supplier and the supplier about the trends in
the demand of its customers. Internally the main fields of applications for e-Business
are information systems and knowledge management. Email and workflow systems
support internal and external processes and Tele-Working is already in place or at
least planned in all major operations. (CHB 2, 2001; CHB 3, 2001, Roland Berger,
2000)
The global automotive industry
54 million vehicles per year.
$3 trillion in sales per year.
One out of seven people in the US and Germany make a living of this industry.
Figure 1-2: Facts on the global automotive industry (source: Automobil Cluster OÖ., Linz, Austria).
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Manufacturers, suppliers, lobbies, and associations in the automotive value system
design and implement e-Business standards, strategies, and systems at an ever
increasing pace. The automotive industry and ICT industry have developed various
ways of useful cooperation and interaction since they share a great number of
common interests. The European Network Exchange [ENX] (www.enxo.com) - a joint
Extranet of the European automotive industry - represents a good example for the
new spirit of cooperation, providing a well designed and helpful infrastructure to cope
with the challenges of the e-Economy.
e-Business gives all players in the automotive industry a chance to make
fundamental changes in their approach to the market by considering all members of
the value system. All systems, including, for instance, Enterprise Resource Planning
[ERP], Customer Relationship Management [CRM], Supplier Relationship
Management [SRM], and Product Data Management [PDM] are evolving into e-
Business, resulting in the fact that it is no longer a separate discipline simply focused
on B2C or B2B marketing and sales (cf. Roland Berger, 2000).
Numerous and extensive studies have shown vast potentials to standardise and
streamline logistics, RD, product design, infrastructure, organisational and process
design, procurement, sales, etc. The goal is to integrate people, projects, systems,
departments, supply-chain, and channel partners and customers in order to enhance
the whole value systems ability by fulfilling consumer requirements in a better and
faster way; at the same time, costs are reduced or, at least, kept on the same level.
As concerns the automotive industry supply-chain integration, the use of
standardisation and Internet technology generates reduced costs concerning
planning, process, transaction, and RD while improving planning and RD
processes, reducing cycle-time and vehicle order-to-delivery time, lowering
inventories, improving quality, hence increasing responsiveness to consumer
requirements. These new concepts enable the participants of the automotive value
system to think about a product development cycle of two years compared to five
years only a decade ago and cars built to order within two weeks (Roland Berger,
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The Transforming Power of Business-to-Business Electronic Business
2000). This might sound visionary but we are talking about an unstoppable
development already under way.
1.1.2 A lack of common definitions and categorisations
e-Business, e-Commerce, e-Procurement, and all those other e-terms mean a lot of
different things to many different people. Many diverse, often contradictory definitions
and concepts are turning the life of people involved into a confusing nightmare.
Moreover, this lack of clear definitions curbs the hyper-evolution of e-Business since
it draws an unclear picture of the situation and the emerging opportunities. It is
essential for an effective and efficient e-Business Transformation of traditional firms
to define the concept of e-Business and consequently of B2B e-Business in a clear
and precise manner.
e-Business is about standardisation and automation of communication processes
through value chain and value system integration. Yet, how can this ever work out
sustainably and cost-effectively if people talking to each other have different
perceptions of the words used? How can anyone find reliable sources to take
managerial decisions or conduct serious research about e-Business if there are no
standardised definitions and classifications and no integrated technical language?
The confusion of definitions and the lack of a common language results in various
negative consequences:
· There is not much of a common framework to build on. The wheel often needs
to be reinvented when someone wants start a new e-Project. This is true for
both, research and business.
· This confusion of definitions leads to an imperfect market, opening up the field
for all kinds of people who take advantage of the lack of experience and
information in the Old-Economy. Consequently, this means big business for
ICT and consulting companies. They promote their respective applications and
e-Approach capitalising on this lack of experience and information. This
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The Transforming Power of Business-to-Business Electronic Business
means that huge amounts of capital are being destroyed (no ROI) as
organisations get involved in unstructured and non-strategic e-Projects
· The rapid development and implementation of e-Business has somehow come
to a halt as the road became unclear and the driving forces are being re-
evaluated.
Therefore, there is a strong need for a common set of vocabulary, definitions,
classifications and open standards, i.e. a common language for all participants of the
e-Economy. The goal is to build a global basis to explore, develop, and use the
opportunities e-Business in general and B2B e-Business in particular.
During the research for this paper the major profit and non-profit organisations
started to recognise the importance of this issue and to respond to it. Three of the
first comprehensive and sophisticated projects which are publicly available are:
· RosettaNet, a non-profit consortium of major ICT, electronic components, and
semiconductor manufacturing companies which can be found at
www.rosettanet.org, and
· the Value Chain Mark-up Language website established by Vitria Technology
Inc., at www.vcml.net, and
· the Esprit program operated by the European Union, available at
www.cordis.lu/esprit/home.html.
