Value Chain and E-Strategy

[iftekhar.swe]

Value Chain and E-Strategy

Every activity within a physical value chain has an inherent information component. The amount of information that is present in activities determines, company’s orientation towards e-commerce. It has been observed that companies with high information presence will adopt e-commerce faster rather than companies with lower information presence.

For example, a computer manufacturer has high information presence, i.e. they can provide a great deal of product information through their website. Consumers also have flexibility to determine the product configuration using the website. Such computer manufacturers and companies with comparative business model are also likely to adopt e-commerce.

Activities which comprise of the value chain are undertaken by companies to produce and sell product and services. Some of the activities done within the value chain are understanding customer needs, designing products, procuring materials for production, production, storage of products, distribution of products, after sale services of products and customer care.

Understanding Information Presence

There are two ways to assess information presence. The first way is by looking at the industry, and second way is by looking at the product. In an industry with high information presence, it has been observed that:

• Industry will have large number customer base.
• Production process is complex.
• Order turnaround cycle is long.

For a product with high information presence following is observed:

• Product is simple to manufacture.
• Product has multiple functionalities.

Industry and product which satisfy above conditions are likely to adapt e-commerce.

E-Strategy

Companies with high information presence were the first to look at e-commerce as an alternate way of conducting business. For example, software companies, much of there is business is done through the internet. Their website provides in-depth product information through e-brochure, video, client opinion, etc. Sales leads are generated online; purchase and fund transfer is done, and also after-sales service is done online.

These high information companies have made substantial investment in human resources and information/communication technology.

[lamisha]

thanks for sharing