Strategy and the
by Michael E. Porter
Many dot-coms have violated nearly every
precept of good strategy. Instead of focusing on profits, they have
chased customers indiscriminately through discounting, channel
incentives, and advertising. Instead of delivering value that earns
an attractive price from customers, they have pursued indirect
revenues such as advertising and click-through fees. Instead of
making trade-offs, they have rushed to offer every conceivable
product or service.
Porter argues that the Internet rarely
nullifies traditional sources of competitive advantage in an
industry; it often makes them even more valuable. And as all
companies embrace Internet technology, the Internet itself will be
neutralized as a source of advantage. Competitive advantages will
continue to result from traditional strengths such a unique
products, proprietary content, and distinctive physical activities.
Internet technology may be able to fortify those advantages, but it
is unlikely to supplant them.