The Four Value-Adding Domains Identified by the Amit & Zott Model - Assignment Example

E-Business Questions Name Course Instructor Date Illustrate & explain the four value-adding domains identified by the Amit & ‌Zott model, giving examples to support your answer Efficiencies This is probably the most important value drive in the model that Amit and Zott established. Some of the enhancements that are included within efficiency include the reduction in the costs that are used in transactions, achieving scope of economies as well as their scale and the reduction in the costs used in searches (Martin, 1995). For instance, customers have been giving positive feedback in relation to several companies and firms having a more convenient way of working owing t the increase in their efficiency. Complementaries Complementaries on the other hand are normally present when one is having goods that are bundled together, and it tends to provide more value as compared to having goods as being separate entities (Martin, 1995). Business models have the capability of creating value whenever they capitalize on complementaries within its activities. For instance, this is seen when firms are seen to co-operate and create an organization that aids in offering together. Lock-in The potential of a business model to be able to create value will also depend on the extent to which the engagement with customers is maintained and also the ability to be able to convince the customers to repeat transactions. This is the value driver known as the Lock-in, and it is concerned with the switching of costs by clients who have considered alterative products or services that are being offered by other firms (Martin, 1995). Examples of lock-in include; programs for customer loyalty, branding and even customization. Novelty This mainly consists of new ways in which transactions can be conducted, the innovation of a new service or even products (Martin, 1995). One good example is in the creation of a new mobile security service to offer to clients. Critically evaluate the role of Porter’s value chain in underpinning the efficiency sector of the Amit & Zott model, giving applied case study ‌examples to support your argument where appropriate. Value chain, or value chain analysis, is one of the most important concepts that is in use in business management. The value chain in essence is a chain of activities for a certain firm that operates in a certain specific industry. It is important to note that products pass through the chain, more so in a specific order and they tend to gain more value as they do so. This value is gained at every stage of every activity. Thus the chain of activities that transpires serves to add more value to the products as compared to the sum of all added values to all the activities. The efficiency sector of the Amit and Zott model being based on ensuring that efficiency within the firm is achieved, thus the value chain can aid in ensuring that efficiency is maximized. This efficiency is aimed at being achieved by ensuring that the running costs are cut down while at the same time aiming to ensure that the achievement of the scope of economies is attained (Brown, 1997). Looking at the example of one company that has had success with the value chain analysis in ensuring efficiency in line with the Amit and Zott model, is Metso Paper, which in a bid to reach all its customers who span from countries from all over the world, had to turn to E-Business to be able to interact with them. Thus, ensuring efficiency through the value chain ensures that the quality of service that the customers receive is added as it goes through the chain, while there is no compromise on the achievement of the scope of economics. Explain the function of Enterprise Resource Planning (ERP) within e-business strategies. Enterprise Resource Planning (ERP) is a computer system that is in most cases integrated, and normally used in the management of internal resources or even external resources. These resource may include assets that are tangible such as houses, vehicles or buildings especially in the case where they are located far away from the business location itself, the management of financial resources such as cash that is overseas in foreign accounts or even whenever firms that use E-business need to transact their businesses with clients who are located in areas that are not within their locality, the management of material, for instance companies that tend to export certain materials to regions that are far away, and have their stores in different locations from their main offices, tend to use Enterprise Resource Planning (ERP) to manage such materials in terms of keeping track of the number of units being shipped and the number of units that are remaining in the stores. Human resources can also be managed by the use of Enterprise Resource Planning (ERP) by businesses that are keen on using the E-business strategy (Grant et al, 2006). Human resource management can be in the case where such businesses employ workers that work from locations that are far away from their main offices, or even workers that work from home, and this mainly tends to cut on costs that are related with office space and logistics. The integration of different functional areas of a business by the use of Enterprise Resource Planning (ERP) can ensure productivity and efficiency, thanks to proper communication. Critically evaluate the role of Balanced Scorecards for the effective ‌achievement of ERP objectives. Balanced scorecards are strategic performance tools that most businesses use in the management of their businesses. The Balanced Scorecards is a report that is semi structured and mostly used by managers to keep track of and monitor the activities that the workers in their organizations are undertaking, as well as