《电子商务 E-business》阅读文献_E-business development for competitive advantages

INFARMATION MANAGEMENT ELSEVIER Information Management 40(2003)581-590 www,elsevier.com/locatedsw E-business development for competitive advantages a case study Dien d. phan Department of Business Computer Information Systems, St Cloud State University, St. Cloud, MN 56301, USA Received 5 July 2001; received in revised form 4 March 2002: accepted 20 July 2002 Abstract Electronic business(e-business)today plays a major role in the worlds economy. Forester Research estimated that, by 2003 the value of e-commerce of US and Europe will reach US$ 3 trillion. As the e-marketplace becomes more lucrative, it attracts new entrants and created turmoil in the market. There have been many spectacular successes and many failures This paper presents a study of e-business competitive advantage strategies using the s at Intel. After the initial deployment of its e-business pilot system in July 1998, Intel ramped USS I billion sales on e-business each month for the rest of the year. Intel became the fifth most profitable company in the Us in the year 2000, up from the rank of eighth in 1999. Despite the rapid decline in stock values of many Internet related companies and the recession, Intel is still successful. By the end of 2001, Intel was the seventh largest market capitalization company in the US C 2002 Elsevier Science B.V. All rights reserved. Keywords: E-business; E-commerce; B2B; Supply chain; Value chain: Competitive advantage; Strategy: Extranet 1. Introduction Gates, frequently expressed his fear that Microsoft is about 2 years away from failure, that somewhere out E-business has received much attention from entre- there is a formidable competitor, unborn and preneurs, executives, investors, and industry observers unknown, who will use better business models to cently. As information technologies (T) develop, put companies like Microsoft into obsolescence. novel ways of business process redesign succes emerged, creating turmoil in the industry. Organiza- probably those that can integrate Internet technology tions today frequently integrate Internet technology to to all activities of the enterprise-wide value chain ocesses in ways that strengthen their com petitive advantages. Success breeds imitation and Invites more entnes 2. Ebusiness concepts, strategies, and The rapid expansion of e-commerce values in the frameworks past few years convinced many people that a new economy has emerged. Chairman of Microsoft, Bill Based on various types of trading partners, there are many categories of e-business, for example: Business Tel:+1-320-255-2174;fax:+1-320-203-6074 to Business(B2B ), Business to Consumer (B2C) E-mail address: phan@stcloudstate edu(DD. Phan Consumer to Business(C2B), Consumer to Consumer 0378-7206/02/- see front matter c 2002 Elsevier Science B V. All rights reserved. PI:S0378-7206(02)00089-7

E-business development for competitive advantages: a case study Dien D. Phan* Department of Business Computer Information Systems, St. Cloud State University, St. Cloud, MN 56301, USA Received 5 July 2001; received in revised form 4 March 2002; accepted 20 July 2002 Abstract Electronic business (e-business) today plays a major role in the world’s economy. Forester Research estimated that, by 2003, the value of e-commerce of US and Europe will reach US$ 3 trillion. As the e-marketplace becomes more lucrative, it attracts new entrants and created turmoil in the market. There have been many spectacular successes and many failures. This paper presents a study of e-business competitive advantage strategies using the success at Intel. After the initial deployment of its e-business pilot system in July 1998, Intel ramped US$ 1 billion sales on e-business each month for the rest of the year. Intel became the fifth most profitable company in the US in the year 2000, up from the rank of eighth in 1999. Despite the rapid decline in stock values of many Internet related companies and the recession, Intel is still successful. By the end of 2001, Intel was the seventh largest market capitalization company in the US. # 2002 Elsevier Science B.V. All rights reserved. Keywords: E-business; E-commerce; B2B; Supply chain; Value chain; Competitive advantage; Strategy; Extranet 1. Introduction E-business has received much attention from entre￾preneurs, executives, investors, and industry observers recently. As information technologies (IT) develop, novel ways of business process redesign (BPR) emerged, creating turmoil in the industry. Organiza￾tions today frequently integrate Internet technology to redesign processes in ways that strengthen their com￾petitive advantages. Success breeds imitation and invites more entries. The rapid expansion of e-commerce values in the past few years convinced many people that a new economy has emerged. Chairman of Microsoft, Bill Gates, frequently expressed his fear that Microsoft is about 2 years away from failure, that somewhere out there is a formidable competitor, unborn and unknown, who will use better business models to put companies like Microsoft into obsolescence. And the most successful new business models are probably those that can integrate Internet technology to all activities of the enterprise-wide value chain. 2. E-business concepts, strategies, and frameworks Based on various types of trading partners, there are many categories of e-business, for example: Business to Business (B2B), Business to Consumer (B2C), Consumer to Business (C2B), Consumer to Consumer Information & Management 40 (2003) 581–590 * Tel.: þ1-320-255-2174; fax: þ1-320-203-6074. E-mail address: phan@stcloudstate.edu (D.D. Phan). 0378-7206/02/$ – see front matter # 2002 Elsevier Science B.V. All rights reserved. PII: S 0378-7206(02)00089-7

