Abstract
The 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. Caught up in the general fervor, many have assumed that the Internet changes everything, rendering all the old rules about companies and competition obsolete. According to Porter (2001), that may be a natural reaction, but it is a dangerous one. It has led many companies, dot-coms and incumbent alike, to make bad decisions — decisions that have eroded the attractiveness of their industries and undermined their own competitive advantage. The time has come to make a clearer view of the Internet. Internet technology provides better opportunities for companies to establish distinctive strategic positioning than did previous generations of information technology. The Internet’s greatest impact has been to enable the reconfiguration of existing industries that had been constrained by high costs for communicating, gathering information, or accomplishing transactions. For example, the Internet tends to dampen the bargaining power of channels to providing companies with new, more direct avenues to customers (Porter, 2001).