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Michael E. Porter
Main Takeaways
Overview
o Companies must distinguish themselves through strategy.
o The Internet, according to Porter, reduces the ability of companies to attain a sustainable
competitive advantage, due to its leveling effects.
o New technologies trigger experimentation that is often economically unsustainable.
o New, distorted success measures, such as unique users, number of site visitors, or
click-through rates, have historically allowed dot.com to hide their true financial
performance.
o Economic value is nothing more than the gap between price and cost, and it is reliably
measured only by sustained profitability.
o Industry structure is shaped in large part by the choices made by competitors.
The most successful dotcoms will focus on creating benefits that customers will pay for,
rather than pursuing advertising and click-through revenues from third parties.
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Michael E. Porter
With support from IT staff and outside consultants, companies should use the technology
strategically to enhance service, increase efficiency, and leverage existing strengths.
Ultimately, strategies that integrate the Internet and traditional competitive advantages and
ways of competing should win in many industries.
Internets greatest impact: Enable reconfiguration of existing industries that had been
constrained by high costs for communicating, gathering information, or accomplishing
transactions.
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Michael E. Porter
Technology Development
Collaborative product design across locations & among multiple value-system participant
Knowledge directories accessible from all parts of the organization
Real-time access by R&D to on-line sales and service information
Procurement
Inbound Logistics
Operations
Outbound Logistics
Real-time integrated
scheduling, shipping,
warehouse management,
demand management and
planning, and advanced
planning and scheduling
across the company and its
suppliers.
Dissemination throughout
the company of real-time
inbound and in-progress
inventory data
Integrated
information
exchange,
scheduling, and
decision making in
in-house plants,
contract assemblers,
and components
suppliers.
Real-time availableto-promise and
capable-to-promise
information available
to the sales force and
channels
Real-time transaction of
orders whether initiated by
an end consumer, a sales
person, or a channel partner.
Automated customer-specific
agreements and contract
terms
Customer and channel access
to product development and
delivery status.
Collaborative integration
with customer forecasting
systems.
Integrated channel
management including
information exchange,
warranty claims, and
contract management.
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Michael E. Porter
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Michael E. Porter