DD. Phan/Information &e Management 40(2003)581-590 (C2C), People to People(P2P), Government to Citizen close frequently, creating rapid changes in the market (G2C), Citizen to Government( C2G), Exchange to The prevalence of technical innovations may be Exchange (E2E) and Intra-business (Organization ular, sporadic, or seldom; these patterns of change Unit to Organization Unit). Without the use of face have different implications for business organizations to face operations, all e-business transactions are When innovations occur often, a niche may open up performed electronically by using computer and com- and the organization competes to take the advantage of munication networks. The three principal categories cost savings and market penetration that often results in better profits and market share 1. Electronic markets or e-marketplaces: buying and From the Is perspective, the value chain model [9] selling goods and services highlights interdependence activities in businesses 2. Inter-organizational systems: facilitatin where competitive strategies and intra-organization flow of goods, and where IS are most likely to have strategic impact nformation. communication, and collabor ( Fig. 1) As information technologies developed, novel ways ervice: providing customer service, of business process redesign emerged. Most organiza- ng complaints, tracking or tions today use Internet technology to redesign their processes in ways that provide new competitive 2.1. Information systems strategies for competitive advantage. Through the infrastructure of existing B2B exchanges in the e-marketplaces, many organi zations will eventually be able to integrate activities of their value chain encompassing suppliers, customers, Studying the evolution of business organizations and distribution channels within an industry or across has received much of attention in organization theory industries. The potential of e-business is so great that and MIs research [2, 8] cause organizations are not internally self-sufficient, they require resources from many believe that e-business is the new economy that the environment, and thus become interdependent decides the success of future business organizations with those elements of the environment with which Andy Grove, Chairman of Intel boldly stated in 1998: they transact. Organizational and ecological theorist ithin 5 years, all companies will be Internet com [6,7] argued that organizations develop internal and panies or they would not be companies"[4]. Despit external strategies which seek to minimize the uncer the fact this prediction was greatly exaggerated, this tainty arising from dependence on the environment for statement showed a strong belief in the potential of As the techno dvances and the e-business However, Porter [10] has argued that the ke market develop rows, market niches open and tion is not whether to deploy e-business now to take advantage of Internet technology, but how to deploy it Firm Infrastructure: Administration and Management Human resources Technolo OutboundMar Logistics and Sales Fig. 1. The value chain model

(C2C), People to People (P2P), Government to Citizen (G2C), Citizen to Government (C2G), Exchange to Exchange (E2E) and Intra-business (Organization Unit to Organization Unit). Without the use of face to face operations, all e-business transactions are performed electronically by using computer and com￾munication networks. The three principal categories of e-business applications are: 1. Electronic markets or e-marketplaces: buying and selling goods and services. 2. Inter-organizational systems: facilitating inter￾and intra-organization flow of goods, services, information, communication, and collaboration. 3. Customer service: providing customer service, help, handling complaints, tracking orders, etc. [13]. 2.1. Information systems strategies for competitive advantage Studying the evolution of business organizations has received much of attention in organization theory and MIS research [2,8]. Because organizations are not internally self-sufficient, they require resources from the environment, and thus become interdependent with those elements of the environment with which they transact. Organizational and ecological theorists [6,7] argued that organizations develop internal and external strategies which seek to minimize the uncer￾tainty arising from dependence on the environment for resources. As the technology advances and the e-business market develops and grows, market niches open and close frequently, creating rapid changes in the market. The prevalence of technical innovations may be reg￾ular, sporadic, or seldom; these patterns of change have different implications for business organizations. When innovations occur often, a niche may open up and the organization competes to take the advantage of cost savings and market penetration that often results in better profits and market share. From the IS perspective, the value chain model [9] highlights interdependence activities in