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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Organizational Dynamics, Volume 33, Issue 2, May 2004, Pages 161–173
The Internet continues to grow and evolve as a vital resource with which companies can upgrade their capabilities and grow their businesses. Shop.org and Forrester Research predict that, at its present growth rate, on-line retail sales in the United States will top the $100 billion mark in 2004 which represents 4.5 percent of total retail sales. Business-to-business (B2B) e-commerce is expected to grow worldwide to $4.3 trillion by 2005 according to International Data Corp (IDC). The phenomenal success of young companies such as eBay, Google, and Amazon are also indicative of the Internet’s potential
The Internet continues to grow and evolve as a vital resource with which companies can upgrade their capabilities and grow their businesses. Shop.org and Forrester Research predict that, at its present growth rate, on-line retail sales in the United States will top the $100 billion mark in 2004 which represents 4.5 percent of total retail sales. Business-to-business (B2B) e-commerce is expected to grow worldwide to $4.3 trillion by 2005 according to International Data Corp (IDC). The phenomenal success of young companies such as eBay, Google, and Amazon are also indicative of the Internet’s potential. The impact of the information technology revolution, however, goes beyond the Internet. At a more basic level, it is the shift from analog to digital technologies that is responsible for so many new information technology (IT) capabilities. Analog was once the primary technology for conveying information such as music recordings, voice communications, and television signals. Many technologies have made the switch from analog to digital—phones, photographs, television signals, and even books—and the trend suggests digitization is here to stay. As a result, digital technology capabilities which, in essence, make the Internet possible, are altering the way business is conducted. According to digital economy visionary Don Tapscott: The Net is much more than just another technology development; the Net represents something qualitatively new—an unprecedented, powerful, universal communications medium. Far surpassing radio and television, this medium is digital, infinitely richer, and interactive … Mobile computing devices, broadband access, wireless networks, and computing power embedded in everything from refrigerators to automobiles are converging into a global network that will enable people to use the Net just about anywhere and anytime. These technology-driven initiatives—the Internet, wireless communications, and other digital technologies—are having a significant impact on the economy. They have done so by changing the ways businesses interact with each other and with consumers. This has not only created an environment in which businesses must perform at a higher level—faster, cheaper, smarter—but also it has created many new business opportunities. Even so, many firms are still struggling with the basic issue of how to use the Internet and digital technologies for their best advantage. Despite the visible and noteworthy successes such as eBay and Google, other Internet companies continue to struggle including “here-to-stay” giants such as Time Warner. The weak economy is partially to blame for faltering Internet businesses. However, a more fundamental reason is that companies are still not clear how the Internet adds value. In this article we look at how companies are leveraging the unique features of digital technology to create competitive advantages. Two aspects of this approach stand out. First, there are several strategies that Internet-based businesses can use to improve their value propositions. These include four Internet-specific activities that are providing firms with new capabilities—search, evaluation, problem-solving and transaction. These value-adding activities are enhanced further by managing three different types of Internet content—customer feedback, expertise, and entertainment programming. Second, these value-adding strategies are best understood in the context of business models that are specific to the Internet environment. Thus, we will consider seven Internet business models that have emerged and proven successful, and outline how value-adding activities and content are best used in the context of each of the Internet business models.
نتیجه گیری انگلیسی
The Internet and digital technologies have created new opportunities for firms to create value. This paper has examined ways in which companies are using the Internet to add value. Four value-adding activities that have been enhanced by Internet capabilities were addressed—search, evaluation, problem-solving, and transaction. Search activities include processes for gathering information and identifying purchase options. Evaluation activities refers to the process of considering alternatives and comparing the costs and benefits of various options. Problem-solving activities include identifying problems or needs and generating ideas and action plans to address those needs. Transaction activities involve the process of completing a sale, including negotiating and agreeing contractually, making payments, and taking delivery. These four activities are supported by three different types of content that Internet businesses often use—customer feedback, expertise, and entertainment programming. Internet business models provide a context for enacting value-adding activities. Seven business models have been identified that are proving successful for use by Internet firms. These include commission, advertising, mark-up, production, referral, subscription, and fee-for-service based models. Strategic use of value-adding activities, as well as the seven business models, can help firms build competitive advantages and contribute to profitability. Firms have also found that combinations of the Internet business models can contribute to greater success. Firms that want to benefit from these new value-adding approaches need to ask how the Internet is affecting their current operations and how they might effectively implement Internet capabilities. Identifying the practices and models that will enhance and not detract from a firm’s value proposition is central to using the Internet to create wealth.