1.2 Objectives
The interplay of B2B e-Business and corporate goals, strategies, structures and
processes in traditional (Old-Economy) firms is a key issue in cutting-edge e-
Business development. Research on this field has just started to emerge. This paper
is a basic contribution to this discussion. It is meant to provide comprehensive and
pragmatic information for people new to or familiar with e-Business, e-Commerce,
and strategic management and interested or involved in the implementation of B2B
e-Business in traditional firms. Moreover, it is intended to build a foundation and give
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The Transforming Power of Business-to-Business Electronic Business
inspiration for future research and development in this field. To do this the paper has
the following major objectives:
· to integrate the concept of electronic business into the evolution of traditional
business in recent history (mainly item 4),
· to develop a holistic definition and classification of e-Business in general and
B2B e-Business in particular (mainly item 5),
· to develop a concept on how to describe and research the development of e-
Business in general and B2B e-Business in particular (mainly item 6),
· to describe and categorize the emerging opportunities of e-Business and
discuss a selected practical example (mainly item 7),
· to describe and categorize the role of goals, strategies, structures and process
in the implementation of B2B e-Business in a traditional firm (mainly item 8),
· to discuss selected strategic aspects of e-Business and B2B e-Business with
reference to M.E. Porters work (mainly item 9).
1.3 Limitations
This research project has the following limitations:
· The work is focused on the strategic level and it does not elaborate on
technical details as long as they do not have any major impact on the strategic
level.
· Research focuses on B2B e-Business in existing Old-Economy firms. The
foundation of a new business operating in the field of B2B e-Business is a
totally different issue which, however, is not discussed within the scope of this
project.
· The paper covers only selected aspects of electronic business. e-Business
refers to all dimension and activities within a firms value chain. Consequently,
it is not possible to cover the full rage of the topic within a single paper.
· The lack of empirical research. This paper is meant to provide a foundation for
future empirical research. An additional empirical study is the logical
continuation of this work but would have exceeded the scope of this paper by
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The Transforming Power of Business-to-Business Electronic Business
far. However this does not pose significant limitation on the scientific credibility
and practical relevance of the paper.
· Security aspects of implementing e-Business will also be disregarded as on
the one hand "the reliability and security issues associated with the early use
of the Internet have been largely solved to the extent that every business is
now adopting the Internet in one form or another" (cf. Sculley William, 1999,
p.4) and on the other hand dealing with these problems would exceed the
limits of this paper by far.
· The use of a limited number of qualitative interviews with people who have
been randomly chosen among those who were willing to participate in the
study.
· The limited geographical area covered by the paper. The work first of all refers
to the old world and those organisations and national economies which have
sufficient Internet access and the resources to participate in the e-Economy.
· Theory and data used may not be up-to-date because of the constantly
evolving ICT Industry and changing economic circumstances. The Internet is
changing constantly and growing rapidly, therefore, it is hard to present
accurate figures about e.g. electronic commerce.
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2 Methodology
The goals of this chapter are:
· Presenting the background and the evolution of the research.
· Presenting the research approach and methods.
· Presenting the information sources.
· Presenting the classic theories and models used.
In todays ever accelerating and changing business environment even the design and
implementation of a research projects needs to be adjusted to the new requirements
and rules of the e-Economy driven by the Internet, i.e. speed, flexibility, integration,
etc. Hence, a well-chosen research topic and an effective and efficient but flexible
methodology designed in accordance with the points of interest are key to a
successful and value-adding research project.
In order to enhance the understanding of this paper, the methodology chapter starts
with the presentation of a roadmap which describes the evolution of the research
project from the initial idea to the final results. The lecture of this methodology is
dedicated to those interested in the backgrounds and processes of the work involved
during the design and implementation of this research project.
2.1 Research
Background
At the beginning of this project stood three main goals which determined the decision
for the given topic and objectives:
1) to realize this paper in cooperation with a real life company,
2) to work on a real life problem,
3) which will be of major importance for future economic developments.
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All three objectives have been achieved in cooperation with GCI Management AG, a
medium-sized, international consulting firm headquartered in Munich, Germany
which sponsored this paper and supported its implementation.
As the business-to-consumer electronic commerce [B2C e-Commerce] hype started
to cool down in spring 2000, at the time when the basic idea for this research project
was born, Internet based business to business electronic business [B2B e-Business]
or electronic commerce [B2B e-Commerce] appeared to be the new rising star in the
New-Economy. This topic seemed to be very interesting and exciting as its future
was an promising one. So far, the star has not fallen. In fact, B2B e-Commerce or
B2B e-Business have become the new focus of attention in the business world.
