BUSINESS STRATEGY IN THE WIRED WORLD: COMPETING FOR MARKET LEADERSHIP AND MIND SHARE

Abstract

This paper examines how firms use the Internet and the emerging "global infostructure" to improve key processes and competitive capabilities. It proposes the widespread diffusion of the emerging "infostructure" will dramatically reduce transaction costs, leading to growth in electronic commerce and productivity while reducing the profit opportunities of inefficient firms. In this wired world characterized by low transaction costs and noisy environments, firms will have to re-focus their strategies to achieve market leadership and capture mind share for competitive advantage. To achieve market leadership firms must seek advantage from economies of scale, scope, or externalities. Alternatively they must differentiate themselves through unique merchandise and innovation or develop specialized customer relations. To capture mind share firms must develop integrated cross media marketing programs. These programs will push products through various online or related promotions or develop strong brand identities for products. Thus this paper identifies competitive issues in a wired world and outlines various foci for strategic responses to the above challenges.