By:Rinky Sharma (35)

VIRTUAL VALUE CHAIN

PHYSICAL VS VIRTUAL

Rayport and Sviokla suggest businesses operate in two worlds:• A physical world (marketplace)• A virtual world (marketspace)

The two spaces are “two interacting value-adding processes”

THE LINKAGE BETWEEN THE TWO CHAINS IS

CRITICAL FOR EFFECTIVE SUPPLY

CHAIN MANAGEMENT.

THREE STAGES OF VALUE-ADDING

INFORMATIONAL PROCESSES1. Visibility: improve the ability to track

physical operations more effectively. Example: Frito-Lay’s “info revolution” initiative

2. Mirroring capability: substitute virtual activities for physical ones to evolve a parallel chain in the marketSPACE. Example: Ford’s “virtual design team”

3. Create new customer relationships: use info to deliver value to customers in a new way. Example: Zappo’s notification system

IMPLICATIONS FOR MANAGEMENT

IMPLICATIONS FOR MANAGEMENT

By careful interpretation of the differences and interactions among the value adding events of the physical and virtual worlds, managers can more clearly visualize the strategic issues facing the business.

THANK YOU!