"The key question is not whether to deploy Internet technology but how to deploy it." According to Porter companies should build on the proven principles of effective strategy since the Internet per se will rarely be a competitive advantage. "Many of the companies that succeed will be ones that use the Internet as a complement to traditional ways of competing." In order to prove his point Porter discusses a long list of subjects, such as distorted market signals ("New technologies trigger rampant experimentation ... as a result, market behavior is distorted and must be interpreted with caution."), the impact of the Internet on the five competitive forces and industry structure ("Its greatest impact has been to enable reconfiguration of exisiting industries."), and the myth of the first mover. He then switches over to the future of Internet competition ("The next stage of the Internet's revolution will involve a shift in thinking from e-business to business, from e-strategy to strategy."), discussing the impact of the Internet on competitive advantage. Porter also discusses the Internet as a complement to traditional business. He uses sidebar and figures to translate the impact of the Internet into his famous models and frameworks (five forces, strategic positioning, and value chain). "Only by integrating the Internet into overall strategy will this powerful new technology become an equally powerful force for competitive advantage."
Although this article has come too late for many Internet companies, it is essential reading for managers of organizations that are considering or need to improve their online strategy. It provides great insights into how the Internet links into traditional business and strategies. For readers unfamiliar with Porter's previous work I recommend his 1996-article 'What is Strategy?', or his book 'On Competition' which is great value-for-money. The author uses simple US-English.
BUT... you might have some difficulty to apply it if you haven't read the theory (competitive strategy & competitive advantage). There are a lot of examples so it's quite easy to understand, even for a beginner.
In this Harvard Business Review article, Michael Porter describes the impact of the Internet on competition and strategy, through discussing distorted market signals, the impact on industry structure (Porter's five forces), the myth of the first mover, the impact on competitive advantage, and the Internet as a complement. The author concludes that the Internet does not render strategy obsolete, but makes it even more important than ever for companies to distinguish themselves through strategy. "... the fundamentals of competition remain unchanged. The next stage of the Internet's evolution will involve a shift in thinking from e-business to business, from e-strategy to strategy."
For various Internet-companies this article has come too late (March 2001), but it is extremely attractive and useful for all people looking to extend their traditional businesses into cyberspace (Internet, World Wide Web, and e-commerce). Michael E. Porter makes extensive use of his previous research into competition and strategy, and combines these with Internet examples and cases. The author uses simple US-English.