businesses where competitive strategies can be best applied and where IS are most likely to have strategic impact (Fig. 1). As information technologies developed, novel ways of business process redesign emerged. Most organiza￾tions today use Internet technology to redesign their processes in ways that provide new competitive advantage. Through the infrastructure of existing B2B exchanges in the e-marketplaces, many organi￾zations will eventually be able to integrate activities of their value chain encompassing suppliers, customers, and distribution channels within an industry or across industries. The potential of e-business is so great that many believe that e-business is the new economy that decides the success of future business organizations. Andy Grove, Chairman of Intel boldly stated in 1998: ‘‘Within 5 years, all companies will be Internet com￾panies or they would not be companies’’ [4]. Despite the fact this prediction was greatly exaggerated, this statement showed a strong belief in the potential of e-business. However, Porter [10] has argued that the key ques￾tion is not whether to deploy e-business now to take advantage of Internet technology, but how to deploy it. Fig. 1. The value chain model. 582 D.D. Phan / Information & Management 40 (2003) 581–590

DD Phan/Information Management 40(2003)581-590 Gaining competitive advantage requires building on salty, and e-trust. Because the use of e- the proven principles of effective strategy. Business commerce technology tends to reduce the switching enterprise can gain competitive advantage by opera- cost, it is important for e-business companies to build tional effectiveness, doing the same as your compe- its strategic position by focusing on e-loyalty which tutors do but doing it better, and by strategic encompasses good relationships and trust with value positioning, doing things differently from competitor chain partners. B2B procurement of direct go in a way that delivers a unique type of value to requires a relationship, usually long-term, with a customers. Key principles of strategic positioning who will deliver are: goals that aim at long-term return on investment, With mission critical buying, companies cannot just distinctive value chains, trade-offs for uniqueness in buy from anyone in the e-marketplace. If an order for the market, strategies that fit together, and continuity supplies goes unfilled, the missing goods could shut of corporate direction. down a production line or an entire factory. In B2B Porter also argued that Internet technology should procurement of direct goods, tight integration with be used as a"complement to "rather than a"cannibal major suppliers along the supply chain is absolutely of"traditional ways of competing. The companies essential that will be most successful will be those that use e Major success factors for e-business include business to make traditional business processes better [5,11,15 and those that invent and implement new combina- tions of virtual and physical activities. Without under- Internet technology fully integrated into the com- pany's overall strategy. standing how to deploy Intemet technology, entering Competitive advantage maintained in both opera e-business can bring disastrous consequences In recent years, the business community and the tional efficiency and distinctive strategic position public have been confused by distorted market signals of many dotcoms, such as the exponential growth in Basis of competition not shifted from traditional number of customers, artificially-low operation costs, competitive advantage, such as cost, profit, quality, and inflated revenues. Some companies even resorted service. and features. to dubious accounting methods to inflate revenues and Companys strategic positioning well maintained. deflate costs. Somehow these distorted signals have Support from top management. misled many people into a belief that the e-market- Buyer behavior and customer personalization places have rendered old rules of competition obso- Quick time to market. lete. As a consequence, many companies decided to Right systems infrastructure Good cost control ift their fundamental ways of doing business from quality, feature, innovations, service, and profits Good e-business education and training to employ toward mainly low price and revenue growth. Without ees, management and custom long-term profits, they failed. Customers and partners'expectations well-mana To succeed, companies will need to search and implement innovative strategies that capitalize on both Good products and services offered by e-business. the power of the Internet and the changes in both Current e-business systems expanded to cover entire supply chain. traditional and electronic markets. Companies that run New competitors and market shares tracked e-business should have tight supply chain relation hips with customers, suppliers, and distributors [12] Website of high quality that meets or exceed user In addition, the supply chain within e-business com- expectations. panies also continues to change. Businesses need to be Companys virtual marketplace established sure that customers and suppliers can easily gain access to their websites to gain important product 3. Intel and its e-business development strategies information for decision making. Currently, the major barrier to customersand Intel Corp. located in Santa Clara, California, is the suppliers access to the is ease and speed of world's largest producer of Integrated Circuits Chips

