Virtual value chain and competitive advantages in the context of e-commerce

Abstract

The Internet has change traditional firms' operation management and business model, which makes Porter's traditional value chain need to be improved. In this paper, we consider virtual value chain to be a new tool for analyzing and creating competitive advantages in the context of e-commerce. In this study, the shortages of traditional physical value chain (PVC) based on marketplace were discussed, and then the theory of virtual value chain (VVC) on the marketspace is introduced. We developed a model of firms' virtual value chain in the context of e-commerce, and addressed the information model of the VVC. Then we combined the VVC and Porter's two types of competitive advantages, and found that a firm can achieve both cost-leading and differentiation advantages by exploiting virtual value chain.