The E-world, information and competitive advantage: what works?

Abstract

The Author’s theme of company competitiveness and the role played by information and communications technologies (ICT) in its maximization is continued with a review of corporate uses of Internet and intranet technology. Internet technology is used for accessing all the information on the Web, the invisible Web, electronic mail (email), instant messaging, newsgroups, chat rooms, online message boards, communities of practice, virtual communities, intranets, extranets, portals, vortals, industrynets and auctions. The Internet has had a profound effect on organizations and business activity by overcoming geographic boundaries and making information more easily available and in larger quantities to a wider potential customer base. The importance of acknowledging the inability of the Internet alone to create a competitive advantage is stressed, along with need to seek to create such advantages by using the Internet to do things differently, through innovation or by inventive pricing. The things that Internet technology enables organizations to do which they could not do easily before include: broadcasting information internally and externally; making information much more easily available; messaging; increasing speed of delivery; direct customer contact; selling; buying; ordering; educating; exchanging information and views; monitoring competitors and the marketplace; graphics/pictures; improving customer service and value; analyzing customer needs; reaching new markets; and improving choice.

International and product diversification

“…Effective utilization of the internet and IT capabilities are important sources of competitive advantage for many firms (Teo and Pian, 2003), including financial services firms (Hamilton and Selen, 2004). Indeed, the internet has made substantial quantities of information more easily available to a wider potential customer base (Freeman, 2001). However, e-commerce alone may not improve firm performance, but in the context of an important role for IT.…”

“…International Diversification Product Diversification impacted businesses and their ability to overcome geographic boundaries and appeal to a larger customer base (Freeman, 2001). Moreover, many banks have leveraged internet banking for cross-border expansion (Pyun et al, 2002).…”

“…This is particularly true for the financial services industry that is very information-intensive and invests heavily in information and communication technologies (Gordon, 2004). Of course, utilizing the internet alone may not be enough for a firm (Freeman, 2001), given that nearly all of the 120 largest American banks offer some form of electronic banking (Nathan, 1999;Pyun et al, 2002). Instead strong IT capabilities are also needed for financial services firms to get easier access to new markets (Sriram and Krishnan, 2003).…”

“…Specifically, e-commerce and expansion of product offerings may improve firm performance. Fundamentally, there are various potential benefits for financial services firms that offer e-commerce services, including making information more easily available in larger quantities to a greater number of customers (Freeman, 2001), reducing transaction costs as well as averting the cost of establishing a traditional brick and mortar branch (Nathan, 1999), providing additional customer services online (Levenburg and Klein, 2006), achieving improved customer satisfaction (Gordon, 2004), and enabling firms to bundle their product offerings and expand their portfolio of services beyond their traditional sectorial offerings (Kumar and Hillegersberg, 2004). Indeed, e-commerce is fundamentally transforming the traditional lines that define product, market and customer base for the financial services industry (Pyun et al, 2002).…”

Global Corporate Ventures: A New Trend of International Corporate Entrepreneurship

“…Moreover, born globals and global corporate ventures may well reflect a substantial degree of market homogeneity across borders, requiring little local market adaptation, enabling new ventures to expand globally with limited resources and international experiences (Callaway 2004). The Internet, in particular, offers a global reach, enabling many e-commerce firms to overcome geographic boundaries and engage in cross-border expansion (Freeman 2001;Soo Pyun, Scruggs, and Nam 2002). Further, many such high tech firms often find it advantageous to "lock in" their particular technological standard and establish the dominant design for the industry (Anderson andTushman 1990, Arthur 1996), perhaps even more so on a global scale.…”