Some introductory investigations on B2B e-Business led to the idea to write this
paper about a problem in this emerging business domain. Even at the beginning of
the work some difficulties were encountered as there was hardly any literature or
reliable data available about this topic at this early time. This fact considerably
complicated research but on the other hand made it much more challenging and
interesting. It was necessary to gather first hand information from people in and
around the B2B e-Business field. However, during the time this project lasted, books
and studies on this topic mushroomed due to its high practical relevance.
The first concept for this paper revolved around the idea to examine the influence of
e-Business upon all levels of traditional business between Old-Economy firms in
general. After some research and discussions with IT experts it seemed to be a very
broad and varied phenomenon split into many different areas where all parts of a
company interactively influence each other, often in unpredictable ways. Hence, the
need arose to somewhat limit focus.
The automotive industry seemed to be a perfect object for research because of its
longstanding experience and expertise in B2B e-Business based on EDI and VANs.
The goal was to conduct a study on the influence of Internet based B2B e-Business
on objectives, strategies, and structures of traditional automotive suppliers. However,
this again proved to be difficult due to two main reasons: the development and
implementation of Internet based B2B e-Business in the automotive industry was still
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in an early stage. Many firms had a vision on e-Business, some had master plans
how to go about e-Business, only a few had feasible e-Business strategies but hardly
any organisation could come up with tangible and measurable results.
The second and most important reason was the lack of common definitions and
appropriate classifications on e-Business in general and B2B e-Business in particular
which could have been used as a framework for empirical research. These
circumstances led to the formulation and implementation of the given topic and
objectives.
2.2 Research
Approach
This paper is, first of all, an explorative and descriptive inquiry based on desk
research and a limited number of qualitative semi-structured interviews with experts
active in practice and research. The general approach is to give a detailed
description and definition of the problems under discussion and an outline of the
ongoing developments; furthermore, it will include a number of tentative conclusions
which will not be empirically tested. These conclusions are presented in the course of
the paper and not in a cumulative form at its end. The concepts, classifications,
definitions, norms and advices suggested in the course of this paper are based on
secondary data and on the qualitative interviews mentioned above. They have been
developed through a profound and thorough research which were merged with
classical theories, up-to-date technical literature, existing studies, and day-to-day
experience. They are in part congruent with existing definitions and concepts and in
part not. However, all in all they represent a new homogeneous and holistic approach
on how to view e-Business and B2B e-Business and their impact on traditional
business.
The given research approach has been chosen for the reason that the problems and
questions raised by e-Business and B2B e-Business are first of all practical issues
and not scientific or theoretical ones.
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2.2.1 Inductive vs. deductive research approach
The process of research embarks on empirical work and collecting data which
initiates, refutes or organises the formulated theories and then enables the
understanding or explanation of relevant observations (May, 1997). There are two
different ways to achieve this: the deductive approach and the inductive approach.
The deductive approach revolves around the collection of theory before actually
going into research. Research then functions to produce empirical evidence to test or
refute hypotheses deducted from theories. Within the inductive approach, the
research comes before the hypothesis or the theory and then one seeks to generate
theoretical propositions on social life from data (May, 1997).
In accordance with these definitions, the determination of the research topic and the
formulation of the research objectives followed the inductive approach, whereas the
secondary and primary research itself applies the deductive approach. This is in
accordance with usual proceedings in research since hardly ever either a purely
inductive or a purely deductive approach is used. The practical research approaches
are normally somewhere in between the two.
The evidence for the existence and importance of B2B e-Business was found in the
actual business environment and verified through expert talks and preliminary
literature analysis.
For the actual research process itself, deduction is the most suitable approach since
the data collection - field research - is based on qualitative interviews with
· people in firms adopting, planning, or executing B2B e-Business, and
· experts on e-Business in research and consultancy.
The secondary data generated and analysed is the frame of reference
· for the design of the field research, i.e. the qualitative interviews,
· for a detailed description and analysis of the status quo and future scenarios,
· for the development of the holistic e-Business concept and definition, and
· for the advices developed in this paper.
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2.2.2 Qualitative vs. quantitative research approach
"Qualitative research explores the experience of people in their everyday lives. [...]
Consequently, a researcher does not attempt to manipulate the research settings by
controlling external influences or setting up experiments. One tries to make sense of
everyday life as it unfolds without interruption. Qualitative inquiry is similar to building
a puzzle. You are not building up a puzzle whose picture you already know. You are
constructing a picture that takes shape as you collect and examine the parts."
