QUESTION 1A) Illustrate & explain the four value-adding domains identified by the Amit & Zott model, giving examples to support your answer. There are four domains suggested by Amit and Zott (2001). They include Lock-in, complementaries, efficiency, and novelty. Lock-inIn the dimension of lock-in, the context of the business-to-business and the nature of product that is based on the Internet service support are very important to be given consideration. An example is a worker who is at Philsoft Shoe Press Roll which is a shoe company based in Australia. The time that the customer will sepnd in the show press roll will be very intense and will be followed by periods where there is no work at all being done.
In the company, if there is a problem that cannot be solved by internal staff, then it would turn to a third party company which is specialized in related issues. The create-capture-keep strategy will make the customers to the supplier unwilling to change to another supplier because of switching costs. ComplementariesUsing the example of Philsoft Shoe Press Roll, it is clear that the Philsoft Shoe Press Roll is a very important component in the paper machine.
The Philsoft Shoe Press Roll is a very crucial part when compared to the other parts of the paper machines due to the fact that the part is not easily replaceable given the high price that is associated with this part. EfficiencyThe Philsoft Customer Center can be compared to the car display that is telling the owner when the time of service is due. As it is difficult to visit the customers face to face in the wide market, it is wise to use Customer Center which is a good complement.
This is especially good because the communication with the customers is documented. Novelty The fourth domain of the model is novelty. The reason for the development of this Internet-based service is to have competitive advantage over the rest of the competition. Customer centers should have a user forum. The invention of a customer forum at many multinational companies all over the world has been handy as the knowledge of the company is passed to the users.
An example is open-source software developers like the Ubuntu systems developers which have their forums where they discuss with the customers. b) 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. There is a relationship between Porter’s value chain and that of Amit & Zott. The identification of factors that play a large part in value creation is essential to link the e-business project development so that financial goals of the company can be achieved.
In this case, e-business improves efficiency of B2B transactions; reduce the times that it goes in the cycle and the cost of transactions. Drivers of efficiency in operation fall into the group of reducing cost. Apart from improving operation efficiency, there are also new opportunities that are used for creating value from extended enterprises as they are described by Amit and Zott (2001). This enhances revenue in so many ways. One example is the fact that e-business enables the mass customization and customer driven products.
There is also customized pricing that get to the customers through highly targeted promotions.