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E-business development for competitive advantages: a case study

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Electronic business (e-business) today plays a major role in the world’s economy. Forester Research estimated that, by 2003, the value of e-commerce of US and Europe will reach US$ 3 trillion. As the e-marketplace becomes more lucrative, it attracts new entrants and created turmoil in the market. There have been many spectacular successes and many failures. This paper presents a study of e-business competitive advantage strategies using the success at Intel. After the initial deployment of its e-business pilot system in July 1998, Intel ramped US$ 1 billion sales on e-business each month for the rest of the year. Intel became the fifth most profitable company in the US in the year 2000, up from the rank of eighth in 1999. Despite the rapid decline in stock values of many Internet related companies and the recession, Intel is still successful. By the end of 2001, Intel was the seventh largest market capitalization company in the US.
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by jo - nikko liawan on September 20th, 2010 at 03:09 am
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Information & Management 40 (2003) 581–590
E-business development for competitive advantages:
a case study
Dien D. Phan*
Department of Business Computer Information Systems, St. Cloud State University, St. Cloud, MN 56301, USA
Received 5 July 2001; received in revised form 4 March 2002; accepted 20 July 2002
Abstract
Electronic business (e-business) today plays a major role in the world’s economy. Forester Research estimated that, by 2003,
the value of e-commerce of US and Europe will reach US$ 3 trillion. As the e-marketplace becomes more lucrative, it attracts
new entrants and created turmoil in the market. There have been many spectacular successes and many failures.
This paper presents a study of e-business competitive advantage strategies using the success at Intel. After the initial
deployment of its e-business pilot system in July 1998, Intel ramped US$ 1 billion sales on e-business each month for the rest of
the year. Intel became the fifth most profitable company in the US in the year 2000, up from the rank of eighth in 1999. Despite
the rapid decline in stock values of many Internet related companies and the recession, Intel is still successful. By the end of
2001, Intel was the seventh largest market capitalization company in the US.
# 2002 Elsevier Science B.V. All rights reserved.
Keywords: E-business; E-commerce; B2B; Supply chain; Value chain; Competitive advantage; Strategy; Extranet
1. Introduction
Gates, frequently expressed his fear that Microsoft is
about 2 years away from failure, that somewhere out
E-business has received much attention from entre-
there is a formidable competitor, unborn and
preneurs, executives, investors, and industry observers
unknown, who will use better business models to
recently. As information technologies (IT) develop,
put companies like Microsoft into obsolescence.
novel ways of business process redesign (BPR)
And the most successful new business models are
emerged, creating turmoil in the industry. Organiza-
probably those that can integrate Internet technology
tions today frequently integrate Internet technology to
to all activities of the enterprise-wide value chain.
redesign processes in ways that strengthen their com-
petitive advantages. Success breeds imitation and
invites more entries.
2. E-business concepts, strategies, and
The rapid expansion of e-commerce values in the
frameworks
past few years convinced many people that a new
economy has emerged. Chairman of Microsoft, Bill
Based on various types of trading partners, there are
many categories of e-business, for example: Business
*
to Business (B2B), Business to Consumer (B2C),
Tel.: þ1-320-255-2174; fax: þ1-320-203-6074.
E-mail address: phan@stcloudstate.edu (D.D. Phan).
Consumer to Business (C2B), Consumer to Consumer
0378-7206/02/$ – see front matter # 2002 Elsevier Science B.V. All rights reserved.
PII: S 0 3 7 8 - 7 2 0 6 ( 0 2 ) 0 0 0 8 9 - 7

