Which E-Business is Right for Your Supply Chain?

Abstract

The internet is revolutionizing the way companies conduct business. Or is it?

A survey of companies with an online presence shows wide disparities in performance. Although Dell has used the Internet to boost revenues and earnings successfully, Amazon lost $585 million on revenues of $1.6 billion in 1999. We argue that the value of the Internet for a company strongly depends on the company’s industry and on the strategy it pursues. The big winners will likely be those that fully exploit the revenue enhancements and cost-reduction opportunities offered by the Internet and optimally integrate e-business with existing channels. Toward this end, we propose a simple framework that managers can use to select the best e-business model to enhance their supply chain’s performance.