E-Business Strategy and Firm Performance

Abstract

Electronic business (e-business) has been popularly lauded as “new economy.” As a result, firms are prompted to invest heavily in e-business related activities such as supplier/procurement and online exchanges. Whether the investments have actually paid off for the firms remain largely unknown. Using the data on the top 100 e-business leaders compiled by InternetWeek, this chapter compares the leaders with their comparable counterparts in terms of profitability and cost in both short-run and long-run. The authors find that while the leaders have superior performance based on most of the profitability measurements, such superiority is not observed when cost measurements are used. Based on the findings, this chapter offers managerial implications accordingly.