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Strategy and the Internet Summary

In: Business and Management

Submitted By chloyyyy
Words 572
Pages 3
In this paper tells that counter the notion that the Internet renders strategy obsolete, arguing that for a business to be successful managers must view the Internet as a complement to their current ways of competing.
As the newness of the Internet begins to fade, a company returns to normal business practices to sustain a competitive advantage. To be a success, Porter states that true economic value is the determining factor. He defines economic value as “the gap between price and cost, and it is reliably measured only by sustained profitability”(65). So how can the Internet be used to create economic value? Porter identifies two fundamental factors that determine profitability: industry structure and sustainable competitive advantage.
I agree with what Poster said as many people have this miss conception that new strategies have to be developed when moving to Internet, but this is not the case you just take your business online and suffer the same competition. Also nowadays many companies are emphasising on indirect revenue generation which I think is not a good practice because eventually the customers become immune to these advertisements and hardly pay any attention. They might click it but not actually buy anything. Since indirect revenue generation is not as efficient as customer loyalty (customer actually buying products from you) so it adversely affects a company.
Growing business online and providing variety of products can increase a company's efficiency but due to a lot of competitors huge amount of information and low barriers to entries for competitors the bargaining power lies mostly in the hands of buyers. Also companies make partnerships trying to make an economic progress but this adversely effects since different companies join hands and as a result various clusters arise but the clusters tend to move towards monotony hence competition heats…...

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