A VALUE CHAIN FOR

E-BUSINESS

ByMayuri GadkarPrasanna Bapure

Content

Business modelMeaning of Value ChainHistoryPorter’s modelValue chain for e-businessIntegration of organizationApplications

What Is A Business Model?

The e-Business model, like any business model, describes how a company functions; how it provides a product or service, how it generates revenue, and how it will create and adapt to new markets and technologies.

Meaning •A value chain is a chain of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market.

History

The concept comes from business management and was first described and popularized by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.

Why Value chain for e-business?

Why Value chain for e-business•A process-oriented approach to electronic business and electronic government allows to study electronic transaction between market partners, consumers and citizens as well as public administration including NGO's

• Internet technologies should broaden the capacity to act of organizations and of individuals, promote transactional contacts and exchange relations, and lead to an open society with cultural originality and variety. For this purpose the opportunities and risks of electronic means of communication must be weighed against each other and the protection of intellectual property and of the private sphere maintained.

• The effective delivery of value to a customer, requires that a company organize its structure and functions according to the type of product or offering delivered.

• The value chain, describes a linear set of steps, which could be activities or business processes such as design, production and sales, whereby a manufacturing company delivers value which delivers model striving for overall efficiency and cost reduction by increasing the efficiency and reducing the cost of each business process.

• Each step is independent and separable, and can be outsourced, or contracted out to another company.

• The value chain becomes a supply chain when a company uses the inputs and activities of other companies in its manufacturing process.

Integration Of Organization Or Enterprise Operations

Applications • Describes how a company functions; how it provides a product or service, and how it produces revenue

• Indicates how a company will create and adapt to new markets and technologies

• Shows how a company can be successful provided that all the components work together in a cooperative and supportive fashion.

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Helps management to focus on the whole business, not just on one activity

References• The Economist Intelligence

• Identifying E-Business Model: A Value Chain-Based Analysis ZENG Qingfeng, HUANG Lihua

• University of Fribourg (Switzerland)   -   Department of Informatics 

• http://www.eiu.com

• Porter, M (1985): Competitive Advantage: Creating and Sustaining superior Performance  N.Y. Free PressEvans P, Wurster T (2000): Blown to bits: How the new economics of Information transforms strategy Harvard Business School Press

• Porter M, Millar VE (1985): How information gives you competitive advantage Harvard Business Review Vol 63 Issue 4 Jun/July 1985 pp 149-160

• Rayport, J Sviokla, J (1995): Exploiting the virtual value chain Harvard Business Review Vol 73 Issue 6 November/December 1995 pp 75-85

• Ridderstrale, J Nordstrom K (2002): Funky Business Financial Times Prentice Hall