Strategy and the Internet

Strategy and the internet explore both the changes and how organizations can evaluate the internet’s impact on its competitiveness. The analysis of industry structure is an authoritative source of strategic insight for organizations. The profitability of a company dampens as the industry is altered by the internet. The alteration signifies the need for change in a company’s policy. This paper discusses how the internet has weakened industry profitability without giving primary advantages hence making strategy more important.

1a. Porter distinguishes between operational efficiency of a firm and strategic positioning of a firm in an industry. How are these two concepts related? Which does Porter think is most important to establish a competitive advantage?

The internet has enhanced operational effectiveness as it stands today to be the most powerful tool available. It has enabled improvements in the entire value chain in every company and industry. It eases and speeds exchange of real-time information. On the contrary, improved operational effectiveness does not provide an advantage in competition as it offers a difficult proposition to achieving and maintaining higher levels of operational efficiency. Strategic positioning becomes an important aspect of sustained operational advantages. The strategy is a matter of discipline that entails profitability rather than just company’s growth. It involves the ability to have a uniquely tailored value chain that is difficult for competitors to imitate.

1b. Sampson asks the question: “Does IT matter?” Do you think that Porter thinks that the Internet matters? Briefly explain. Sampson discusses SAAS. What do you think Porter would say about SAAS?

Internet technology (IT) is a vital aspect in providing a platform that is technologically beneficial. It is important especially when it comes to reinforcing a distinctive strategy, improving fit and tailoring activities. IT is a policy tool that is very powerful as it has made it easier to customize Internet packaged applications hence offers a unique strategic positioning of a company. Provision of a common platform will enable an integrated and customized system reinforcing the fit among activities. It can only be achievable when companies adopt the IT required for their specific strategies rather than just rushing to generic packaged applications. The Software-as-a-Service (SAAS) is a function that has to be fulfilled by the company as it aligns with activities for development.

1c. Both Oster alder and Pigneur (Business Model Canvas) and Porter focus on a firm’s value proposition. What is the value proposition and why is it important? How does the value proposition relate to the other eight building blocks and to Porter’s six principles?

A firm’s value proposition is the discipline in strategy that focuses on profitability. A company’s strategy must deliver the value propositions. For an established sustainable competitive advantage, a company must configure its policy differently from rivals and tailor its value proposition. All the activities of a company must be mutually reinforced to have a plan that defines the company’s elements to fit together. A distinct value proposition of a company is vital as it will not change even after forgoing some opportunities.

2a. In Chapter 3 of Sampson, Sampson describes Amazon’s first business model? Briefly summarize what that business model was in terms of the nine building blocks.

The business model of Amazon entails all the nine building blocks. Amazon possesses a value proposition of price and convenience for all its products or services. The value proposition for Amazon has allowed it to extend into a new market and obtain deep customer relationships. The customer relationship for Amazon is self-service that provides automated services.

2b. how did Amazon’s business model evolve over time as it grew? What goals drove these changes?

The company’s dominance to online retail with a fair standard traditional model of business allows for continuity in future hence explore new product and service category.

2c. what has been the relationship between Amazon’s revenue streams and Amazon’s operating costs over time?

The key activities are narrowed down to merchandising, production, and design. The stakeholders include publishing giving authors’ access to Amazon store hence making Amazon disrupt publishing industry permanently.

3a.Write a brief (1 to 2 sentence) summary of the main point of each of the six chapters in Starting an Online Business.

Currently, many people are using internet as a daily routine. It has resulted in many potential customers willing to be internet customers. It is an excellent avenue to take advantage and start an online business. Every successful business is dependent on the very first idea the entrepreneur possess. One has to concentrate on the next actions that will make the online business a reality. It is important to evaluate the chances of success in a particular online business. It is also vital to identify and scrutinize future customers hence starting the business on the right track. It is good to understand the purpose of a business plan as it shows all the benefits you can reap. Reviewing and updating the business plan is a critical aspect of success.

Funding new ideas in the business docket is one of the most important choices one may make. The source of money required for startup helps define the rules for business operation. One has to create time for taking care of customers as they are the reason as to why you are in business. Several policies have to be in place so as to manage online business successfully. Organizing the workspace is important in obtaining efficiency in your business. Having the necessary equipment, selecting applications to improve desktop performance, choice of software that increases productivity and access to the internet are vital steps in the success of the online business.

3b. Are you personally interested in starting a business generally? How about an online business more specifically? Briefly explain.

Personally I have an interest in starting an online business as it has ready customers. The business has financial freedom, it is affordable, the schedule is flexible, expansion of an existing business is possible, there is no age barrier, and it is easy to start.

3c. in the first chapter, the authors tell you the advantages of starting an online business. Based on your scanning of the other five chapters, what possible disadvantages/challenges can you see?

There are various disadvantages of starting an online business as you may receive negative opinions while gathering information. There are also threats that are within the online business. Not all online business will prosper as the case of Amazon and eBay.

3d. the authors of Starting an Online Business argue that it is very important to develop a business plan but do not discuss the business model canvas. Do you think that it would be a good idea to develop a business model canvas in addition to a business plan? Briefly explain your answer.

 Business model canvas is an important aspect of guidance for business startup. It is a strategic management template for new development business models. It describes the firm’s value proposition, customer, infrastructure, and finances. It also assists the firm by aligning its activities by identifying potential tradeoffs.

In conclusion, internet dampens the profitability of an industry. Companies need to focus more on strategic positioning rather than efficient operations. Strategic positioning gives a firm an upper hand in competition against its rivals. Internet technology is a vital strategy that makes it easier for customization of internet packages. Any company’s policies must possess value propositions that define profitability.   

References

Azevedo, Américo. Advances in Sustainable and Competitive Manufacturing Systems. Cham: Springer, 2013. Print.

Barlow, John F. Excel Models for Business and Operations Management. Chichester: Wiley, 1999. Print.

Belew, Shannon, and Joel Elad. Starting an Online Business All-In-One for Dummies. Print.

Schwartz, David. ‘Balancing Policy, Strategy, and Technology.’ Internet Research 9.2 (1999): n. pag. Web.