evaluate this integration. If this work is not seen as important since it is not a traditional
marketing activity, then the opportunities of increased online visibility and hence
number of visitors and sales will be reduced. Retailer Tesco has created its Price Check
initiative (www.tesco.com/pricecheck) to highlight its competitiveness by making its
competitor price survey available online. Of course, the most obvious examples of value
creation occur directly through the interface between the web site and the customer, for
example through detailed product information, product selection guides, personalised
product recommendations and online customer support facilities which involve reduc-
ing cost to serve and may have intangible benefits for the customer such as improved
recommendations or decreasing the purchase time.
Restructuring the internal value chain
Traditional models of the value chain (such as Figure 2.5(a)) have been re-evaluated with
the advent of global electronic communications. It can be suggested that there are some
key weaknesses in the traditional value chain model:
It is most applicable to manufacturing of physical products as opposed to services.
It is a one-way chain involving pushing products to the customer; it does not high-
light the importance of understanding customer needs through market research and
responsiveness through innovation and new product development.
The internal value chain does not emphasise the importance of value networks
(although Porter (1980) did produce a diagram that indicated network relationships).
A revised form of the value chain has been suggested by Deise et al. (2000); an adapta-
tion of this model is presented in Figure 2.5(b). This digital value chain starts with the
market research process, emphasising the importance of real-time environment scanning
for decision making. For each of the different types of organisation site introduced in
Chapter 1, there are opportunities to create value by processing information in new ways:
1 Customer information collected on atransactional e-commerce sitecan develop greater
understanding of the purchasing behaviour of its target customers, which can also be
analysed in terms of demographic profiles through tracking online shopping prefer-
ences and sequences.
2 Service-oriented relationship building sitescan collect information as part of creating a
dialogue using profiling forms, feedback forms and forums on the site enabling their
owners to better understand customer characteristics and purchasing behaviour.
3 Brand building sitesalso have opportunities to collect information about the profiles and
preferences of their site visitors or those in their target market using third-party sites.
4 Portal or media sitescan potentially use visitors to contribute content. Think of the
BBC web site which now has feedback on its news, sport and entertainment sites, so
adding value to its visitors. Even well-known media owner Rupert Murdoch has sug-
gested that online newspapers consider recruiting bloggers to add value to their
audiences (Murdoch, 2005).
External value chains and value networks
Reduced time to market and increased customer responsiveness can be achieved through
reviewing the efficiency of internal processes and how information systems are
deployed. However, these goals are also achieved through consideration of how partners
can be involved to outsource some processes that have traditionally been considered to
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