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Recommended Readings: Business Strategy

 

Strategy and the Internet 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.