(Mayan, 2001, p.5) You have the border pieces the theoretical and practical frame
of reference but you actually build the picture. "Qualitative data comes from a very
in-depth look at a phenomenon. Qualitative researchers use the broad definition of
phenomenon and include almost any event that a person experiences. [...] Because
the research is so in-depth only a few individuals and situations are studied, although
many contextual variables are considered. [...]. Generally, qualitative inquiry is most
often used :
· to describe a phenomenon about which little is known,
· to capture meaning (Data are collected in the form of feelings, behaviour,
thoughts, insights, and actions rather than in form of numbers.),
· to describe a process rather than an outcome." (Mayan, 2001, pp.5)
The goal of a quantitative inquiry in business and economic science is to learn about
the distribution of a characteristic or set of characteristics within an organisation or
among a certain number of organisations. (Mayan, 2001) "In quantitative inquiry the
researcher knows a lot about the phenomenon. To return to the puzzle analogy, most
of the puzzle is visible. One is testing the fit of a piece or two. In other words a
quantitative process involves testing a hypothesis (a puzzle piece) within a pre-
existing framework (the entire puzzle), to see if it does hold within the framework.
Instead of a detailed thick description of the phenomenon, quantitative data comes in
the form of numbers that, when interpreted, help to explain the phenomenon. [...]
Both, qualitative and quantitative inquiry are important and illuminate different
aspects of the problem." (Mayan, 2001, p.6)
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The central focus of this paper is the single Old-Economy firm and not the industry or
the sector. The strategy and structure of a single firm are most appropriately
described by qualitative research methods. The reason is that such methods allow a
holistic view of an organisation. Therefore, the qualitative approach is applied to this
paper. There is no quantitative inquiry whatsoever. The quantitative data used in this
paper exclusively comes from secondary sources. The results of this work are meant
to be a framework and inspiration for future qualitative and quantitative research on
e-Business in general and B2B e-Business in particular.
2.3 Research
Methods
There are several methods available for data collection during research. "Which
method is chosen depends on the type of question trying to be answered, the amount
of control the researcher has over the events, along with how much emphasis there
is on contemporary or historical events" (May, 1989, p.20). Each method contains
advantages and disadvantages and that is why the researcher should be aware of
them and choose the right kind for the given problem" (Yin, 1989). Sackman (1991)
identified the following methods for the generation of information relevant to a
research question:
external perspectives
observing research
internal perspectives
participating research
questionnaire
semi- /
structured
interview
document
analysis
group
discussion
unstructured
interview
participating
observation
Figure 2-1: A continuum of survey methods. (drawn from Sackman, 1991)
Due to the given task, the following combination of qualitative research methods has
been chosen. These three methods may be subdivided into desk research,
categorisation, synpaper and analysis of secondary data, and field research which
serves to collect and analyse primary data.
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DESK RESEARCH
Secondary Data
1
document
analysis
FIELD RESEARCH
Primary Data
2
unstructured
interviews
semi-structured interviews
Figure 2-2: Research methods used in this paper.
2.3.1 Desk research document analysis
Document analysis refers to the collection, categorisation, synthesis and analysis of
published or unpublished qualitative or quantitative data or information which was
produced by someone else than the researcher. Within the scope of this paper
secondary data only serves as a source for qualitative research.
2.3.2 Field Research qualitative interviews
Interviews are essential sources of qualitative information (Yin, 1989). "An interview
can be seen as a conversation, such as one conducted by a reporter, in which facts
or statements are elicited from each other" (dictionary.com, 2001).
Interviews offer a great number of possibilities to carry out an in-depth study. When
conducting an interview, several advantages are apparent - relating to the reasons
for its choice:
· the personal contact involved in carrying out an interview results in the
interviewers ability to motivate the respondent to supply accurate and
complete information immediately, so the answer received is relevant in
answering the research questions.
· the ability to guide the respondents in their interpretation of the question. It
also includes the means to describe the reasoning and focus behind questions
in order to receive a relevant reply.
· Another advantage is the greater flexibility during the interview since follow-up
questions may be formulated immediately upon interesting replies by the
interviewees
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· Another point worth mentioning is the fact that the interviewer has greater
control of the interview situation: The questioning might start on a general
level and narrow down to the focus point by using the questions to get from
one extreme to another. In addition, certain questions might influence the
answering of them. (cf. Leenders et al., 2001)
2.3.2.1 Unstructured interview
"In an unstructured interview, a researcher has identified a research question but
knows little about the area of interest. The researcher simply asks participants to tell
their story or talk about their experience and listens and learns. [...] The purpose of
an unstructured interview is to elicit in-depth response from participants. The
processes of unstructured interviewing is therefore non-restrictive. [...] Unstructured
interviewing is near the heart of qualitative inquiry because it allows participants to
use their own language to fully describe their own experience. [...] In an unstructured
interview, the researcher ideally asks one question to encourage participants to
share their perspectives without interruption. The researcher keeps the interview on
track and tests emerging hypothesis, but does so in a gentle manner so that the
participant does not feel dominated or disrupt by the researcher." (Mayan, 2001,
pp.14)
During the initial research phase unstructured interviews with people working in the
field of e-Business were used to gain a general understanding of the situation and
latest developments. The goal was to narrow down the research focus and find a real
life problem which would be of major importance for the future development of e-
Business in general and B2B e-Business in particular. These interviews usually had
an informal character. They where either held upon appointment or on pertinent
occasions such as conferences or workshops - whenever the chance to meet a
greater number of highly qualified potential interviewees was given.
