Value Chain

2004:097 SHU

MASTER'S THESIS

Value Chain and the Internet in Companies Pursuing a Differentiation Strategy

Case Studies of Finnish Hotels

Li Shi, Jenni Makkula

MSc Programme in Electronic Commerce

Department of Business Administration and Social Sciences Division of Industrial marketing and e-commerce

2004:053 SHU - ISSN: 1404-5508 - ISRN: LTU-SHU-EX--04/053--SE

ABSTRACT

The Internet together with information technology sets new challenges, but also opens opportunities for companies to achieve competitive advantage. Therefore, the research problem of this thesis has been formulated as how can the value chain be described in a company pursuing a differentiation strategy under the influence of the Internet. The research problem is further developed into two research questions concerning how value chain and sources of differentiation can be described under the influence of Internet technology. The purpose of this study has not been to generalize findings to all Finnish hotels, but to gain a deeper understanding of value chain and Internet technology in companies pursuing differentiation strategy. A qualitative research approach is used for this study. Two Finnish hotels have been chosen as our case study companies, and within these case companies, one small congress hotel and one national wide hotel chain have been selected. Personal interviews were conducted with the persons, possessing the best knowledge in developing company’s strategy. The findings of this study clearly indicate that the way the Internet has affected on the case hotels’ value chain is unique and depends on many factors, like the scope, size and scale of business. The hotels have taken advantages of the potential of the Internet technology as an information centre, reservation medium, and operational tool. The information technology is permeating the case hotels’ value chains practically at almost every activity, but still, the Internet technology is not applied by the hotels...