BA_315_LN__9E_BUSINESS__MODELS__AND__STRATEGIES__FOR__THE

BA_315_LN__9E_BUSINESS__MODELS__AND__STRATEGIES__FOR__THE -...

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1 BUSINESS MODELS AND STRATEGIES FOR THE INTERNET ERA Lecture Notes #9E BA 315: Economy, Industry, and Competitive Analysis Source: Chapter 7, Strategic Competition : A Primis created by Ali Emami from: Thompson and Strickland. Strategic management: Concepts and Cases , 13 th Edition, Irwin/McGraw-Hill New York. 2003. Screen graphics created by: Jana F. Kuzmicki, PhD, Mississippi University for Women Department of Finance Charles H. Lundquist College of Business University of Oregon
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2 “The key question in not whether to deploy Internet technology— companies have no choice if they want to stay competitive—but how to deploy it.” Michael Porter Professor, Harvard Business School “Our strategy is to integrate the Internet into all of our core businesses.” Thomas Middelhoff CEO, Bertelsmann, AG, Germany “Quote”
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3 Lecture Outline ¡ The Internet: Technology and Participants ¡ How Internet Technology Impacts Company and Industry Value Chains ¡ How the Internet Reshapes the Competitive Environment ¡ Strategic Mistakes Made by Early Internet Entrepreneurs ¡ E-commerce Business Models and Strategies for the Future
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4 The Internet : A Revolutionary Driving Force ¡ Adds an important new distribution channel ¡ An important technological tool for performing some value chain activities better and for bypassing others ¡ Alters the strength of competitive forces ¡ Spawns entirely new industries ¡ Affects a company’s competitiveness vis-à-vis rivals Internet Technology ¡ Internet consists of Î Integrated network of users’ connected computers Î Banks of servers and high-speed computers Î Digital switches and routers Î Telecommunications equipment and lines
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5 Suppliers of Internet Technology and Services ¡ Makers of specialized communications components and equipment ¡ Providers of Internet communications services ¡ Suppliers of computer components and hardware ¡ Developers of specialized software ¡ E-commerce enterprises z Business-to-business merchants z Business-to-consumer merchants z Media companies z Content providers The Impact of Vigorous Competition Among Alternative Internet Technologies ¡ Often, competing technologies have materially different pluses and minuses ¡ Competing technologies may well be incompatible, preventing users of one from interfacing with users of another—and costs of parallel systems may be prohibitive ¡ Strategic options for technology rivals: Î Invest aggressively in R&D to win technology race Î Form strategic alliances to build consensus for the favored technological approach Î Acquire other companies with complementary technological expertise Î Hedge the company’s bets by investing resources in more than one of the competing technologies
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6 How Internet Technology Impacts Company Value Chain Efficiency ¡ Companies can use the Internet and Internet technologies to improve the efficiency and effectiveness of particular value chain activities Î Powerful tool for better supply chain management
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This note was uploaded on 04/22/2008 for the course ECON 315 taught by Professor Aliemami during the Spring '08 term at University of Oregon.

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