PORTER’S GENERIC STRATEGIES IN THE DIGITAL AGE: ASSUMPTIONS, CONJECTURES, AND SUGGESTIONS

다국어 초록 (Multilingual Abstract)

Because current management theories evolved in the context of brick-and-mortar firms, this paper examines three key questions raised by the advent of e-business: 1) What strategy types will be found among e-business firms? Will they resemble Porter’s (1980) generic strategy types? 2) Will we find performance difference among e-business firms using different strategy types? 3) Will we find differences in the strategy-performance relationships of pure online firms (pure plays) and firms with both online and offline operations (clicks-and-bricks)? We propose that Porter’s (1980) generic strategy framework is still applicable, albeit in need of some modification, to competition in the digital age.
While enthusiasm for e-business, especially B2C business, has waned since the Internet boom period of the late 1990s, business activity on the Internet continues to grow. A recent Business Week article claims that, “the Net is actually delivering on many of its supposedly discredited promises... It is helping companies slash costs. It is speeding the pace of innovation and jacking up productivity... Of the publicly held Internet companies that survived the shakeout, some 40 percent were profitable in the fourth quarter of 2002” (Business Week, 2003:44). Expedia.com is now the top leisure-travel agency online or off, while 13 percent of all traditional travel agency locations closed in 2002. And, Expedia also has higher profit margins than American Express. In the financial services area, nearly every public e-finance company is profitable. And while less than five percent of all shopping is done online, eBay will become one of the top 15 retailers in the United States during 2003. Amazon.com will join the top 40 (Business Week, 2003). Andy Grove, chairman of Intel, has recently stated, “Everything we ever said about the Internet is happening.”
On-going enhancement in transaction security and e-vendor quality along with an increasing number of IT knowledgeable consumers will surely attract more and more consumers to e-commerce (Liao & Cheung, 2001). Indeed, a study by the Georgia Institute of Technology (Kehoe, Pikow, & Rogers, 1998, as cited in Ranganathan & Ganapathy, 2002) reported that shopping was the primary use of the Web for about 40 percent of the respondents. About 22 percent of U.S. homes (19 million) now have high-speed Internet access, and this figure is expected to reach 40 million by the end of 2004. Broadband users spend 58 percent more time and buy 37 percent more online, according to a Forrester Research survey. Internet use is even higher in Canada, Japan, and Korea. For most consumers, the Web is no longer a novelty, and it is becoming as essential to everyday life as telephone service or electric power (Business Week, 2003).
A review of 275 e-business articles from nine journals that are possible outlets for electronic commerce research published between 1993 and 1999 concluded that there is no doubt that research on electronic commerce will increase significantly in future (Ngai & Wat, 2002). Scott and Walter (2003) argue that Web technologies constitute a major business innovation, and argue that this is reason enough for research into the challenges, problems, and opportunities raised by the Internet.
How is the new information age different from the machine age of the last 100 years? Managers and scholars alike are struggling to understand how economic and business rules have changed and should change. Many have claimed that previous concepts will not be applicable in this new environment. Yet, others argue that the Internet is nothing but a new business tool and not much has been really changed. Amit and Zott (2001) reviewed the literature to date and concluded that it has not articulated the central issues related to the e-business phenomenon, nor has it fostered the development of theory that captures the uni

목차 (Table of Contents)

• ABSTRACT
• CHARACTERISTICS OF THE E-BUSINESS ENVIRONMENT
• GENERIC E-BUSINESS STRATEGIES
• TYPES OF STRATEGIES AND THEIR PERFORMANCE IMPLICATIONS
• CONCLUSION
• REFERENCES