A01 chaf6542 06 se fm indd

Market Driving

Strategy:

Customer

education

and motivation

Market-Driven

Strategy:

Keep pace with

market threats/

opportunities

Status Quo:

External Forces/Incentives

Inter

nal Capability/Incentives

Don’t bother

Capability

Building:

Build for transition

to electronic

commerce

Low

High

Low

High

M05_CHAF6542_06_SE_C05.indd   197

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Part 2  Strategy and applications

external forces and capabilities. Figure 5.9 defines a matrix where there are four quadrants 

which businesses within a market may occupy:

● 

Market driving strategy (high internal capabilities/incentives and low external forces/

incentives). This is often the situation for the early adopters.

● 

Capability building (low internal capabilities/incentives and high external forces/ 

incentives). A later adopter.

● 

 Market-  driven  strategy. Internal capabilities/incentives and external forces/incentives are 

both high.

● 

Status quo. There isn’t an imperative to change since both internal capabilities/incentives 

and external forces/incentives are low.

An organisation’s position in the matrix will be governed by benchmarking of external fac-

tors suggested by Perrott (2005), which include the proportion of competitors’ products or 

services delivered electronically, proportion of competitors’ communications to custom-

ers done electronically, and proportion of different customer segments (and suppliers or 

partners on the supply side) attracted to electronic activity. Internal factors to be evaluated 

include technical capabilities to deliver through internal or external IT providers, desire or 

ability to move from legacy systems and the staff capability (knowledge, skills and attitudes 

necessary to conduct electronic business). The cost differential of savings made against 

implementation costs is also included here.

Stage models can also be used to assess internal capabilities and structures. For example, 

Atos Consulting (2008, Table 5.4) have defined a capability maturity framework. This is 

based on the  well-  known capability maturity models devised by Carnegie Mellon Software 

Engineering Institute (now transferred to the CMMI Institute, 

http://cmmiinstitute.com/

) 

to help organisations improve their software development practices. (In Chapter 10 there is 

more detail on how to achieve management of change between these stages.)