582
D.D. Phan / Information & Management 40 (2003) 581–590
(C2C), People to People (P2P), Government to Citizen
close frequently, creating rapid changes in the market.
(G2C), Citizen to Government (C2G), Exchange to
The prevalence of technical innovations may be reg-
Exchange (E2E) and Intra-business (Organization
ular, sporadic, or seldom; these patterns of change
Unit to Organization Unit). Without the use of face
have different implications for business organizations.
to face operations, all e-business transactions are
When innovations occur often, a niche may open up
performed electronically by using computer and com-
and the organization competes to take the advantage of
munication networks. The three principal categories
cost savings and market penetration that often results
of e-business applications are:
in better profits and market share.
From the IS perspective, the value chain model [9]
1. Electronic markets or e-marketplaces: buying and
highlights interdependence activities in businesses
selling goods and services.
where competitive strategies can be best applied
2. Inter-organizational systems: facilitating inter-
and where IS are most likely to have strategic impact
and intra-organization flow of goods, services,
(Fig. 1).
information, communication, and collaboration.
As information technologies developed, novel ways
3. Customer service: providing customer service,
of business process redesign emerged. Most organiza-
help, handling complaints, tracking orders, etc.
tions today use Internet technology to redesign their
[13].
processes in ways that provide new competitive
advantage. Through the infrastructure of existing
2.1. Information systems strategies for competitive
B2B exchanges in the e-marketplaces, many organi-
advantage
zations will eventually be able to integrate activities of
their value chain encompassing suppliers, customers,
Studying the evolution of business organizations
and distribution channels within an industry or across
has received much of attention in organization theory
industries. The potential of e-business is so great that
and MIS research [2,8]. Because organizations are not
many believe that e-business is the new economy that
internally self-sufficient, they require resources from
decides the success of future business organizations.
the environment, and thus become interdependent
Andy Grove, Chairman of Intel boldly stated in 1998:
with those elements of the environment with which
‘‘Within 5 years, all companies will be Internet com-
they transact. Organizational and ecological theorists
panies or they would not be companies’’ [4]. Despite
[6,7] argued that organizations develop internal and
the fact this prediction was greatly exaggerated, this
external strategies which seek to minimize the uncer-
statement showed a strong belief in the potential of
tainty arising from dependence on the environment for
e-business.
resources.
However, Porter [10] has argued that the key ques-
As the technology advances and the e-business
tion is not whether to deploy e-business now to take
market develops and grows, market niches open and
advantage of Internet technology, but how to deploy it.
Fig. 1. The value chain model.

D.D. Phan / Information & Management 40 (2003) 581–590
583
Gaining competitive advantage requires building on
access, e-loyalty, and e-trust. Because the use of e-
the proven principles of effective strategy. Business
commerce technology tends to reduce the switching
enterprise can gain competitive advantage by opera-
cost, it is important for e-business companies to build
tional effectiveness, doing the same as your compe-
its strategic position by focusing on e-loyalty which
titors do but doing it better, and by strategic
encompasses good relationships and trust with value
positioning, doing things differently from competitors
chain partners. B2B procurement of direct goods
in a way that delivers a unique type of value to
requires a relationship, usually long-term, with a
customers. Key principles of strategic positioning
vendor who will deliver a known quality of goods.
are: goals that aim at long-term return on investment,
With mission critical buying, companies cannot just
distinctive value chains, trade-offs for uniqueness in
buy from anyone in the e-marketplace. If an order for
the market, strategies that fit together, and continuity
supplies goes unfilled, the missing goods could shut
of corporate direction.
down a production line or an entire factory. In B2B
Porter also argued that Internet technology should
procurement of direct goods, tight integration with
be used as a ‘‘complement to’’ rather than a ‘‘cannibal
major suppliers along the supply chain is absolutely
of’’ traditional ways of competing. The companies
essential.
that will be most successful will be those that use e-
Major success factors for e-business include
business to make traditional business processes better
[5,11,15]:
and those that invent and implement new combina-
 Internet technology fully integrated into the com-
tions of virtual and physical activities. Without under-
pany’s overall strategy.
standing how to deploy Internet technology, entering
 Competitive advantage maintained in both opera-
e-business can bring disastrous consequences.
tional efficiency and distinctive strategic position-
In recent years, the business community and the
ing.
public have been confused by distorted market signals
 Basis of competition not shifted from traditional
of many dotcoms, such as the exponential growth in
competitive advantage, such as cost, profit, quality,
number of customers, artificially-low operation costs,
service, and features.
and inflated revenues. Some companies even resorted
 Company’s strategic positioning well maintained.
to dubious accounting methods to inflate revenues and
 Support from top management.
deflate costs. Somehow these distorted signals have
 Buyer behavior and customer personalization.
misled many people into a belief that the e-market-
 Quick time to market.
places have rendered old rules of competition obso-
 Right systems infrastructure.
lete. As a consequence, many companies decided to
 Good cost control.
shift their fundamental ways of doing business from
 Good e-business education and training to employ-
quality, feature, innovations, service, and profits
ees, management and customers.
toward mainly low price and revenue growth. Without
 Customer’s and partners’ expectations well-mana-
long-term profits, they failed.
ged.
To succeed, companies will need to search and
 Good products and services offered by e-business.
implement innovative strategies that capitalize on both
 Current e-business systems expanded to cover
the power of the Internet and the changes in both
entire supply chain.
traditional and electronic markets. Companies that run
 New competitors and market shares tracked.
e-business should have tight supply chain relation-
 Website of high quality that meets or exceed user
ships with customers, suppliers, and distributors [12].
expectations.
In addition, the supply chain within e-business com-
 Company’s virtual marketplace established.
panies also continues to change. Businesses need to be
sure that customers and suppliers can easily gain
access to their websites to gain important product
3. Intel and its e-business development strategies
information for decision making.
Currently, the major barrier to customers’ and
Intel Corp. located in Santa Clara, California, is the
suppliers’ access to the web is ease and speed of
world’s largest producer of Integrated Circuits Chips