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2.3.2.2 Semi-structured interview
"Semi-structured interviewing collects data from individual participants through a set
of open-ended questions asked in a specific order. In contrast to the unstructured
interview, the semi-structured interview is focused on a series of questions to which
the researcher asks each participant to respond." (Mayan, 2001, p. 15) Within this
type of interview, you can ask the key respondents about theoretical or factual data
as well as inquire about their opinions concerning specific events. The more the
respondents assist in this way, the more their role must be considered as one of an
informant rather than a respondent. Giving an insight into how it is actually done.
Semi-structured interviews are used in two cases:
· firstly, when the researcher knows something about the area of interest, for
instance, from a literature review but not enough to answer the questions that
are to be asked.
· secondly, when the researcher wants to learn the participants evaluation of a
hypothesis built upon previous desk or field research. (Mayan, 2001)
"Having conducted a literature review [...] and drawing upon ones experience, the
researcher prepares a number of questions in advance of the interview. The
questions must be open-ended. [...] In addition, when designing the questions, the
researcher considers the type of information that is required." (Mayan, 2001, p.16)
The following types of question have been employed to obtain specific information
required for the production of this paper:
· experience or behaviour questions
· opinion or value questions
· feeling questions
· knowledge questions
· background or demographic questions (Mayan, 2001).
The overall number of questions has been minimized to avoid interrupting the flow of
the interview. Questions were of a clear, neutral and non-leading nature.
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Furthermore, they were ordered in a logical sequence and addressed only one issue
at a time.
During the actual research process semi-structured topical interviews with people
working in the field of e-Business were used to gain specific information about the
situation and the on-going developments and to test predetermined hypotheses in an
non-empirical manner. The objectives of this proceeding are presented in item 1.2.
Depending on the participants agreement, interview purpose and time available,
some of the interviews were taped; the remaining ones were recorded by taking
notes. In general, each participant was interviewed alone to maintain an open and
uninfluenced atmosphere. Only in a few cases - when intended or necessary - two or
three participants where questioned at the same time. The interviews usually had an
informal character and where regularly held upon appointment with interviewees
chosen out of those available and ready to participate. Some interviews were also
held during pertinent occasions such as conferences or workshops whenever a
greater number of highly qualified potential interviewees was available.
2.4 Data
Sources
The paper is based on both secondary data generated through document analysis
and primary data gained through qualitative interviews.
2.4.1 Secondary data
The collection of secondary data was carried out by untapping many different
sources. The majority of the theoretical information was obtained from the following
sources:
· articles and books already worked with,
· articles and books of the library and archives the Johannes Kepler University,
· magazines and journals,
· literature ordered from abroad via the Internet,
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· Internet:
-
electronic libraries,
-
information providers,
-
websites of universities, organisations, research establishments,
businesses, magazines, journals,
· companies and organisations:
-
GCI Management (consulting firm, Munich, Germany),
-
TCG Unitech (automotive supplier, Kirchdorf, Austria),
-
IBM Austria,
-
Siemens Business Services (Linz, Austria)
-
Automobil Cluster Oberösterreich [AC OÖ] (Linz, Austria),
-
etc.,
· conferences attended:
-
Europäische Forum Alpbach 2000 (Alpbach, Austria),
-
Europäische Forum Alpbach 2001 (Alpbach, Austria),
-
Electronic B2B Trade Conference 2001, April 4-5 by IBC Global
Conferences (London, UK),
-
EDI in der Automobilzulieferindustrie (December 11
th
, BMW Motoren
GmbH, Steyr, Austria),
· materials from conferences not attended:
-
Automobil Forum 2001: Die neuen Strategien der Automobilhersteller
(Stuttgart, Germany),
-
2. Euroforum: Fachkonferenz: e-Business in der Automobilindustrie 2001
(Frankfurt, Germany),
-
e-Business: Wettbewerbsvorteile für die Automobilzulieferindustrie (March
29
th
, 2001, AC OÖ, AC Styria),
· workshops attended:
-
eBusiness Lernplattform in Stammtischatmosphäre: eBusiness in der
Automobilindustrie-3 (2001, AC OÖ).
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2.4.2 Primary data
Primary data was mainly gained from the information given during 19 semi-structured
qualitative interviews with the following persons:
TITLE
NAME
ORGANISATION
NoI
COUNTRY
Mag.