Gaining competitive advantage requires building on the proven principles of effective strategy. Business enterprise can gain competitive advantage by opera￾tional effectiveness, doing the same as your compe￾titors do but doing it better, and by strategic positioning, doing things differently from competitors in a way that delivers a unique type of value to customers. Key principles of strategic positioning are: goals that aim at long-term return on investment, distinctive value chains, trade-offs for uniqueness in the market, strategies that fit together, and continuity of corporate direction. Porter also argued that Internet technology should be used as a ‘‘complement to’’ rather than a ‘‘cannibal of’’ traditional ways of competing. The companies that will be most successful will be those that use e￾business to make traditional business processes better and those that invent and implement new combina￾tions of virtual and physical activities. Without under￾standing how to deploy Internet technology, entering e-business can bring disastrous consequences. In recent years, the business community and the public have been confused by distorted market signals of many dotcoms, such as the exponential growth in number of customers, artificially-low operation costs, and inflated revenues. Some companies even resorted to dubious accounting methods to inflate revenues and deflate costs. Somehow these distorted signals have misled many people into a belief that the e-market￾places have rendered old rules of competition obso￾lete. As a consequence, many companies decided to shift their fundamental ways of doing business from quality, feature, innovations, service, and profits toward mainly low price and revenue growth. Without long-term profits, they failed. To succeed, companies will need to search and implement innovative strategies that capitalize on both the power of the Internet and the changes in both traditional and electronic markets. Companies that run e-business should have tight supply chain relation￾ships with customers, suppliers, and distributors [12]. In addition, the supply chain within e-business com￾panies also continues to change. Businesses need to be sure that customers and suppliers can easily gain access to their websites to gain important product information for decision making. Currently, the major barrier to customers’ and suppliers’ access to the web is ease and speed of access, e-loyalty, and e-trust. Because the use of e￾commerce technology tends to reduce the switching cost, it is important for e-business companies to build its strategic position by focusing on e-loyalty which encompasses good relationships and trust with value chain partners. B2B procurement of direct goods requires a relationship, usually long-term, with a vendor who will deliver a known quality of goods. With mission critical buying, companies cannot just buy from anyone in the e-marketplace. If an order for supplies goes unfilled, the missing goods could shut down a production line or an entire factory. In B2B procurement of direct goods, tight integration with major suppliers along the supply chain is absolutely essential. Major success factors for e-business include [5,11,15]: Internet technology fully integrated into the com￾pany’s overall strategy. Competitive advantage maintained in both opera￾tional efficiency and distinctive strategic position￾ing. Basis of competition not shifted from traditional competitive advantage, such as cost, profit, quality, service, and features. Company’s strategic positioning well maintained. Support from top management. Buyer behavior and customer personalization. Quick time to market. Right systems infrastructure. Good cost control. Good e-business education and training to employ￾ees, management and customers. Customer’s and partners’ expectations well-mana￾ged. Good products and services offered by e-business. Current e-business systems expanded to cover entire supply chain. New competitors and market shares tracked. Website of high quality that meets or exceed user expectations. Company’s virtual marketplace established. 3. Intel and its e-business development strategies Intel Corp. located in Santa Clara, California, is the world’s largest producer of Integrated Circuits Chips D.D. Phan / Information & Management 40 (2003) 581–590 583

DD. Phan/Information Management 40(2003)581-590 today. Incorporated in 1968, Intel supplies the com- Access to the site was restricted to Intel's authorized puting and communications industries with chips, business partners and customers boards and systems building blocks that are Project teams that participated in the early devel to computers, servers, and networking and opment of the e-business system included: nications products. Its products are offered levels of integration, and are used by industry a project planning team that consisted of customer, bers to create advanced computing and communica- technical and logistical representatives was created to define the scope and objective of the pro tions systems. Today, the company has evolved from a. Business analysts were brought in during the early processor maker into a supplier of network and server ardware Internet hosting services, and other e-busi- stages to help define the business workflow and to mation