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e-Business: Its Power and Challenges The Case of Automotive Industry in Asia

e-Business: Its Power and Challenges The Case of Automotive Industry in Asia
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Author(s): Amir Albadvi (Tarbiat Modares University, Iran)
Copyright: 2002
Pages: 3
Source title: Issues & Trends of Information Technology Management in Contemporary Organizations
Source Editor(s): Mehdi Khosrow-Pour, D.B.A. (Information Resources Management Association, USA)
DOI: 10.4018/978-1-930708-39-6.ch006
ISBN13: 9781930708396
EISBN13: 9781466641358


E-business is changing the shape of competition, the speed of action and the nature of leadership. It has already revolutionized the traditional way of doing business and has implied the redesign of core processes, e.g. in purchasing and marketing, and introduced important transformation and reaction of external relationships with partners and customers. Based on the new information and communication technologies, e-business can successfully be used to redefine a company’s competitive position and to take advantages of new oppurtunities. This paper focuses on the power and challenges of e-business in enhancing competitive advantage in developing countries’ industries and reports some results of a survey in the Asian auto-industry. The study confirms that as many web-based businesses are learning, the real value of e-business comes not in the form of sales but in removing inefficiencies in traditional business models. E-business enables seamless communication and collaboration between constitutes across vast distances. Along with horizontal integration, e-business facilitates vertical integration along the supply chain. Costs are lowered and market response time is reduced. Companies are able to find customers outside of a company’s regular footprint. Forecasting the demand specifications are enhanced and industry standards are lifted and disparate channels and markets are integrated. The study shows that currently, most auto manufacturers in Asia use e-business only for internal administration and despite all the talk of e-business, the development in Asia is slow, with less than 15% of IT budgets devoted to e-business in the auto-manufacturing companies. The current infrastructure in the industry is largely internally focused, incongruent with the customer-orientation of e-business. According to the study it is concluded that due to the uncertain nature of e-business, few people understand how to integrate e-business into their corporate strategy in Asian developing countries. Expectations are difficult to quantify, and are often too impatient. Seeking immediate benefits, companies adopt e-business in areas outside of core competencies, hoping either to boost revenues or to sell off the successful entity for millions of dollars. E-business is not a silver bullet; it takes time to realise the benefits, just like any new business practice. Companies need a clearly planned vision, starting with basic solutions. From there, the strategy will evolve to solutions in wider marketplaces.

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