ACCA Strategic Professional · Strategic Business Leader · E-business: value chain
Brightpath, a retailer, reviews its digital strategy. It will keep its existing store network and sales model, but use a website and mobile app to speed up order handling, cut costs and improve customer service. The board does not plan to change what it sells or who it sells to. Which description best fits the e-business strategy, and what is the implication?
Brightpath is digitising existing processes, using technology to support the current business rather than change it. This should reduce costs and improve service, but because competitors can easily copy such improvements, it offers limited lasting differentiation, unlike a transformation of the business model or a platform model.
- ADigital transformation of the business model; it implies a radical redefinition of the value proposition and revenue streams
- BDigitisation of existing processes (e-business as efficiency support); it implies gains in cost and service but limited competitive differentiationCorrect
- CPure-play online strategy; it implies closing all physical stores to cut costs
- DPlatform business model; it implies earning commission by connecting third-party buyers and sellers
Explanation
Brightpath uses technology to improve existing processes without changing its offer or market. This is digitisation of existing activities, giving efficiency and service gains. Because rivals can copy such improvements, differentiation is limited. A transformation or platform model would require changes to the proposition or revenue model, which are not planned.
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