584
D.D. Phan / Information & Management 40 (2003) 581–590
today. Incorporated in 1968, Intel supplies the com-
Access to the site was restricted to Intel’s authorized
puting and communications industries with chips,
business partners and customers.
boards and systems building blocks that are integral
Project teams that participated in the early devel-
to computers, servers, and networking and commu-
opment of the e-business system included:
nications products. Its products are offered at various
 A project planning team that consisted of customer,
levels of integration, and are used by industry mem-
technical and logistical representatives was created
bers to create advanced computing and communica-
to define the scope and objective of the project.
tions systems. Today, the company has evolved from a
 Business analysts were brought in during the early
processor maker into a supplier of network and server
stages to help define the business workflow and to
hardware, Internet hosting services, and other e-busi-
assess how information was given to customers.
ness components. Its technological leadership ranges
 Intel’s sales and marketing staff were told to study
from microprocessor design to advanced manufactur-
and define how to work with customers via the e-
ing and packaging.
business system.
Most of Intel’s business is in the PC market. In past
 Intel’s Planning and Logistics Group was included
years, it was under intense competition from other
on the planning team to help the IT department to
chip makers, such as Advanced Micro Devices
develop the solutions to integrate the new e-busi-
(AMD), Texas Instruments, Motorola, and IBM. It
ness with existing business activities.
then customized its paper catalogs and sent them to
 The IT department was positioned as an ‘‘enabler’’
potential customers along with product availability
of business. Its role was to implement the solutions
information. Until summer 1998, this process was
from the Planning and Logistic Groups.
performed entirely on paper. However in 1996, when
key value chain partners, such as Dell Computers and
Cisco Systems, started their B2B e-procurement sys-
3.2. Intel’s mission and goals
tems, they pressured Intel to convert B2B activities on-
line.
With over 50% of its revenues and many customers
In 1997, Intel began to investigate the feasibility of
coming from outside the US, the benefits of a global e-
building an e-business system. The project started
business system for Intel were too great to be ignored.
with the forming of a Virtual Worldwide E-Business
To support over US$ 25 billion annual sales in 1998
Project Team. Because the project strongly empha-
and a worldwide network of business partners, resel-
sized customer market needs, Intel’s sales and market-
lers, and original equipment manufacturers (OEM),
ing was given overall management responsibility. At
Intel had to improve its efficiency by automating its
that time, converting all operations to e-business for a
business to business processes. Traditional business
company with a large global operation was perceived
processes at Intel at that time were too slow and thus a
as a daunting task. Under the mandate from the chair-
decision was made to deploy a web-based order
man to make Intel an ‘Internet company,’ Sandra
management system.
Morris, Vice President of Sales and Marketing Group,
Intel’s early mission was to use Internet technology
and Director of Internet Marketing and E-Commerce
to improve the competitive advantage of its value
at Intel stated: ‘‘a lot of people feel overwhelmed by
chain activities. The goals were to design and deploy
‘The Task’.’’
a worldwide e-business solution for its current busi-
ness, and build an infrastructure that worked with
3.1. Project structure
existing business processes. The intent was to inte-
grate Internet technology into the company’s overall
From pressure exerted by many value chain partners
strategy in order to gain competitive advantage in both
who wanted Intel to play a leadership role, Intel’s
operational effectiveness and strategic positioning.
management decided to advise customers that Intel
In order to avoid potential software engineering
was serious about e-business. It created an ‘e-business
problems created by the enormous task of building
program’ (a self-service extranet) which focused on
a new Intel’s e-business system, Intel development
procurement and customer support for Intel products.
teams started cautiously. Rather than cannibalizing the

