Contemporary Strategic

Issues
Internet Era

 Internet is an integrated network of

users connected with computers,
digital
switches,
routers
and
telecommunication equipments.
It involves millions of interconnected
computer networks that include
billions of host computers.
Internet is an information system
that
offers
information
on
business,science,government
and
others.
It provides communication flows

 Internet
technology
transmits
information quickly and at lower cost
than other communication means
such as telephone, fax, postal and
currier service
It helps to store gather,retrive,
format and display information
quickly and efficiently.
The users of information are
students, businesses, academicians,
researchers, scientists etc.

Demand for internet services

There are an estimated 400 million people
worldwide using internet in 2000.
167 million in North America,105 million in
Europe,122 million in Asia Pacific,2 million in
Latin America and about 7 million in rest of
the world.
Internet users have been growing day by day.
People
use
internet
technology
for
communication,
information
gathering,
shopping, entertainment etc.
Majority
of
internet
users
are
students,academicians,researchers,businessm
en,scientists,government and its agency etc.

Suppliers of internet technology and services

The major suppliers of internet technology are as
follows
1. Makers of the specialized internet related
communication components and equipments
.Digital switches,routers,cables etc
.Cisco System
2. The providers of internet communication services
.These are known as ISPs (internet service
providers)
.These include local telephone company, cable
company, wireless communications providers, they
provide dialup, cable and wireless internet.

 British
Telecom,Broadband,Worldcom,Merca
ntile,World
Link,
Nepal
Telecom,Ncell,UTL etc.
Suppliers
of
computer
its
components
and
computer
hardware
There are several companies engage
in manufacturing and assembling of
computers,servers,data storage, and
peripheral devices.
Intel,IBM,Dell, Sony, Apple HP,

Developers of specialized software

Computer software makes peoples day to
day works simple,quick,accurate,effective
and efficiency.
Microsofto,IBM,Oracle,Novell,Macromedia,
Linux,Java etc.
Ecommerce Enterprises
B2B:Cisco,Intel,Oracle
B2C:eBay,Amazon
Media enterprises:Disney,Sony,EA sports
Content Providers:Yahoo,MSN,Google,AOL
etc.

Strategic Challenge of Computing

Technology
During last years the suppliers of
internet technology and equipments
have enjoyed the booming demand.
Lots of opportunities have been
increasing
They have been facing lots of
challenges as well.
They have been facing tough
competition
among
alternative
technologies for building various

 They have to establish a globally connected

internet
infrastructure,
building
telecommunication system, install millions
of servers, develop necessary software, and
provide internet connection to individuals
and business houses at cheaper price to
gain competitive advantage in this industry.
The following are the techniques to manage
technological challenges
1. Investing aggressively in R&D to win
innovation race against rivals
2. Forming strategic alliances with suppliers,
potential customers and complementary
technology builders

3. Differentiating
the
companys
products by investing sufficient
resources to best fit the needs of the
customers
4. Acquiring other companies with
complementary
technological
expertise to broaden and penetrate
the companies technological base.
5. Broadening the area or scope of the
company so that the company can
shift
its
capability
and
core
competencies
to
another

6. Standardizing the products to realize

economies of scale and learning
effects
7. Shifting
production
facility
at
optimum location to realize location
economies

Impact
of
internet
on
competitive
environment
The internet highly influences the competitive
environmental forces
It helps to alter the strength and balance of
competitive
rivalry,
barriers
to
entry,
bargaining power of buyers and suppliers.
Impact on competitive rivalry
Internet has increases the competitive rivalry.
Producers
are
offering
their
products
worldwide from internet.
It is replacing traditional middlemen and cost
It is making price competition rather than
quality

Impact on barriers to entry

Entry barriers into ecommerce are
relatively low.
It does not require large amount to
set up the business.
specialized services and knowhow
can be easily outsourced.
The relatively low entry barriers push
companies in intensive rivalry.
The software required for ecommerce
is readily and widely available

The impact on buyers bargaining

power
Internet
makes
it
easy
and
convenient for buyers to gather
extensive
information
about
competing and substitute products
and brands.
Customers can use internet to
search
products,
its
features,quality,price
and
specification of products.
The buyers bargaining power will be

Impact on suppliers bargaining power

Internet allows companies to identify and then
integrate foreign suppliers into their supply chain.
Local companies also get access to global market
via internet for searching the best suppliers.
Internet reduces the bargaining power of suppliers.
Impact on threats of substitute products
The domestic product can access into foreign
market and foreign product into domestic market.
Customers can get necessary information about
various alternative products via internet.
The choices of customers become wide.
The threats of substitute products rise due to
internet and ecommerce

The End