keeping an eye on the consequences of these actions that these staff is bound to have in their day to day activities. This helps the managers to be able to keep everything under their control and even manage the activities of the firm. The Balanced Scorecards in most cases is normally supported by automations tools and designs are methods that are proven like the Enterprise Resource Planning (ERP). Balanced Scorecards can aid in the achievement of the objectives of Enterprise Resource Planning (ERP), for instance to achieve the goal of order tracking from the initial stages of acceptance up to the final stage of fulfillment, the Balanced Scorecards can enable the managers of the firms to be able to monitor the whole process remotely (Grant et al, 2006). To achieve the objective of the Enterprise Resource Planning (ERP), to ensure that the engineering of the design is perfect that is ensuring that the product is made in the best way possible, Balanced Scorecards can ensure that the products are made in the best way possible through the use of monitoring by the managers of the organization. The management of the inter dependencies that are involved in the complex process that are involved in the bill of materials can also be managed by the managers by the use of Balanced Scorecards and thus fulfilling the objective of Enterprise Resource Planning (ERP) (Grant et al, 2006). Briefly explain why many businesses choose not to become e-business ‌enabled. One of the reasons why most business do not chose to be involved with e-business is the fact that it is has sectoral limitations. This will mean that such business will be unable to grow in certain sectors due to the limitations in some products or even sector limitations. For instance a business that deal with food items are unable to achieve much growth in their sales or even the revenue that they generate due to reasons that are very practical for instance, most businesses dealing in this industry segment have perishable items (Grant et al, 2006). It is rare for consumers to go looking for food on the internet as they would rather go on a buy the food in person after due inspection. This is one of the reasons that discourage most businesses from engaging in e-business activities, more so the businesses that are established in the food industry segment. The solutions for the optimization of e-business also tend to be very costly for most of the businesses. There are a number of substantial resources that are required to be able to redefine the product lines that a business has in order to be able to sell their products online. Some of the processes that may be involved include upgrading the computer systems that firm or a business has already put in use, retraining new personnel who are able to use the new technology that has been put in place and the updating of the company websites to be in line with the new business strategy. This will cost money and will require resources and many other processes that most businesses are not ready to engage in, and void their efficiency (Grant et al, 2006). Critically evaluate any two reasons from your answer to part (a) using a case study examples to support your arguments as appropriate. One of the reasons why most business do not chose to be involved with e-business is the fact that it is has sectoral limitations. This will mean that such business will be unable to grow in certain sectors due to the limitations in some products or even sector limitations. For instance Mac Donald’s as a business that deals with food items is unable to achieve much growth in its sales or even the revenue that it generates due to reasons that are very practical for instance, Mac Donald’s deals with perishable items. It is rare for consumers to go looking for food on the internet as they would rather go on a buy the food in person after due inspection. This is one of the reasons that discourage most businesses from engaging in e-business activities, such as the classic example of a huge franchise such as Mac Donald’s. The solutions for the optimization of e-business also tend to be very costly for most of the businesses. Taking an example of a small business such as Metso Paper which is a small scale business, there are a number of substantial resources that are required to be able to redefine the product lines that it has in order to be able to sell their products online. Some of the processes that may be involved include upgrading the computer systems that they have already put in use, retraining new personnel who are able to use the new technology that has been put in place and the updating of the company websites to be in line with the new business strategy. This will cost money and will require resources and many other processes that such a small scale business is unable to achieve. Explain why an e-business organization might be better-placed to outsource elements of their business activities than a conventional business. An e-business organization is much better suited to outsource some of the elements of their business mainly due to worldwide presence which happens to be the main reason. Worldwide presence is one of the biggest advantages of conducting business online. This means that such businesses can be able to outsource some of their business activities to other companies and individuals, irrespective of the geographical location on the globe. Some of the activities that businesses could outsource include the provision of certain services such as data entry, writing services and web hosting, as it is seen in most of the companies that nowadays operate online businesses (Loh et al, 2004). E-business enable a much more cost effective marketing approach, thus such businesses can outsource the marketing element of their business to other firms, more so the firms that are engaged in