D.D. Phan / Information & Management 40 (2003) 581–590
585
entire business structure, Intel project teams used an
Because management, procurement, sales and
iteration approach in building it first e-business sys-
marketing, and engineering functions of value
tem. They first focused on building an extranet B2B
chain partners and customers all have different
system to support direct customers on-line. ‘‘We
informational needs, Intel customized its websites
picked one thing that we could build very quickly
within customer accounts. Being able to deliver
and deploy to our customers,’’ said Sandra Morris.
personalized information on-line allowed Intel to
support multiple levels of the customer organiza-
3.3. E-business strategies for value chain
tion in a manner that best met the individual’s
needs. This makes it easier for every customer to
Intel aimed to achieve its competitive advantage by
do his/her own research and to take appropriate
both operational efficiency and strategic positioning.
action.
Customers visiting the Intel extranet website
1. Operational efficiency: In order to improve effi-
now find their name and specific applications
ciency, Intel helped its value chain partners connect
available to them, based on their personal profile.
to the worldwide-web to access information on-
This user profile allows a customer to obtain con-
line. To do this Intel automated its order manage-
fidential information important to him or her alone.
ment and information delivery system. The greatest
efficiency improvement in 1997 was to customers
3.4. E-business deployment
who were not already electronically connected to
Intel. By converting the ‘‘unwired’’ to ‘‘wired,’’
The initial e-business pilot system launched in 1998
Intel replaced traditional phone and fax lines to
consisted of 240 one-stop shopping sites for customers
PC-based on-line communication. By providing
around the world. Using an iterative development
access to real-time information, Intel allowed
approach to build the system, Intel’s e-business web-
customers to know more about of Intel products
site was serving more than 350 top customer accounts
and future direction. On-line access also made
and thousands of individual users within the first year.
customers feel more connected with access to more
Personalized data and applications were tailored to
Intel resources, and thus having a closer business
users’ needs to provide an individualized experience
relationship.
Fig. 2.
For Intel, having customers electronically con-
nected brought multiple benefits. First, the com-
3.5. Quick deployment of access manager
pany was able to move resources towards a more
application
efficient and productive technology. Second, sales
people no longer needed to hand deliver con-
One of the early incremental development efforts at
fidential product information as they had in the
Intel after the launch of their e-business website was
past. Third, potential sales were enormous,
an Access manager application that automated the
because Intel was dealing with billions of dollars
creation of account user IDs and passwords to access
of orders per quarter.
the unified environment known as the ‘‘Landing
2. Distinctive strategic positioning in the value chain:
Zone.’’ In the past, Intel account supervisor often
In 1998, Intel was well positioned with its Pentium
spent over an hour in creating user IDs and passwords
processor product lines and enjoyed a distinctive
for a new customer. With the Landing Zone environ-
strategic positioning in the market thanks to its
ment, Intel customers may log into one place and have
unique R&D programs and good supply chain
access to many other intra/extranet sites; this conve-
relationships with partners. To further strengthen
nience attracted many users. ‘‘The people want to
this position, Intel focused on building on-line
come to the environment because it offers these
relationships with direct customers, including
common services of security and entitlement . . .’’
OEMs and distributors. Intel worked hard to
commented M. Kantipudi, the B2B Platform and e-
convert its system and data from the old vendor-
Content Application Manager of Intel’s Sales and
centric model to the new customer-centric model.
Marketing Application Group.

586
D.D. Phan / Information & Management 40 (2003) 581–590
Fig. 2. Intel’s developer site.
3.6. E-business infrastructure
Application development: Intel provided a number
of applications that serve specific needs and has made
In order to simplify system maintenance and sup-
an effort to use off-the-shelf applications [14].
port activities, Intel decided to standardize the e-
business architecture to one hardware vendor, one
3.7. Deployment problems and challenges
operating system, and minimized the number of data-
base and application vendors. In addition to lower
For transaction security, Intel sites allow customers
cost, the infrastructure was designed to be flexible and
to place and track orders using standard web browsers
scaleable as the system grew.
with Secure Socket Layer (SSL) encryption. However,
Servers: Intel’s initial e-business system infrastruc-
the US government previously banned the export of
ture was built around three main clusters of Pentium
128-bit encryption technology to foreign nations. To
based servers: web-servers, database servers, and data
maintain a strong encryption technology worldwide
analysis servers. Standardizing on one hardware ven-
without violating this export ban, Intel encouraged its
dor simplified maintenance costs, made growth easier,
customers to acquire a third-party 128-bit encryption
and allowed Intel to interchange components as neces-
application developed outside the US for their own
sary without compatibility issues.
protection. Commenting about Intel’s success in the
OS and databases: Intel’s e-business system was
deployment of the 128-bit SSL encryption, Phuc
standardized on Microsoft’s Windows NT. For their
Than, General Manager of Intel Vietnam, stated:
databases, Intel limited its operation to two vendors.
‘‘Intel’s customers in southeast Asia found the use

