Strategy and Internet

The article “Strategy and the Internet” by Michael Porter discusses internet influences on the industry structure. Furthermore, the article provides overview of the internet and industry structure, the future of internet competition, internal and competitive advantage. Special attention is paid to six principles of strategic positioning and distorted market signals. Actually, the article seems to be significant as it thoroughly examines the importance of strategy and provides outcomes if the strategy is absent.

Michael Porter notes that nowadays internet is “an extremely important new technology, and it is no surprise that it has received so much attention from entrepreneurs, executives, investors, and business observers”. Therefore, to persuade companies to turn to internet technologies he sums up main benefits offered by strategy development based on using internet opportunities. Porter argues that internet improves on-line investor relations meaning that it ensures constant access to information dissemination and broadcast conference calls. Further, internet technologies make human resource management simpler and faster, because different types of software may be installed to provide better connections between employees and executives. Apparently, internet may stimulate web-based training and self-service personnel. Additionally, internet is used to provide other linkage of inventory, forecasting and purchase systems with customers and suppliers.

Porter emphasizes that most companies do use internet technologies, though only the minor part is aware how to deploy it. Certainly, internet technologies offer ways how to establish distinctive strategic positioning. Porter assumes that a company doesn’t require radically new approach to running business. The company has to build company on the “proven principles of effective strategy”, because internet “per se will rarely be a competitive advantage”. Thus the article aims at finding new ways how to create a new effective strategy combining both potential of internet technologies and proper decision-making process.

References

Porter, Michael. Strategy and the Internet. Retrieved December 6, 2006, from http://www.mercy.edu/faculty/Georgas/inbs560/files/pdf/Strategy&theInternet.pdf