Beyond a shadow of a doubt, the fast pace of technological changes and the global economy have resulted in hypercompetition as the nature of today’s competitive landscape. In the recent years, regarding the popularity of E-businesses, multifarious online businesses have been found because of the comparatively low barriers to entry and a tremendous number of entrepreneurs have found the nerve to conduct their entire businesses online. According to the Internet World Stats website, approximately 1/3 of the world’s population is using the Internet and the number of users is rising steeply. Many companies struggle to survive in highly competitive market by making use of the Internet as the intensification of competition and the undergoing process of globalization have led to high utilization of the Internet as a supplementary business tool.
As Prof. Michael E. Porter, who is well-known for his strategic system, mentioned in an article, titled “Strategy and the Internet” (in 2001), the Internet should be viewed as a complement to conventional method of competing. In spite of the fact that utilization of the Internet should be considered as a blessing in disguise, it can turn out to be an unmitigated disaster. Since there is a relative lack of reliable market signal and because of the distorted market behavior, the online market should be interpreted carefully to set strategic goals.
The Internet as the Most Powerful Business Weapon
After the Industrial Revolution Period (the 18th, 19th centuries), there has been a marked shift from “mass production” to “mass customization” for the past decades and the Internet eased the process of customization.
In terms of marketing, the process of online data collection (quantitative and qualitative data) is less complex and measuring customer satisfaction can be easily done by conducting online opinion polls and surveys. In other words, the Internet provides marketers with a comparatively easier way to identify customer needs and enhance customer satisfaction. With regard to the online analytic tools, identifying the needs, wants, demands (core concepts of marketing), and targeting the markets are relatively easier on the Internet. In addition, Advertising on the Internet is rather cheaper in comparison with offline advertising.
The emergence of social networking services (SNS) as a sophisticated business tool on the Net and the evolution of Internet marketing, coupled with social media marketing, never cease to amaze researchers. Thanks to the Internet, employees and customers (users) can be in touch instantly anytime, with anyone, anywhere. The Internet can be explained as worldwide network that enables computers to share different information with each other as well as sharing databases, transaction resources, and communications. By utilization of the Internet in organizations the red tape is cut and stratified bureaucracy is reduced to make everyone accessible within organization.
On the one hand, the Internet lowers entry barriers, which is highly desirable to set up a business, as there is no need for huge capital investment and sales forces. On the other hand, the Internet paves the other companies’ ways to penetrate into the market which leads to increasing the threats of substitutes. As a result, by maximizing and minimizing the switching costs of buyers and suppliers, the Internet changes the bargaining powers of buyers and suppliers. There are some characteristic of E-commerce, which is a subset of E-business, such as ubiquity, global reach, richness, personalization, and customization that make it clearly distinguishable from traditional commerce. Moreover, the Internet, which influences strategic positioning (E.Porter, 2001), can be used to achieve competitive advantages.
There are several advantages such as connectivity, convenience, standardization, lower costs, highly customizable services, and speed that are brought by the Internet to the Organizations. By making comparisons, it can be readily understood that how the Internet has impact on industry structure and it is crystal clear that the advantages outweigh the drawbacks. That is why an overwhelming majority of organizations are going online and there are so many that conduct their entire businesses on the Internet.
To conclude, in the light of popularity of digital goods and digital market, it is reasonable to assume that the Internet can be regarded as the most powerful business weapon in today’s business world.