A Hybrid Modeling Approach for Strategy Optimization of E-business Values

Value proposition, creation, and maximization are essential corporate objectives in e-business planning and operations, and thus constitute central tasks of the ebusiness strategic management. The goal of this paper is to provide a hybrid modeling approach that integrates the dynamic programming and the balanced scorecard models for strategy optimization of e-business values. Values from the market, supply chain, business organization, and customer perspectives are identified first based on a generic e-business model framework. In the subsequent value-based strategic planning stage, strategies with objectives and metrics for value creation in different perspectives are outlined. In the mean time, a multiperiod, multi-dimensional dynamic programming model is formulated for optimizing the expected total business value. In the value-based performance measurement stage, an adapted balanced scorecard model is developed to hold a balanced view for evaluating strategy performances regarding all value perspectives. The proposed modeling approach aims at providing e-business firms with clear and well-structured guidelines for efficiently and effectively handling complex decision and management activities including business model design, value identification, strategy formulation, as well as performance measurement.