Summarized from chapter 6 of the book “Strategies for E-business: Creating Value through Electronic and Mobile Commerce by Tawfik Jelassi and Albrecht Enders.
Options to create value in e-business market spaces primarily revolves around cost leadership and differentiation strategies.
If a company chose to pursue both cost leadership and differentiation, it is commonly called ’stuck in the middle’. This condition is risky because the company did not focus on neither and risks not possessing any competitive advantage compared to more strategic rivals.
However, there are also factors that can allow the company to offer both cost leadership and differentiation:
- Development of new technologies, wastefulness of companies
- Scale economies
- Learning effects.
Companies can open up new market spaces to redefine their value proposition. This can be done by looking across substitutes, strategic groups, chain of buyers, complementary products and services, functional and emotional appeal to buyers, time and unrelated industries.