was given to cu hess components. Its technological leadership ranges. Intels sales and marketing staff were told to study from microprocessor design to advanced manufactur and define how to work with customers via the Most of Intel's business is in the PC market. In past business system. years, it was under intense competition from other Intel's Planning and Logistics Group was included chip makers, such as Advanced Micro devices on the planning team to help the It department to (AMD), Texas Instruments, Motorola, and IBM. It develop the solutions to integrate the new e-busi ness with existing business activities then customized its paper catalogs and sent them to The it department was positioned as an"enabler potential customers along with product availability information. Until summer 1998, this process w of business. Its role was to implement the solutions performed entirely on paper. However in 1996, when from the Planning and Logistic Groups key value chain partners, such as Dell Computers and Cisco Systems, started their B2B e-procurement sys- 3.2. Intel's mission and goals tems, they pressured Intel to convert B2B activities on with over 50% of its revenues and many customers In 1997, Intel began to investigate the feasibility of coming from outside the US, the benefits of a global e- building an e-business system. The project started business system for Intel were too great to be ignored with the forming of a Virtual Worldwide E-Business To support over US$ 25 billion annual sales in 1998 Project Team. Because the project strongly empha- and a worldwide network of business partners, resel- sized customer market needs, Intel's sales and market- lers, and original equipment manufacturers(OEM), ing was given overall management responsibility. At Intel had to improve its efficiency by automating its that time, converting all operations to e-business for a business to business processes. Traditional business company with a large global operation was perceived processes at Intel at that time were too slow and thus a as a daunting task. Under the mandate from the chair- decision was made to deploy a web-based order man to make Intel an 'Internet company, Sandra management system. Morris, Vice President of Sales and Marketing Group, Intels early mission was to use Internet technology and Director of Internet Marketing and E-Commerce to improve the competitive advantage of its value at Intel stated: "a lot of people feel overwhelmed chain activities. The goals were to design and deploy ‘ The task a worldwide e-business solution for its current busi- ness, and build an infrastructure that worked with 3. 1. Project structure existing business processes. The intent was to inte- grate Internet technology into the company's overal From pressure exerted by many value chain partners strategy in order to gain competitive advantage in both who wanted Intel to play a leadership role, Intels operational effectiveness and strategic positioning management decided to advise customers that Intel In order to avoid potential software engineering was serious about e-business. It created an'e-business problems created by the enormous task of building program(a self-service extranet) which focused on a new Intels e-business system, Intel development rocurement and customer support for Intel products. teams started cautiously. Rather than cannibalizing the

today. Incorporated in 1968, Intel supplies the com￾puting and communications industries with chips, boards and systems building blocks that are integral to computers, servers, and networking and commu￾nications products. Its products are offered at various levels of integration, and are used by industry mem￾bers to create advanced computing and communica￾tions systems. Today, the company has evolved from a processor maker into a supplier of network and server hardware, Internet hosting services, and other e-busi￾ness components. Its technological leadership ranges from microprocessor design to advanced manufactur￾ing and packaging. Most of Intel’s business is in the PC market. In past years, it was under intense competition from other chip makers, such as Advanced Micro Devices (AMD), Texas Instruments, Motorola, and IBM. It then customized its paper catalogs and sent them to potential customers along with product availability information. Until summer 1998, this process was performed entirely on paper. However in 1996, when key value chain partners, such as Dell Computers and Cisco Systems, started their B2B e-procurement sys￾tems, they pressured Intel to convert B2B activities on￾line. In 1997, Intel began to investigate the feasibility of building an e-business system. The project started with the forming of a Virtual Worldwide E-Business Project Team. Because the project strongly empha￾sized customer market needs, Intel’s sales and market￾ing was given overall management responsibility. At that time, converting all operations to e-business for a company with a large global operation was perceived as a daunting task. Under the mandate from the chair￾man to make Intel an ‘Internet company,’ Sandra Morris, Vice President of Sales and Marketing Group, and Director of Internet Marketing and E-Commerce at Intel stated: ‘‘a lot of people feel overwhelmed by ‘The Task’.’’ 