D.D. Phan / Information & Management 40 (2003) 581–590
587
of the 128-bit encryption technology a necessary step
applications in the value chain model at Intel are
to trust Intel’s e-business system, especially in nations
presented in Fig. 3. Major successes are:
where e-business is relatively new.’’
 Intel moved US$ 1 billion dollars in revenue to its
With the 128-bit encryption model resolved, the
on-line e-business system in the first 15 days,
project moved forward to deploy the pilot system.
surpassing the company’s initial goal of doing this
During the first month of deployment, Intel found that
in the first 3 months.
encrypted file transfer was very sensitive to packet loss
 The company was able to eliminate most faxes to its
when using SSL security. When packet loss rate
customers worldwide. For value chain partners in
exceeded 15%, the download times for encrypted
Taiwan alone, this eliminated 45,000 faxes per
pages skyrocketed. It was critical for Intel to reduce
quarter. This produced significant cost savings for
the packet loss rate to successfully deliver its e-busi-
Intel and its value chain partners in reduced inter-
ness system. In addition, most of the transmission
national long distance phone costs.
problems at customers’ sites were located in the
 After the first month of deployment, Intel continued
connection between customer’s workstations to end-
to receive US$ 1 billion value of orders on-line each
offices and tandem offices of the telephone companies.
month for the rest of 1998.
One solution was to reduce the number of elements
 Independent customer surveys rated Intel’s e-busi-
that had to be transferred through the network. This
ness at a 94% satisfaction level.
was done by using data compression and redesigning
 Intel became the eighth most profitable company in
the web pages so that only compressed data had to be
the US in 1999 and climbed to the fifth in 2000.
transferred. Another solution was to improve connec-
 Amid the collapse of many dotcoms and click-and-
tion quality and increase bandwidth between custo-
mortars in recent years and the 2001 recession, Intel
mers’ sites and the tandem office. With some
remains profitable and retained the value of its
incentives, Intel urged all of its value chain partners
equity. For the year 2001, Intel’s income was
to upgrade their connections to ISP servers with high
US$ 1.29 billion. At US$ 211 billion, Intel was
bandwidth pipes and high speed network and routers.
the seventh largest US company in market capita-
Despite the strong encryption technology that was
lization values at the end of 2001 [1,16].
used worldwide within Intel’s value chain of partner-
 Many of Intel’s employees who participated in the
ship, Intel’s choice of Pentium servers and Windows
development of the e-business system continue to
operating systems created some security concerns.
receive promotions many years after its successful
System security is only as good as the weakest link
deployment. Sandra Morris was promoted to the
in the security chain. At Intel’s e-business system, the
CIO position.
weak links include Microsoft Windows Operating Sys-
tems and Windows NT networks. Problems caused by
3.9. Lessons learned and success factors
hackers on Windows-based web-servers are common-
place. Fortunately, Intel conducts B2B e-commerce
Despite thorough planning by Intel’s worldwide
mainly among trusted partners via Virtual Private Net-
team, the most significant payoff from deploying
works (VPN) and thus its security risks are reduced.
the e-business solution was what the company learned.
Key success factors ranked by level of importance are:
3.8. Success
 Building and continuing to strengthen their distinc-
On 1 July 1998, Intel officially began taking orders
tive strategic position in the market: Intel had the
from OEM and distribution customers using its new
right goals, unique product lines, and was able to
personalized websites. This system enabled approxi-
deliver a value proposition that is equal or better
mately 200 of Intel’s customers in almost 30 countries
than that of its competitors. Thanks to its distinctive
to place orders for Intel products, check product
strategic positioning, buyers continue to pay a pre-
availability and inventory status, receive marketing
mium price for Pentium products. By building its
and sales information, and obtain customer support in
B2B system as early as 1998, Intel further strength-
real-time, 24 h a day, 7 days a week. Prominent
ened its strategic position with value chain partners.