online marketing. Such firms will be able to ensure that these businesses cover a much wider range as they aim to get more customers to be loyal to their products (Loh et al, 2004). Another element that these businesses that are involved in e-business could outsource is customer service. These customers can avoid taking the long trip to their main offices and thus saving both the customer and the business valuable time and money in terms of human resource required (Loh et al, 2004). Critically analyze the arguments against outsourcing as an ERP strategy. Outsourcing as an Enterprise Resource Planning (ERP) strategy can some disadvantages such as the fact that it tends to limit the customization of the software that is used in Enterprise Resource Planning (ERP) (Head, 2005). This limitation can spill over to the companies’ that are being outsourced to. Customization can be limited in terms of the manner in which the business that is outsourcing may be different to the company that is being outsourced to and thus the objective of Enterprise Resource Planning (ERP) may not be met. The sharing of some internal information between the two companies that are involving in the outsourcing process may be tricky as some companies deal with very confidential information (Head, 2005). For instance, a hospital that outsources to another company may have the integrity of the patients records compromised and thus may tend to breach the code of ethics that is practiced in the medical profession. Outsourcing as a strategy that is used in Enterprise Resource Planning (ERP) may tend to limit some organizations, especially those that have large departments which are large and have independent sources. This will tend to limit the productivity of that given enterprise and thus outsourcing may at times be limiting to these large departments that are separate as an Enterprise Resource Planning (ERP) strategy (Head, 2005). Finally, outsourcing as an Enterprise Resource Planning (ERP) strategy may at times be too rigid to adapt to certain specific workflows that some companies are accustomed to. This will limit the productivity of such companies if they outsource. Briefly explain the main reasons for the development of Customer Relationship Management (CRM) software in e-business. Customer Relationship Management (CRM) is a strategy that is widely accepted and broadly recognized in the management of the interactions that are involved between businesses and clients or customers. It mainly involves the use of technology in the synchronization; organization and automation of the business processes which include sales, marketing and even customer care and technical support. The development of Customer Relationship Management (CRM) software in e-business aids in the streamlining of sales and the marketing process, thus cutting on costs that are associated with these process while at the same time saving on the time, thus in the long run translating into increase in sales and thus productivity (TechTarget, 2009). The use of Customer Relationship Management (CRM) software in e-business can also improve service thus increasing the loyalty that the clients have towards the products of the company as well as the retention of customers (TechTarget, 2009). This will mean that the business will succeed when the development of the Customer Relationship Management (CRM) software is done. The development of Customer Relationship Management (CRM) software in e-business also aids in better profiling and targeting and thus the appropriate customers can be targeted and approached to ensure that the amount of sales that the company garners is either maintained or even increased (TechTarget, 2009). Critically evaluate the limitations of CRM systems within e-business giving examples where appropriate. It is important to note that the advantages of the development of Customer Relationship Management (CRM) software in the e-business systems outweigh the disadvantages that they have. Many companies are still unable to leverage these tools that are present in Customer Relationship Management (CRM) to make sure that they align sales, service and marketing to serve the firm in the best way possible (TechTarget, 2009). For instance, a company may put in place the Customer Relationship Management (CRM) software but still have some other elements of customer satisfaction lacking such as their duties in Corporate Social Responsibility, which will tend to drive away some of the clients. Some of the tools involved may be complex in their implementation more so in the large companies. Take for example the case of Apple Inc. which is a large company and is internationally recognized and uses the Customer Relationship Management (CRM) software, may have trouble in implementing these tools to all the countries that they have clients in especially in the third world countries, thus Customer Relationship Management (CRM) software may have some limitations. References Grant, David; Richard Hall, Nick Wailes, Christopher Wright (March 2006). "The false promise of technological determinism: the case of enterprise resource planning systems". New Technology, Work & Employment 21 (1): 2–15. Head, Simon (2005). The New Ruthless Economy. Work and Power in the Digital Age. Oxford. Loh, Tee Chiat; Lenny Koh Siau Ching (September 2004). "Critical elements for a successful ERP implementation in SMEs". International Journal of Production Research 42 (17): 3433–3455. Martin, James (1995). The Great Transition: Using the Seven Disciplines of Enterprise Engineering. New York: AMACOM.  T. Brown. Using norms to improve the interpretation of service quality measures, The Journal of Services Marketing, Vol. 11, No. 1, pp. 66-80, 1997. TechTarget (2009) Strategy Checklist: Planning for CRM and Customer Service Success New York: AMACOM. Read More