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324 Part 2 Strategy and applications

For example, Dell has used a range of IT-enabled techniques mentioned earlier in the chap-
ter such as online ordering, the Dell Premier extranet for large purchasers, vendor-managed
inventory, adaptive supply chains, build-to-order to gain competitive advantage.
So, in summary research into the productivity paradox highlights the importance of
considering the information, people and technology resources together when planning for
e-business strategy and implementation. It also suggests that e-business contributes to
productivity gains only when combined with investments in process redesign, organiza-
tional change management and innovation.

Summary 1 E-business strategy process models tend to share the following characteristics:
Continuous internal and external environment scanning or analysis are required.
Clear statement of vision and objectives is required.
Strategy development can be broken down into formulation and selection, a key
emphasis being assessing the differential benefits provided by e-channels for
company and stakeholders and then selecting the most appropriate channels for
different business activities and partners (‘right-channelling’).
After strategy development, enactment of the strategy occurs as strategy imple-
mentation.
Control is required to detect problems and adjust the strategy accordingly.
They must be responsive to changes in the marketplace.
2 In this chapter a four-stage model is used as a framework for e-business strategy
development. Key e-business issues within this framework are outlined below.
3 Strategic analysis. Continuous scanning of the micro- and macro-environment of
an organization are required, with particular emphasis on the changing needs of
customers, actions and business models of competitors, and opportunities
afforded by new technologies. Techniques include resource analysis, demand
analysis and competitor analysis, applications portfolio analysis, SWOT analysis
and competitive environment analysis.
4 Strategic objectives. Organizations must have a clear vision on whether digital
media will complement or replace other media, and their capacity for change. Clear
objectives must be defined and in particular goals for the online revenue contribu-
tion should be set.
5 Strategy definition. Six key elements of e-business strategy that were reviewed are:
E-business priorities – significance to organization (replace or complement) and

emphasis on buy-side or sell-side.
Form of restructuring required.
Business and revenue models.
Marketplace restructuring.
Market and product development strategies.
Positioning and differentiation strategies.
6 Strategy implementation. Detailed in the remainder of Part 2 and in Part 3.
7 Information systems strategy should use a combination of impact and alignment tech-
niques to govern e-business strategy. IS strategy can take a number of perspectives,
of which those that focus on information or knowledge management and technolog-
ical and applications infrastructure are most important.