3.1. Project structure From pressure exerted by many value chain partners who wanted Intel to play a leadership role, Intel’s management decided to advise customers that Intel was serious about e-business. It created an ‘e-business program’ (a self-service extranet) which focused on procurement and customer support for Intel products. Access to the site was restricted to Intel’s authorized business partners and customers. Project teams that participated in the early devel￾opment of the e-business system included: A project planning team that consisted of customer, technical and logistical representatives was created to define the scope and objective of the project. Business analysts were brought in during the early stages to help define the business workflow and to assess how information was given to customers. Intel’s sales and marketing staff were told to study and define how to work with customers via the e￾business system. Intel’s Planning and Logistics Group was included on the planning team to help the IT department to develop the solutions to integrate the new e-busi￾ness with existing business activities. The IT department was positioned as an ‘‘enabler’’ of business. Its role was to implement the solutions from the Planning and Logistic Groups. 3.2. Intel’s mission and goals With over 50% of its revenues and many customers coming from outside the US, the benefits of a global e￾business system for Intel were too great to be ignored. To support over US$ 25 billion annual sales in 1998 and a worldwide network of business partners, resel￾lers, and original equipment manufacturers (OEM), Intel had to improve its efficiency by automating its business to business processes. Traditional business processes at Intel at that time were too slow and thus a decision was made to deploy a web-based order management system. Intel’s early mission was to use Internet technology to improve the competitive advantage of its value chain activities. The goals were to design and deploy a worldwide e-business solution for its current busi￾ness, and build an infrastructure that worked with existing business processes. The intent was to inte￾grate Internet technology into the company’s overall strategy in order to gain competitive advantage in both operational effectiveness and strategic positioning. In order to avoid potential software engineering problems created by the enormous task of building a new Intel’s e-business system, Intel development teams started cautiously. Rather than cannibalizing the 584 D.D. Phan / Information & Management 40 (2003) 581–590

DD Phan/Information Management 40(2003)581-590 585 entire business structure, Intel project teams used an Because management, procurement, sales and iteration approach in building it first e-business sys marketing, and engineering functions tem. They first focused on building an extranet B2B chain partners and customers all have system to support direct customers on-line. We informational needs, Intel customized its websites picked one thing that we could build very quickly within customer accounts. being able to deliver and deploy to our customers, said Sandra Morris personalized information on-line allowed Intel to support multiple levels of the customer organiza- 3.3. E-business strategies for value chain tion in a manner that best met the individuals leeds. This makes it easier for every customer to Intel aimed to achieve its competitive advantage by do his/her own research and to take appropriate both operational efficiency and strategic positioning. action Customers visiting the intel extranet website 1. Operational efficiency: In order to improve effi- ow find their name and ciency, Intel helped its value chain partners connect available to them, based on their personal profile to the worldwide-web to access information on This user profile allows a customer to obtain con- line. to do this intel automated its order manage- fidential information important to him or her alone ment and information delivery system. The greates efficiency improvement in 1997 was to customers 3.4. E-business deployment who were not already electronically connected to Intel. By converting the"unwiredto " wired, The initial e-business pilot system launched in 1998 consisted of 240 one-stop shopping sites for customers PC-based on-line communication. By providing around the world. Using an iterative development access to real-time information, Intel allowed approach to build the system, Intel's e-business web customers to know more about of Intel products site was serving more than 350 top customer accounts and future direction. On-line access also made and thousands of individual users within the first year. customers feel more connected with access to more Personalized data and applications were tailored to Intel resources, and thus having a closer business users'needs to provide an individualized experience elationship Fig. 2 For Intel, having customers electronically ected brought multiple benefits. First, the com- 3.5. Quick deployment of access manager pany was able to move resources towards a more pplication efficient and productive technology. Second, sales people no longer needed to hand deliver con One of the early incremental development efforts at fidential product information as they had in the Intel after the launch of their e-business website was past. Third, potential sales were enormous, an Access manager application that automated the because Intel was dealing with billions of dollars creation of account user