virtual value chain for E-COMMERCE.pdfVIP

An analysis of the virtual value chain in electronic commerce Ganesh D. Bhatt and Ali F. Emdad Introduction Recent advances in the field of computer networks and telecommunications have increased the significance of electronic commerce. Managers and academic researchers are predicting the huge potential of the latest networking technologies in conducting businesses. It has been widely argued that marketing through the Internet and World Wide Web provides transaction specific efficiencies to all the stakeholders. The customers get benefits due to lowering of search cost, while the manufacturers get the benefit of the economy of production, because they can attract more business from the customers by providing their products and services at a lower cost. Also, by capturing customer specific information, the Internet and World Wide Web can offer the opportunities for the customization of products and services. Electronic commerce (e-commerce) refers to conducting business electronically. It includes buying and selling of information, products, and services via computer networks (Kalakota and Whinston, 1997, p. 1). However, the above concept of e-commerce is very narrow, as several researchers argue that the Internet offers huge potential in building communities of interests, forging alliances, and transforming public attitude towards technology. Although electronic data interchange (EDI) and electronic fund transfer (EFT) have been around since the early 1970s, they were limited in their effects to encompass a whole set of marketing factors because of their high cost and technological complexity. However, recently, the rapid diffusion of the Internet and World Wide Web has made conducting business over the Internet much more popular. These new media offer the advantages not only of low cost, but also provide the ease with which they can support different marketing activities. A recent US Department of Commerce report estimates the electronic business is growing exponen