588
D.D. Phan / Information & Management 40 (2003) 581–590
Fig. 3. E-business applications of Intel’s value chain.
 Building e-business to complement rather than
tionships with value chain partners, Intel strength-
cannibalize traditional ways of competing: Intel’s
ened its strategic market position.
e-business system was intended to strengthen its
 Support from top management: Thanks to the early
market, profits, and competitive advantage. Intel
vision and support from Andy Grove, all Intel e-
was able to fend off lower cost substitute products
business teams received necessary resources and
with its Celeron products while maintaining good
cooperation to develop and test the new system.
profit margins on its Pentium lines. By continuing
 Focusing on quality of connections: For a global
to maintain innovation and tight supply chain rela-
company like Intel, connectivity can be a real

D.D. Phan / Information & Management 40 (2003) 581–590
589
challenge, especially in parts of Europe and Asia.
must be paid to the reliability of Intel’s PC servers.
After its deployment, Intel tested connectivity with
Rapid improvements in technology and competitive
customers in a real production environment on a
environment have forced many software vendors to
frequent basis. Because performance can vary sig-
shorten development cycle and rush software products
nificantly in different countries, Intel network engi-
to market without having thorough integration testing.
neers worked hard to help customers keep up their
The decline of Windows system reliability was
network connections. While it was not Intel’s
observed by Larry Constantine:
responsibility to install high quality connections
When we look back over the evolution of soft-
between value chain partner’s sites to local tandem
ware, we see fewer clearly defined landmarks,
offices and ISPs, helping some partners to upgrade
and what dominates the landscape is the relent-
their connection bandwidth was crucial to Intel’s
less trend toward ever larger, more complex, and
deployment success during the first year.
less reliable systems loaded down with a panoply
 Providing worldwide support and customer train-
of bewildering features of questionable utility . . .
ing: In order to promote e-business cooperation to
. . . Ironically, even as hardware has become
value-chain partners, Intel built an e-business case
increasingly reliable and dependable, software
study website to educate its partners. Intel also
has become far less so. It has been years since I
developed on-line training to reduce the number
have had to deal with a disk crash, yet hardly a
of support calls. Intel engineers also provided basic
day passes without the operating system and
training to its customers in many parts of the world.
application software conspiring to crash one or
 Deploying the best security protections: Despite the
more of the machines in my office. A 6-year-old
export ban of the US government, Intel required
machine that serves as our firewall sits with its
128-bit encryption technology to be used world-
disk spinning away 24/7 for years with nary a
wide from the start, ahead of many US companies.
glitch, yet Windows goes brain-dead if it is not
Along with firewalls, VPN, access restrictions, and
rebooted at least once a week [3].
security audits, Intel provided adequate security,
privacy, and confidentiality to customers and value
Second, PC workstations and PC-based networks
chain partners in using its e-business system.
are more vulnerable to security break-in or virus attack
 Building and maintaining solid e-business archi-
due to its relatively simple architecture. Reliability
tecture: A robust system will allow e-business to
and security are important factors in building trust
move ahead quickly. By separating front-end func-
from Intel’s B2B partners. A failure of delivery on
tionality of the website from back office systems,
mission critical products could shut down a factory of
applications were developed for customers with
Intel’s customers and cause them to look for substitute
frequent updates without being affected by enter-
products. An error in the database could cause incor-
prise-type applications.
rect parts to be shipped at the wrong time at an
 Following good e-business project management
incorrect price. Therefore, using PCs as servers to
strategies: Having clearly defined scopes, goals,
support mission critical B2B operations is risky.
and requirements, and following an iteration
Because it is in Intel’s interests to promote the use
approach during the development of Intel’s e-busi-
of PCs it must take extra measures to maintain the
ness system helped them to avoid many traditional
reliability and security of its e-business servers.
software engineering problems, such as schedule
delays, cost overruns, and failure to meet user
requirements. Intel strategies of ‘‘build a little, test
4. Conclusions
a little’’ and ‘‘walk first, run later’’ worked.
With rapid advances in technology, novel ways of
3.10. Room for improvement
business process redesign, which include entering the
e-business marketplace have emerged. Organizations
Despite the successes, there is still room for
today frequently redesign their processes in ways that
improvement of Intel’s e-business. First, attention
provide competitive advantage.

