ACCA Strategic Professional · Strategic Business Leader

E-business and the Value Chain for ACCA SBL

E-business means using digital technology across the whole organisation, not just selling online. To solve a question, define the terms, apply Porter's value chain to the scenario's activities, show where technology adds value or cuts cost, then weigh the benefits and risks and recommend an approach.

What this chapter covers

This chapter covers how digital technology changes the way a business creates value. It starts with definitions: e-business covers all internal and external processes done electronically, e-commerce is buying and selling electronically, and e-marketing is using digital channels to reach and keep customers. Keep these three apart, because examiners do.

The middle of the chapter applies models. Porter's value chain splits a business into primary and support activities and asks where technology can lift margin. The value network and electronic supply chain management widen the view to suppliers, partners and customers, and show how data sharing can cut cost and delay. You then meet strategy models and digital business models, which help you judge what a business should do online.

The chapter links to the rest of SBL in several ways. It feeds strategic position and choice, because technology can change competitive advantage. It links to risk, governance and data, because digital systems bring cyber and control issues. It also links to change and leadership, because implementing e-business means managing people and projects. In a case study it rarely appears alone. You will use it inside a wider task.

SBL is a case-study exam where you earn technical marks for applying models to the scenario and professional skills marks for how you analyse and communicate. Digital change appears in many cases, as an opportunity, a threat or part of a recommendation. If you can apply the value chain and weigh benefits against risks quickly and with evidence from the case, you gain marks in tasks that are not labelled e-business. The models are simple. The skill is using them selectively and commercially, and that takes practice.

E-business: value chain: topics in the order to study them

1E-business, E-commerce and E-marketing DefinitionsStart here because every later topic uses these terms, and mixing them up costs credibility.
2Porter's Value Chain and the Impact of E-businessThis is the core model, and you need it before you can widen the view to networks.
3Value Network and Electronic Supply Chain ManagementIt extends the value chain beyond the firm to suppliers, partners and customers.
4E-business Strategy Models and Digital Business ModelsOnce you know where technology adds value, you can judge which strategic and business model fits.
5Benefits, Risks and Implementation Issues of E-businessFinish with evaluation, because recommendations need a balanced view of gains, risks and delivery.

How to prepare E-business: value chain

Aim to understand each model well enough to use it on a new scenario, not to recite it. Work in short sessions that suit a phone and a working day.

Write one-line definitions of e-business, e-commerce and e-marketing in your own words, with one example of each.
Draw Porter's value chain from memory. Next to each activity, note one way technology could change it, such as online ordering, automated inventory or digital recruitment.
Sketch a value network for a business you know. Mark where information flows between supplier, firm and customer, and what delay or cost it removes.
Learn the strategy and digital business models as questions to ask of a case: who pays, how is value created and what does the customer gain.
Build a benefits and risks list, then add implementation issues such as cost, skills, system integration, resistance and security. Practise turning each into advice.
Take a past case study extract and write a short answer using the structure: point, case evidence, impact, recommendation. Check you have shown professional skills.
Revise by timing yourself. Give a 10-minute written answer on how technology could change a business's value chain.

Common mistakes in E-business: value chain

Using e-business and e-commerce as if they mean the same thing.
Fix: Define each term briefly in your answer and state which one the case is about.
Listing the value chain activities without applying them to the scenario.
Fix: Pick the two or three activities most affected in the case and explain the impact with case facts.
Treating technology as only a benefit.
Fix: Always weigh benefits against risks and implementation issues before recommending.
Ignoring the wider network of suppliers and customers.
Fix: Ask who else shares data or value with the firm and how the relationship changes.
Giving generic advice that could apply to any company.
Fix: Quote case details, such as customers, products and current systems, and tie each point to them.
Writing about e-business with no recommendation.
Fix: Reserve time to give a clear, justified recommendation, since it earns commercial acumen and communication marks.

Last-day revision: E-business: value chain

E-business covers all internal and external processes done electronically; e-commerce is only buying and selling.
E-marketing uses digital channels to promote, reach and retain customers.
Porter's primary activities: inbound logistics, operations, outbound logistics, marketing and sales, service.
Porter's support activities: firm infrastructure, human resource management, technology development, procurement.
Technology can cut cost, add differentiation or both, so state which one applies to the case.
A value network shows links with suppliers, partners and customers, not just internal activities.
Electronic supply chain management shares data to reduce stock, delay and error.
Link every model to evidence in the scenario.
Benefits to name: wider reach, lower cost, speed, better customer data.
Risks to name: cyber attack, data protection breaches, system failure, channel conflict.
Implementation issues: cost, staff skills, integration with legacy systems and resistance to change.
Finish answers with a clear recommendation and the reason for it.

E-business: value chain practice questions

E-business: value chain in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

E-business: value chain: frequently asked questions

What is the difference between e-business and e-commerce?

E-commerce is buying and selling goods or services electronically. E-business is wider and covers all processes supported by technology, including internal ones such as procurement, HR and supply chain links.

How do I use Porter's value chain in an SBL answer?

Identify which activities in the scenario technology affects. For each, explain whether it lowers cost, adds differentiation or both, using facts from the case. Then link the effect to competitive advantage and give a recommendation.

Do I need to learn many e-business models for SBL?

Learn a few well rather than many badly. You should be able to apply the value chain, value network and a small set of digital business and strategy models to a new scenario and justify your choice.

How does this chapter connect to risk and governance?

Digital systems create risks such as cyber attack, data breaches and system failure. In a case study you may need to link e-business plans to risk management, controls and board oversight.