Abstract:  Virtual value chain is theprolongation and development of traditional value chain and the effective toolfor analyzing and constructing enterprises’ competitive advantages in theenvironment of electronic commerce (EC). This article introduces the theory ofvirtual value chain on the marketspace the principle part of which are networkand information technology, on the basis of analyzing the shortages of thetheory of traditional physical value chain based on marketplace, and advancesthe model of enterprises’ virtual value chain in the environment of EC. Then itemphatically analyzes two types of competitive advantages in term of costleading and differentiation could be gained by exploiting virtual value chain.

Keywords:competitive advantage, Physical value chain, Virtual value chain

1 Introduction

With the quick development of informationtechnology, IT has penetrated every value step of value chain, playing a rolein optimizing, controlling and intelligent judging; enables enterprises tocapture more information while engaging in value chain activities, and helps usanalyze more complicated engineering technology and business activities; makesus capture information that isn’t thought to be captured previously, andbecomes the main drive which can change the processes of physical operation;enhances the whole capability of coordinating activities in organization andbetween it and the outer world; enables the coordination between theorganization and the outer world and in the organization to span geographical areain order to create many new relationships and concerted models amongorganizations^[1]. The development of the Internet and World WideWeb, as B2B and B2C services’ communication vehicles, has created a new set ofchallenges for companies that want to realize the globalization of markets,real time delivery and digital products/services across their extended    enterprise of customers, suppliers andpartners^[2]. Therefore, enterprises must look for new patterns ofcoordination between suppliers, trading partners and customers to successfully respond to the e-commerce demands.Traditional value chain developed by Michael E. Porter just treats informationas a supporting element in the value-adding process, not as a source of valueitself. In fact, varieties of information in and out of companies itself hasbecome the source of creating new value for customers in the context of EC.