Econometric Simulation for E-Business Strategy Evaluation

Effective and efficient e-business strategy development is crucial to achieve a competitive advantage in the electronic marketplace. However, e-business strategy evaluation constitutes complex and dynamic challenges for business management. This paper offers assistance for the evaluation process by applying a computer simulation that uses an econometric model delivered through a decision making support system. The major econometric simulation logic and methodology introduced here covers multidisciplinary areas and is among the first attempts to identify and establish a comprehensive, quantitative tool to support the strategy development processes of e-businesses. The authors hope to shed some lights on e-business strategy research through this paper. INtrODUctION While bringing new opportunities (Ghosh, 1998; Huizingh, 2002; Lumpkin & Dess, 2004; Udo & Marquis, 2001/2002) to organizations, the development of Internet and Web-based technologies also presents challenges (Hoffman, 2000; Laudon & Laudon, 2004; Porter, 2001). To many companies, it is still not clear how to benefit from the Web and other digital technologies (Lumpkin & Dess, 2004). Business strategy plays an increasingly important role in order for companies to achieve a competitive advantage in the Internet age (Porter, 2001; Raisinghani & Schkade, 2001). However, the new and dynamic nature of ebusinesses makes strategy development a tough mission for companies. Comprehensive and effective tools are needed to deal with this problem by supporting the strategy making processes of e-businesses.