Friday, September 5, 2008

How Internet Support Traditional Ways of Competing?

Many have argued that the Internet renders strategy obsolete. In reality, the opposite is true. Beeause the Internet tends to weaken industry profitability without providing proprietary operational advantages, it is more important than ever for companies to distinguish themselves through strategy. The winners will be those that view the internet as a complement to, not a cannibal of, traditional ways of competing.”

The internet is an extremely important new technology that has received so much attention from entrepreneurs, executives, investors, and business observers. Internet gives the opportunity for the company to create economic value and establish distinctive strategic positioning than before. Its greatest impact is changing the way human communicate.

This kind of technology provides a potentially powerful tool for enhancing operational effectiveness and creates strategic positioning through easing and speeding the exchange of real-time information. But the next question is does internet change how the business operates?

But internet has creates a paradox. Its benefits-making information widely available, reducing the difficulty of purchasing, marketing, and distribution, allowing buyers and sellers to find and transact business with one another more easily-also make it more difficult for companies to capture those benefits as profits.

It is difficult to provide a sustainable competitive advantage through simply improving operational effectiveness, because many rival doing the same. Companies need to create more difficulty for those rivals to imitate, by deploying strategic positioning through internet that is highly integrated value chain.

Deploying the internet methods need critical consideration: The integration with traditional methods. Virtual activities co not simply eliminates the need for physical activities, but often amplifies their importance.

The reasons are: First, introducing internet applications in one activity often places greater demands on physical activities elsewhere in the value chain. Second, it can have systemic consequences, requiring new or enhanced physical activities that are often unanticipated. Third, most internet applications have some short comings I comparison methods.

Frequently. In fact, an internet application and a traditional method benefit each other. Thus, finding a new configuration of internet and traditional approaches is the right strategy for present economy.


Porter, Michael. (2001). “Strategy and the Internet”. Harvard Business Review, March.

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