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E-Commerce Strategies_The Relationship Between E-commerce & Competitiveness

E-Commerce Strategies_The Relationship Between E-commerce & Competitiveness

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Published by Shapiro
This research paper sets out to analyze the degree to which e-commerce can be embraced to achieve competitive advantages. It analyzes how e-commerce technologies have impacted on business performance in Zimbabwe. The research determines the relationship between e-commerce and business profitability.
This research paper sets out to analyze the degree to which e-commerce can be embraced to achieve competitive advantages. It analyzes how e-commerce technologies have impacted on business performance in Zimbabwe. The research determines the relationship between e-commerce and business profitability.

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Published by: Shapiro on Oct 13, 2008
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05/09/2014

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How Overall Cost Leadership can be achieved by E-commerce

Lumpkin et al (2002) contend that business fundamentals need to be adhered to for
businesses to successfully implement e-commerce and achieve advantages.
According to Lumpkin et al (2002:6):

The service and capability offered by businesses have to be made
uninimitable. For cost leadership advantages companies have to continue
focusing on all cost centres, decrease expenses and maintain cost
advantages as well as reduce inventories using e-commerce real-time
communications to make production schedules and delivery systems more
efficient.

How differentiation advantages can be achieved by E-commerce

Firms can create capabilities so specialised for a given customer that the chance of
customers turning to other solution providers is greatly lessened (Tapscott, 2000).
There is still a great need to position products as unique and valuable to customers.
Overpricing of products has to be avoided.

How Focus advantages can be achieved by E-commerce

Porter (2001) agrees with Lumpkin et al (2002) that focusers can capitalise on e-
commerce to capture specialised market niches. This can be done using

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technological capabilities to satisfy the needs of particular markets and reduce the
threat of new entrants by firmly establishing itself as the customer’s most valued
provider. Focusers need to read the scope and interests of their target markets
(Lumpkin et al, 2002). As such uniqueness and focus on markets need to be
maintained. A focus firm’s niche should be big enough to be profitable, but small
enough to lessen the attractiveness to potential new entrants.

Summary

According to Porter (2001), the creation of true economic value once is the final
arbiter of business success. Economic value for a company is nothing more than the
gap between price and cost, and it is reliably measured, only by sustained
profitability (Porter, 2001). As such, sustainable competitive advantage creation
involves making choices throughout the value chain that are interdependent (Porter,
2001). In other words, all company activities must be mutually reinforcing. This
process actually makes a strategy harder to imitate since the whole system of
competing is difficult to imitate.

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