590
D.D. Phan / Information & Management 40 (2003) 581–590
However, gaining competitive advantage requires
[4] Intel Corp., http://www.intel.com/eBusiness/estrategies/en-
building on the proven principles of effective strategy.
abling/, January 2000.
[5] W. Mougayar, Opening Digital Markets, McGraw-Hill, New
Key success factors include maintaining distinctive
York, 1998.
strategic positioning, using e-business technology to
[6] J. Pfeffer, G.R. Salancik, The External Control of Organiza-
improve efficiency and competitive advantage, main-
tions: A Resource Dependence Perspective, Harper & Row,
taining support from top management, putting empha-
New York, 1978, pp. 92–184.
sis on the quality of e-business operations, and
[7] J. Pfeffer, Organization and Organization Theory, Pitman,
Boston, 1982.
maintaining good system security.
[8] D.D. Phan, D. Vogel, J.F. Nunamaker, Empirical studies in
Although one can argue that the spectacular suc-
software development projects: field survey and OS/400
cesses of many e-businesses may be due to the
study, Information and Management 28, 1995, pp. 271–280.
advance of e-commerce today, we have seen that those
[9] M. Porter, Competitive Advantage, Free Press, New York,
who abandoned fundamental ways of competing even-
1985.
[10] M. Porter, Strategy and the Internet, Harvard Business
tually fail. Good e-business strategies have contribu-
Review, March 2001, pp. 63–78.
ted to Intel’s long lasting and solid financial success.
[11] W.D. Raisch, The e-Marketplace: Strategies for Success in
By using e-business to enhance its distinctive posi-
B2B, McGraw-Hill, New York, 2001.
tioning, operational efficiency, and competitiveness,
[12] M. Scarborough, J. Spatarella, Getting behind the business of
Intel has continued to strengthen its strategic position
electronic commerce, Journal of Cash Management 18 (4),
1998, pp. 42–46.
in the global market.
[13] J.A. Senn, Capitalization on Electronic Commerce, Informa-
The strategies and success factors discussed here
tion Systems Management, Summer 1996.
can help managers to develop and integrate e-business
[14] P.T. Than, in: Proceedings of the IT@Edu2000 Conference
technology into their overall business.
on Intel Corporation: The E-Business Payoff, Ho Chi Minh
City, Vietnam, 6–7 January 2000, p. 202.
[15] E. Turban, J. Lee, M. Warkentin, H. Chung, Electronic
Commerce 2002: A Managerial Perspective, Upper Saddle
Acknowledgements
River, Prentice-Hall, Englewood Cliffs, NJ, 2002.
[16] The Wall Street Journal, The 100 biggest companies in this
The author would like to thank Mr. Phuc T. Than,
year’s scoreboard, The Wall Street Journal, 25 February 2002,
General Manager, and his staff at Intel Vietnam, in
p. B8.
collaboration
with
the
Information
Technology
Dien D. Phan is a professor at the
Department, College of Natural Science, Ho Chi Minh
Business Computer Information Systems,
City National University, Vietnam for the help to
St. Cloud State University and Nicole
conduct this study.
Maria Stata visiting professor in MIS at
the School of Business, University of
Vermont. He received the BS degree from
St. Cloud State University, the MBA from
References
the University of Minnesota, and the PhD
degree from the University of Arizona.
[1] BusinessWeek, Corporate Scoreboard, BusinessWeek, 26
Before joining the faculty of the Minne-
February 2001, p. 60.
sota State University System, he worked
[2] G.R. Carroll, Organizational Ecology, Annual Review of
at IBM Rochester, MN, as a software architect in the IBM’s
Sociology, August 1984.
Distributed Data Management Architecture Group. His interests
[3] L. Constantine, Back to the Future, Communications of the
include software engineering, project management, group collabora-
ACM, March 2001, pp. 126–129.
tion, and electronic commerce.

Document Outline

  • E-business development for competitive advantages: a case study
    • Introduction
    • E-business concepts, strategies, and frameworks
      • Information systems strategies for competitive advantage
    • Intel and its e-business development strategies
      • Project structure
      • Intel's mission and goals
      • E-business strategies for value chain
      • E-business deployment
      • Quick deployment of access manager application
      • E-business infrastructure
      • Deployment problems and challenges
      • Success
      • Lessons learned and success factors
      • Room for improvement
    • Conclusions
    • Acknowledgements
    • References

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