Wolfgang Pittner
Automobile Cluster OÖ., Linz
2
Austria
Mag.
Gerlinde Pöchhacker
Automobile Cluster OÖ., Linz
2
Austria
Dipl.Wirt.Ing
Thomas Peckhaus
GCI Management AG, Munich
4
Germany
Dipl.Ing.
Peter Weilguni
GCI Management AG, Vienna
4
Austria
Mag.Dr.,
a.o.Univ.-Prof.
Johannes Lehner
Johannes Kepler University Linz -
Institut für Unternehmensführung -
Organisation
1 Austria
Dr.,o.Univ.-Prof. Volker
Gadenne
Johannes Kepler University Linz -
Institut für Philosophie und
Wissenschaftstheorie
1 Austria
DDr.,a.o.Univ.-Prof. Johann
Höller
Johannes Kepler University Linz -
Institut für Datenverarbeitung f. SOWI
1 Austria
Dipl.Ing. Christian
Hansl TCG
Unitech, Kirchdorf
3
AUT, UK
Ing.
Wolfgang Fischereder
TCG Unitech, Kirchdorf
1
AUT, UK
Figure 2-3: List of interview partners (NoI = number of interviews) .
Beside these planed and semi-structured interviews further valuable information was
gathered through approximately 30 informal and unstructured conversations with e-
Business experts during the events mentioned in item 2.4.1. These experts where
mainly from the following companies and non-profit organisations:
· Ariba
· IBM Global / Europe / Austria
· Austrian Chamber of Commerce
· Johannes Kepler University Linz, Austria
· BMW
· Marrakech
· Bolero
· McKinsey Company
· Cap Gemini Ernst Young
· Oracle
· CommerceOne
· Roland Berger Partner
· Compaq
· Seeburger
· CSC Austria
· Siemens
· Danzas
· SITPRO
· Debis
· UTA Telekom
· Ford Motor Company
· VA Tech Elin EBG
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2.5 Data
Analysis
"In almost all circumstances, data collection in qualitative inquiry is a systematic
pattern of data collection-analysis-collection-analysis ad infinitum. The qualitative
researcher collects data, analyses it, collects more data to fill in gaps, analyses it,
collects more data and so on to reach saturation. [...] Through this process, the
researchers understanding grows so that one can start to create models or diagrams
of relationships in the data, connect this with literature, seek relationships between
categories; or do whatever the method demands. [...] The circular analysis process
described above, however, does not apply to the analysis of semi-structured
interviews [...]; these strategies consist of set questions that are asked of every
participants. It is conducted after all of the interviews are completed." (Mayan, 2001,
p. 21) The answers are then analysed separately and in comparison with each other.
2.6 Frame of reference
Within the scope of this paper classic business literature is the frame of reference
used to build on a set of commonly held theories, principles and definitions, which
serve to avoid unnecessary work and misunderstandings as much as possible. The
use of commonly held theories and research carried out by other experts provides a
certain degree of scientific credibility and saves a lot of time. Classic methods,
theories and information available in business literature and business press are used
in a way that they are in connection with the paper topic and objectives. Research
methods and their possibly biased results are not questioned. Furthermore, the
results and conclusions are used to bring the paper forward and gain an enhanced
and wider overview over the topic. The most important theories and models used as
a framework for this paper can be found in :
Porter, M.E.:
Corporate Strategy (1980). New York: The Free Press
Competitive Advantage (1985). New YorK: The Free Press
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Schreyögg, G.:
Grundlagen moderner Organisationsgestaltung, mit Fallstudien, 2.Auflage (1998,
p.304-401). Wiesbaden: Gabler Verlag.
Waterman, R.H.; Peters, T.J. J.R. Phillips:
7-S Framework (in: Mintzberg Quinn, 1991, p.309-314),
Barney, J.B.:
Gaining and sustaining competitive advantage (1996,2001). Reading, MA: Addison-
Wesley Inc.
Mintzberg, H., Quinn, J.:
The Strategy Process (2. Ed.) (1991). Englewood Cliffs, NJ: Prentice Hall, Inc.
Porters work on the value chain, the value system and competitive strategy and
Schreyöggs work on the organisation and its interplay with the environment are the
two most relevant for this paper. A basic discussion of Porters models can be found
in item 3, as it is essential to the understanding of this paper. Schreyöggs work is not
discussed in detail within the scope of this paper and can be found at the source
mentioned above.
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3 Porters value chain and value system
The goals of this chapter are:
· the definition of the value chain and value system.
· classification of terms Value Chain, Value Systems, Supply Chain, and
Demand Chain.
· determining the relevance of M.E. Porters work and terminology in this paper.
