A01 chaf6542 06 se fm indd

5.1

  

Debenhams creates value through 

mobile commerce  208

5.2

  

Setting the Internet revenue 

contribution at Sandvik Steel  213

5.3

  

Boo hoo – learning from the largest 

European   dot‑  com  failure  234

Chapter at a glance

Main topics

Case studies

The following additional case study is 

available at  

www.pearsoned.co.uk/chaffey

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Evolving business models in the 

Internet car sales market

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Part 2  Strategy and applications

Developing a digital business strategy requires a fusion of existing approaches to business, 

marketing, supply chain management and information systems strategy development. In 

addition to traditional strategy approaches, commentators have exhorted companies to 

apply innovative techniques to achieve competitive advantage. Around 2000, many articles, 

fuelled by the  dot-  com hype of the time, urged CEOs to ‘innovate or die’. For many existing 

companies rapid transformation was neither desirable nor necessary and they have made a 

more gradual approach to digital business practice. Those companies that have successfully 

managed the transformation to digital business have done so by applying traditional strategy 

approaches. At the same time there have been many  start-  ups featured as cases in previous 

chapters, such as eBay, Lastminute.com and Zopa.com, that have succeeded through innova-

tive business models. But these companies also have succeeded through applying established 

principles of business strategy, planning and risk management.

In this chapter we seek to show how a digital business strategy can be created through follow-

ing these established principles, but also through careful consideration of how to best identify 

and exploit the differences introduced by new electronic channels. In a nutshell, digital business 

isn’t just about defining ‘how to do business online’; it defines ‘how to do business differently 

by applying digital technology to improve profitability and processes for both  customer-  facing, 

 partner-  facing and internal communications. The digital business strategy defines how. We look 

at some examples of business models which need to be developed in the light of the opportuni-

ties enabled by digital technology and media in the introductory interview in this chapter.

We start the chapter by introducing digital business strategy and then discuss appropriate 

strategy process models to follow as a framework for developing digital business strategy. 

The chapter is structured around this classic  four-  stage strategy process model: