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Essay / Research Paper Abstract
This 9 page paper considers whether or traditional strategies such as differentiation are obsolete when trading on the internet. The value of a strategy on the world wide web is discussed with revenue to a number of successful and unsuccessful companies. The paper shows how and why strategy is even more important in this medium than with traditional bricks and mortar businesses. The bibliography cites 11 sources.
Page Count:
9 pages (~225 words per page)
File: TS14_TEintratg.rtf
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Unformatted sample text from the term paper:
revenue and profits. With this perception many companies have acted quickly to get a foothold in the market, but this has often been at the cost of planning and strategy.
For this reason and the lack of many e-commerce strategy models many commentators appear to indicate that the same level of strategy is not needed, however, Porter is of the
opposite opinion. Porter argues "the Internet, then, is often not disruptive to existing industries or established companies. It rarely nullifies the most important sources of competitive advantage in an industry,
in many cases it actually makes those sources even more important" (Porter, 2000). Therefore, companies trading in this medium need to make use of the same strategies which can also
support that traditional view of competitive advantages. Porter (1985), argues there are two forms of competitive advantages; cost and differentiation. Cost advantage
is available only to a single company in each sector. They are able to produce goods at a lower cost than other companies, but still sell them at n average
price, giving them a superior profit. As good here are competing against others, goods with a cost advantage also require differentiation. Differentiation is a way of adding value greater than
the cost of adding that value, making it different from the competition and stand out. Differentiation can been seen in most of
todays successful companies. Where it cannot be seen it is probably present in a less obvious manner. Examples of competitive advantages though differentiation in the UK this may include companies
such as the Virgin Group of companies that were late entrants into many industries, from airlines to financial services. Their success has been due to a high level of differentiation.
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