FIRM VALUE WEBSWhile firms produce value through their value chains, they also rely on the value chains of their partners—their suppliers, distributors, and delivery firms. E-commerce creates new opportunities for firms to cooperate and create a value web. A value web is a networked business ecosystem that uses e-commerce technology to coordinate the value chains of business partners within an industry, or at the first level, to coordinate the value chains of a group of firms. Figure 2.6 illustrates a value web. Internet technology enables firms to create an enhanced value web in cooperation with their strategic alliance and partner firms, customers, and direct and indirect suppliers.A value web coordinates a firm’s suppliers with its own production needs using an Internet-based supply chain management system. We discuss these B2B systems in Chapter 12. Firms also use the Internet to develop close relationships with their logistics partners. For instance, Amazon relies on UPS tracking systems to provide its customers with online package tracking, and it relies on the U.S. Postal Service systems to insert packages directly into the mail stream. Amazon has partnership relations with hundreds of firms to generate customers and to manage relationships with customers. In fact, when you examine Amazon closely, you realize that the value it delivers to customers is in large part the result of coordination with other firms and not simply the result of activities internal to Amazon. The value of Amazon is, in large part, the value delivered by its value web partners. This is difficult for other firms to imitatein the short run.
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