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Strategies for e-Business pp 49–95Cite as

External Analysis: The Impact of the Internet on the Macro-environment and on the Industry Structure of e-Business Companies

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Part of the book series: Classroom Companion: Business ((CCB))

Abstract

This chapter firstly provides a framework for analyzing the macro-environment. Secondly, it discusses Porter’s five forces framework for analyzing the attractiveness of an industry. It also analyses the impact of the Internet on each force of Porter’s framework, i.e., industry rivalry, barriers to entry, threat of substitute products, and the bargaining power of buyers and suppliers. Thirdly, this chapter presents the co-opetition framework, which offers an alternative perspective for industry analysis. Finally, it addresses the question of how to define industries within which to compete and how to segment specific customer groups that a business should target through its e-business offering.

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Notes

  1. 1.

    For a detailed explanation of these terms, refer to Forbes Technology Council, “Top tech trends in 2019: 11 experts detail what you need to watch,” Forbes, 20 December 2018.

  2. 2.

    A good discussion of macro-environmental influences can be found in Johnson et al. (2005). A more e-commerce- specific discussion of environmental factors is contained in Chaffey (2002), pp. 143–156.

  3. 3.

    “Facebook to stop routing ad revenue via Ireland amid pressure over taxes,” The Guardian, 12 December 2017

  4. 4.

    “Windows of opportunity,” The Economist, 15 November 2003, p. 61

  5. 5.

    Cookies are text files stored on a PC that allow the website operator to identify that PC.

  6. 6.

    Spam is unsolicited e-mail messages

  7. 7.

    Orendorff (2017). See also: Grant (2018)

  8. 8.

    VoIP telephony stands for “Voice over Internet Protocol”. For acquisition details see Microsoft News Center (2011) and Arrington (2005).

  9. 9.

    For an illustrative example, see, in the second edition of this book, the case study “Second life. Mercedes-Benz enters the metaverse,” pp. 525–547.

  10. 10.

    Anderson (2017). See also Waldhuter (2017)

  11. 11.

    TCP specifies how information should be separated into individual packets and reassembled at the destination. IP specifies how individual packets should be sent over the network. HTTP is a method of jumping back between different files. HTML is a computer language for formatting hypertext files. J. Cassidy provides an informative account of the most important Internet standards and technologies in his book entitled Dot.con, Perennial, 2003, pp. 16–24.

  12. 12.

    For a detailed discussion of industry analysis, see Porter (1998), pp. 3–34.

  13. 13.

    The five forces industry framework is described in Porter (1998), p. 5.

  14. 14.

    R. D’Aveni suggests that levels of competition have risen in the past decade, leading to a phenomenon that he calls “hypercompetition” (see D’Aveni 1995). However, G. McNamara, P. Vaaler and C. Devers have empirically tested this thesis and have not found conclusive evidence for an intensification of competition (see “Same as it ever was: the search for evidence of increasing hypercompetition,” Strategic Management Journal, 2003, Vol. 24, No. 3, pp. 261–278).

  15. 15.

    “Software’s great survivor,” The Economist, 22 November 2003, p. 70

  16. 16.

    The source of the data involved in this paragraph is Statistica, 2018. Available at 7 https://www.statista.com

  17. 17.

    The concept of ‘co-opetition’ was developed by A. Brandenburger and B. Nalebuff, Co-opetition, Currency Doubleday, 1998. It entails simultaneously cooperating and competing with other companies.

  18. 18.

    For a deeper analysis of these coalitions’ effects in the e-commerce context, see the chapter by J. Prieger and D. Heil, published in F.J. Martínez-López (Ed.), op. cit.

  19. 19.

    N. Argyres and A. McGahan published an interview they conducted with Michael Porter in the Academy of Management Executive, 2002, Issue 2, pp. 43–53.

  20. 20.

    such as Rita Gunther McGrath of Columbia Business School

  21. 21.

    For an extensive discussion of market segmentation, see Kotler (2005), pp. 251–296.

  22. 22.

    See also Hutzschenreuter (2000), pp. 28–29.

  23. 23.

    The Women in Technology website is 7 https://www.wit.org.au/.

  24. 24.

    This segmentation becomes apparent on the opening page of 7 www.dell.com, where visitors can choose between different segments.

  25. 25.

    Based upon the Pareto Principle. See also Marshall (2013).

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Further Reading

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  • For readers interested in app business, see Roma, P., & Ragaglia, D. (2016). Revenue models, in-app purchase, and the app performance: Evidence from Apple’s App Store and Google Play. Electronic Commerce Research and Applications, 17, 173–190.

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Authors and Affiliations

  1. IMD, Lausanne, Switzerland

    Tawfik Jelassi

  2. Department of Business Administration 1, University of Granada, Granada, Spain

    Francisco J. Martínez-López

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  1. Tawfik Jelassi
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  2. Francisco J. Martínez-López
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Correspondence to Tawfik Jelassi .

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Jelassi, T., Martínez-López, F.J. (2020). External Analysis: The Impact of the Internet on the Macro-environment and on the Industry Structure of e-Business Companies. In: Strategies for e-Business. Classroom Companion: Business. Springer, Cham. https://doi.org/10.1007/978-3-030-48950-2_3

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