IDs and passwords to access of orders per quarter the unified environment known as the "landing 2. Distinctive strategic positioning in the value chain: Zone. In the past, Intel account supervisor often In 1998, Intel was well positioned with its Pentium spent over an hour in creating user IDs and passwords processor product lines and enjoyed a distinctive for a new customer. With the Landing Zone environ- strategic positioning in the market thanks to its ment, Intel customers may log into one place and have unique R&d programs and good supply chain access to many other intra/extranet sites; this conve- relationships with partners. To further strengthen nience attracted many users. "The people want to this position, Intel focused on building on-line come to the environment because it offers these relationships with direct customers, including common services of security and entitlement OEMs and distributors. Intel worked hard to commented M. Kantipudi, the B2B Platform and e convert its system and data from the old vendor- Content Application Manager of Intels Sales an centric model to the new customer -centric model Marketing Application Group

entire business structure, Intel project teams used an iteration approach in building it first e-business sys￾tem. They first focused on building an extranet B2B system to support direct customers on-line. ‘‘We picked one thing that we could build very quickly and deploy to our customers,’’ said Sandra Morris. 3.3. E-business strategies for value chain Intel aimed to achieve its competitive advantage by both operational efficiency and strategic positioning. 1. Operational efficiency: In order to improve effi- ciency, Intel helped its value chain partners connect to the worldwide-web to access information on￾line. To do this Intel automated its order manage￾ment and information delivery system. The greatest efficiency improvement in 1997 was to customers who were not already electronically connected to Intel. By converting the ‘‘unwired’’ to ‘‘wired,’’ Intel replaced traditional phone and fax lines to PC-based on-line communication. By providing access to real-time information, Intel allowed customers to know more about of Intel products and future direction. On-line access also made customers feel more connected with access to more Intel resources, and thus having a closer business relationship. For Intel, having customers electronically con￾nected brought multiple benefits. First, the com￾pany was able to move resources towards a more efficient and productive technology. Second, sales people no longer needed to hand deliver con- fidential product information as they had in the past. Third, potential sales were enormous, because Intel was dealing with billions of dollars of orders per quarter. 2. Distinctive strategic positioning in the value chain: In 1998, Intel was well positioned with its Pentium processor product lines and enjoyed a distinctive strategic positioning in the market thanks to its unique R&D programs and good supply chain relationships with partners. To further strengthen this position, Intel focused on building on-line relationships with direct customers, including OEMs and distributors. Intel worked hard to convert its system and data from the old vendor￾centric model to the new customer-centric model. Because management, procurement, sales and marketing, and engineering functions of value chain partners and customers all have different informational needs, Intel customized its websites within customer accounts. Being able to deliver personalized information on-line allowed Intel to support multiple levels of the customer organiza￾tion in a manner that best met the individual’s needs. This makes it easier for every customer to do his/her own research and to take appropriate action. Customers visiting the Intel extranet website now find their name and specific applications available to them, based on their personal profile. This user profile allows a customer to obtain con- fidential information important to him or her alone. 3.4. E-business deployment The initial e-business pilot system launched in 1998 consisted of 240 one-stop shopping sites for customers around the world. Using an iterative development approach to build the system, Intel’s e-business web￾site was serving more than 350 top customer accounts and thousands of individual users within the first year. Personalized data and applications were tailored to users’ needs to provide an individualized experience Fig. 2. 3.5. Quick deployment of access manager application One of the early incremental development efforts at Intel after the launch of their e-business website was an Access manager application that automated the creation of account user IDs and passwords to access the unified environment known as the ‘‘Landing Zone.’’ In the past, Intel account supervisor often spent over an hour in creating user IDs and passwords for a new customer. With the Landing Zone environ￾ment, Intel customers may log into one place and have access to many other intra/extranet sites; this conve￾nience attracted many users. ‘‘The people want to come to the environment because it offers these common services of security and entitlement ...’’ commented M. Kantipudi, the B2B Platform and e￾Content Application Manager of Intel’s Sales and Marketing Application Group. D.D. Phan / Information & Management 40 (2003) 581–590 585