Strategy and the Internet

From our recent class decision and in reference to Dr. Miller’s input regarding Porters article Strategy and Internet, few things that I liked are worth sharing. It is so true that the Internet influences the industry structure and the sustainable competitive advantage but the million dollar question that always pops-up is whether a company should use the internet or traditional methods to compete in this so call E-world. According to Porter and to some extend I also agree to that, it will be beneficial to any company if they use both (internet and traditional methods) to their individual greatest strategic advantage.

I think relying 100% on the Internet is not a good idea at all, neither following the old traditional way completely is beneficial. There has to be some balance of both. Because now days we have a mix crowd who may like either or both or to some extend neither, so the advantage to a company is to use both at the same time. No doubt the combination of the two is indomitable.

One of the few examples that come to mind is related to real estate. It is a good idea to list your house on sale on the internet, it's fast easy and can be accessible by many via click of a button but I think most of us just don’t rely on that information. If the house on sale looks fancy and neat on the computer still nobody just buys them on-line, at least I won't. People like me will use the traditional method as well and will go to the actual site and talk to the seller(s) or to the party acting as the middle person. Look at the house and get a comfortable feeling before even doing anything further. What happened here, got the information from the internet within few minutes, got contact info from the net as well later contacted seller(s) and made a trip to the site. Here the combination works perfectly well.

Another good example is, searching job opportunities on the Internet, it's perfectly fine, but to get quick attention it's always helpful to have a good network or know people within the company who can forward your resume to the appropriate individuals. Internet for sure shoots your resume to the hiring manager in a fraction of second but the in-person networking is what will add value to that.

I really like the example Porter gave regarding Amazon.com. What Porter says is very interesting, "If Amazon.com offers an equal or lower price than a conventional bookstore and free or subsidized shipping, why not try it as an experiment? Sooner or later, though, some customers can be expected to return to more traditional mode of commerce, especially if subsidies end, making an assessment of customer loyalty based on conditions so far suspect". Many of us first perform their re-search online and later go to actual store look at the product and request for a price match from the internet. In short the internet gives a fast way to get information and traditional method makes gives us peace of mind that we have purchased the right product by actually looking, feeling the product.