As e-Business has an effect on all areas of business (Roland Berger, 2000), it seems
to be appropriate to use the value chain and value system model introduced by
Michel E. Porter as the major frame of reference to describe, define and categorise
e-Business, B2B e-Business and their impact on traditional companies. Furthermore,
it is the basis for discussing selected strategic aspects of the e-Volution driven by
Internet based B2B e-Business.
The use of the terms value chain, value system, supply chain and demand chain
frequently cause confusion for people in practice and research. They are often used
in different ways or even interchangeably. "Value chain" refers sometimes to the
internal situation and internal relationships of a firm, however, sometimes it is also
used to describe the external relationships of a firm. Consequently, in this paper the
terms value chain and value system as defined by Porter are normally used to avoid
misunderstandings and to build on a clear and proven model and terminology.
The following two sections are mainly based on Porters classic book "Competitive
Advantages: creating and sustaining superior performance" published in 1985 but
also on his work "Competitive Strategy" released in 1980.
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3.1 Value
chain
Any company - either in the Old-Economy or in the e-Economy - can be defined as
the collection of interlocking activities and processes that are performed to design,
produce, market, deliver and support its product(s), no matter whether those are
goods or services.
MARGIN
PRIMARY ACTIVITIES
SUPPORT
ACTIVITIES
FIRM INFRASTRUCTURE
HUMAN RESOURCE MANAGEMENT
PROCUREMENT
TECHNOLOGY DEVELOPMENT
INBOUND
LOGISTICS
OUTBOUND
LOGISTICS
MARKETING
SALES
SERVICE
OPERATIONS
MARGIN
THE GENERIC VALUE CHAIN
Figure 3-1: The generic value chain (Porter, 1985, p.37).
These activities are represented in Michael E. Porters value chain concept which was
introduced in 1985. They can be subdivided into two major areas: primary activities
and support activities. Primary and support activities together encompass nine
categories of generic activities within a firm and the linkages in between:
· primary activities:
-
inbound logistics,
-
operations,
-
outbound logistics,
-
marketing and sales,
-
service,
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· support activities:
-
firm infrastructure,
-
human resource management,
-
technology development,
-
procurement.
Primary activities involve the creation, sales and transfer of the (value added) product
as well as customer service. Support activities assist the primary activities and each
other. These nine different functional areas are illustrated in the classic value chain
symbol shown in Figure 3-1. Although the value chains of firms in the same industry
can be similar, it is important to remember that the value chain of competitors often
looks different.
COMPETITIVE SCOPE
COMPETITIVE ADVANTAGE
Uniqueness
perceived by the customer
Low cost position
Broad Target
(e.g. industrywide)
Narrow Target
(e.g. Particular
segment only)
DIFFERENTIATION
OVERALL
COST LEADERSHIP
DIFFERENTIANTION
FOCUS
COST LEADERSHIP
FOCUS
Figure 3-2: The generic competitive strategies by M.E. Porter (1980; 1985).
A firms value chain and the way it performs individual activities and structures its
organisation are a reflection of its history, strategy, approach to implementing its
strategy, and the underlying economics of the activities themselves (Selz, 1999). The
value chain model disaggregates a business into its strategically relevant activities in
order to better understand the behaviour of costs and the existing and potential
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sources of cost reduction and differentiation compared to its competitors. A company
gains and sustains competitive advantage by performing one or more of these
strategically important activities more cost-effectively and / or better than its
competitors. According to Porter, the competitive situation of a firm depends, among
other things, on its own competitive strategies (internal situation, mainly controllable)
(see Figure 3-2) as well as on the competitive forces in its industry environment
(external situation, mainly uncontrollable) (see Figure 3-3). The competitive strategy
of a firm and the competitive forces in its respective industry affect its competitive
advantages through its impact on the value chain.
P O T E N T I A L
E N T R A N T S
S U B S T I T U T E S
S U P P L I E R S
B U Y E R S
Bargaining
power of
suppliers
Bargaining
power of
buyers
Threat
of new
entrants
Threat of
substitute
products
/ services
Rivalry among
existing firms
INDUSTRY
COMPETITORS
Figure 3-3: The five competitive forces that determine industry competition (Porter, 1980; 1985).
Porter developed this model with the intention to provide a strategic tool to describe
the creation of value within in a firm and across its value system and to analyse the
influence of competitive strategy and competitive forces on a firms value chain
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competitiveness (i.e. its relative cost positions and existing and potential sources of
differentiation). The actual question is where the profits are generated and where a
company loses money. Moreover, it is important to identify sources of additional
profits and find out how to avoid a surplus of costs.
3.2 Value
system
Figure 3-4 shows that the value chain of a single firm is embedded in a larger stream
of activities. Porter called this the "value system". It encompasses the forgoing value
chains of suppliers and the succeeding value chains of buyers and channel partners.
