Why is Internet so useful???
low cost
open standard ( everybody and every company can have a website)
more possibilities for exchanging products and services, money, information in an online setting.
According to Kotler, the internet does not in itself offer companies competitive advantage , rather online success depends on companies ability to exploit online market opportunities for their market offerings. meaning success depends on other factors, such as its actual integration into organizational routines and the management skills of the firm, co-specialization with other organizational resources and the exploitation of the networks.
According to Kotler is based on cost reduction advantages that internet offers. He mentioned how companies can create competitive advantage by using Internet, for example through:
Reducing transaction costs: reducing information asymmetries and by facilitating coordination of independent processes such as design and engineering. Transaction costs occur when products or services are transferred from one organization to another and may include search costs and enforcement costs.Moreover, the internet allows knowledge sharing within a partnership. By utilizing information and communication technologies for supporting supply chain integration, companies are able to control better flows of material, information and finance. ICT generally, and internet and web technologies in particular, are specially useful for supply chain management.
Reducing customer search costs : To many people nowadays, having time to shop is almost impossible (students like us for example). Search costs (the time, money, mental resources spent searching) are recognized as an important determinant of customers decision making process in the market place. Digital technology enables customers to access more information about products and services while at the same time facilitating a larger choice due to the global reach of internet.
In his articles he mentioned other ways that the internet can help companies to have a competitive advantage, you can read more about the topic in ( Marketing Management. Kotler, Keller, Brady, Goodman and Hansen. (2009). Or his official website www.kotlermarketing.com
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ReplyDeleteUndoubtely the benefits that the use of Internet bring to companies are clear and no dispute may arise challenging this fact. In spite of this, I think that Internet can represent a significant source of competitive advantages just for those companies that are born on the web and that carry on their main activity through the web. Amazon or eBay are among such companies.
ReplyDeleteFor the so called "bricks and mortars", but also for the "bricks and clicks" companies, Internet may represent a way through which expand their activity by a potential increment of their customer base and subsequently of their revenues. For those companies, sources of competitive advantages lie more in an efficient organization of their value chain and supply chain than in an exploitation of the web.
Internet has many benefits for people and businesses. Companies can take an advantage of this tool to grow their business, create competitive marketplace and earn greater revenue by selling additional products and goods online. Another benefit of using the Internet is availability to network with other businesses and get feedback from their customer about their products. Also, people can receive benefits from the Internet too. For instance, eBay and Amazon offer enormous opportunity for average people to start their business just by using the Internet. By using the Internet consumer can compare price which help them to find a cheap product.
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