. Cox (1999), Suggests There Is A Need To Approach Supply Chain Management

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Cox (1999), suggests there is a need to approach supply chain management thinking based around the concepts of power and value appropriation. In a number of organizations, cost-effective supply chain is a matter of survival as purchased goods and services account for up to 80 per cent of sales revenue. The empirical evidence presented in chapter 4, therefore, seeks to add to the body of knowledge by providing evidence of the awareness of the effectiveness of supply chain management enabled by e-commerce in UK industrial SMEs, the business issues they face, the subsequent challenges which must be faced in overcoming the perceived credibility gap and achieving the competences needed to be an effective supplier in the twenty-first century.
Porter's Competitive Analysis in an Industry:
In his Competitive Model Porter (2001) argued that the nature and degree of competition in an industry hinged on five forces: the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products and the jockeying among current contestants. He said the collective strength of these forces determines the ultimate profit potential of an industry. Because the five forces are affected by both the internet as well as the payment model, in this section it would be interesting to consider the effects of internet on the industry structure portrayed by Porter's model.
According to one of analysis presented by Efraim Truban most of impacts of internet on the industry structure is negative, enumerating few of them
Threat of substitute products or services -new substitution threats
Rivalry among existing competitors -migrates competition to price, increase in the geographic market thus no. of competitors, increases pressures on variable cost, reduces differences among competitors.
Bargaining power of Suppliers- danger of suppliers reaching the market directly bypassing intervening companies, reduces differentiation due to standardization, power shifts to suppliers.
Buyers - shifts bargaining power to buyers, reduces switching costs
Barriers to entry - low
A negative impact means that competition will intensify in most industries as the internet is introduced. The competition is not only between online and off-line companies but also among the online newcomers. Thus, according to Simon R Croom to survive and prosper in such an environment, a company needs to use innovative strategies.
Online Electronic payment systems or e-payments can be considered as one of the innovative strategy to overcome the competition in the industry.