From the perspective of a single company, the value system can be subdivided into
three different streams of value creation. The first one is the firms value chain which
was described above. The second one encompasses the value chains of all direct
and indirect suppliers. They produce and deliver products and services which the firm
then purchases and uses in its own value chain for the creation of value. All direct
and indirect suppliers taken together represent the upstream value of a firms value
system. Suppliers not only provide goods and services for the firm but may also
influence its value chain and hence its performance in many different ways. The third
one is the channel value (downstream value) which is generated buy the value
chains of all channel partners. A product may be directly sold to the end-user or pass
through the value chains of channel partners on their way to the buyer (i.e.
organisations or consumers) who actually uses it. The latter is usually the case.
Channel partners perform additional functions that add value to the product which
reaches the buyer, affecting the buyers as well as the firms own value chain. The
ultimate basis for competitive advantage (i.e. lower costs and / or differentiated
activities) is a firm and its products role in the buyers value chain, which determines
buyer needs. Figure 3-4 shows two different configurations for this model. A firm that
focuses on a single product faces different challenges than a firm with a diversified
product portfolio.
Gaining and sustaining competitive advantage not only depends on understanding a
firms value chain but also on how the firm may support the value chain of channel
Johannes Kepler University of Linz Austria
35
Christoph Wenna
The Transforming Power of Business-to-Business Electronic Business
partners or buyers and, ultimately, how it fits into its respective value system.
Competing in related industries with coordinated value chains may generate
competitive advantages through leveraging inter-organisational integration,
collaboration and synergies. A firm can compete by exploiting its own internal
competencies or it may form coalitions with other organisations to do so.
Diversified Firm
Supplier
Value Chains
Channel or
Buyer
Value Chains
Firm
Value Chain
Channel or
Buyer
Value Chains
Single-Industry Firm
THE VALUE SYSTEM
Supplier
Value Chains
Channel or
Buyer
Value Chains
Business Unit
Value Chain
Channel or
Buyer
Value Chains
Business Unit
Value Chain
Business Unit
Value Chain
Firm Value Chain
Figure 3-4 : The generic value system (Porter, 1985, p.35).
Coalitions are long-term alliances that fall short of outright merger, such as joint
ventures, licenses, and supply agreements. Coalitions involve coordinating or sharing
value chains with coalition partners. The end is to better fulfil customer needs by
reducing costs or adding product value. In opposition to Porters model, the definition
Johannes Kepler University of Linz Austria
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Christoph Wenna
The Transforming Power of Business-to-Business Electronic Business
employed in this paper not only includes coalitions that effectively enlarge the
competitive scope of a firm but also coalitions that serve to better perform the
existing value proposition of a company. The latter is important in the e-Economy
since it represents a possibility to extensively outsource support or even primary
activities.
3.3 Supply
chain
The supply chain is a set of approaches utilized to efficiently integrate the value
chains of many different suppliers and the own value chain forming a network of
business partners (comprised of stores, retailers, wholesalers, warehouses, and
manufacturers) to optimise the entire procurement and manufacturing process with
emphasis on customer pull vs. supplier push. Supply Chain Management [SCM]
allows the customer (end-user or channel partner) to purchase and receive direct and
indirect goods and services at the right quantities, to the right locations, and at the
right time in order to minimize system-wide costs and maximise responsiveness while
satisfying service level requests (Mayer, 2001, Vcml.net, 2001, Infoaccess.net,
2001).
3.4 Demand
chain
The demand chain is a set of approaches utilized to efficiently integrate the own
value chain and the value chains of many different customers forming a network of
business partners (comprised of stores, retailers, wholesalers, warehouses, and
manufacturers) to optimise the entire manufacturing and selling process with
emphasis on customer pull vs. supplier push. Demand Chain Management [DCM]
allows the firm to produce and deliver direct and indirect goods and services at the
right quantities, to the right locations, and at the right time in order to minimize
system wide costs and maximise responsiveness while satisfying service level
requests.
Johannes Kepler University of Linz Austria
37
Details
- Seiten
- Erscheinungsform
- Originalausgabe
- Jahr
- 2002
- ISBN (eBook)
- 9783832476519
- ISBN (Paperback)
- 9783838676517
- DOI
- 10.3239/9783832476519
- Dateigröße
- 1.2 MB
- Sprache
- Englisch
- Institution / Hochschule
- Johannes Kepler Universität Linz – Wirtschaftswissenschaften, Unternehmensführung
- Erscheinungsdatum
- 2004 (Januar)
- Note
- 1,0
- Schlagworte
- digitalization digitalisation digital transformation digitization digitisation Digitale Transformation Digitalisierung business model business model innovation strategic management value chain Internet Industrie 4.0 Industry 4.0 B2B electronic business e-business next generation next generation business
