Objectives of knowledge management

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
➔ 
Evolving business models in the 
Internet car sales market
The site also contains a range of study 
material designed to help improve your 
results.
Web support
Scan code
to find the
latest updates
for topics in
this chapter
M05_CHAF6542_06_SE_C05.indd 179
7/23/14 11:16 AM

---

180
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: