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Prospective on corporate strategy - Essay Example

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Summary
Michael Porter (2001) has composed the article “Strategy and the Internet” in which he throws light over the importance of internet for organizations that have been facing numerous challenges in contemporary business environment…
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He argues that if these principles are not followed in entirety then a firm would be unable to maintain or enhance its strategic position. The first principle is to develop the ‘right goals’, which means the targets and objectives that are realistic and achievable in real world. For instance, the goals should be defined in a way they could create economic value for customers. This is happened when certain want-satisfying products are developed and marketed that in turn lead to consumer satisfaction / loyalty and relationship building in the long run (Porter, 1996).

Profits are viewed by Porter (2001) as a secondary element of strategy because if a firm’s primary aim is profit then it would probably devise wrong policies. The second principle is ‘value proposition’ that refers to promises made by a supplier to its buyers. Indeed, the stronger the value proposition the greater the probability of enhanced strategic positioning. The third principle is ‘distinctive value chain’, which means that firms should differentiate their business functions compared to their rivals to support its distinctive value proposition (Hamel & Prahalad, 1990).

The fourth principle is to ‘trade off’ certain characteristics during strategy formulation to ensure differentiation. . Indeed, an organization with weak positioning could not survive, expand and sustain in a challenging, complex and unpredictable 21st century business environment. Task 2 It is worth mentioning that this is a globalized world (an outcome of technological advancements) where competition is intense among business firms due to relatively fewer barriers in entering in corporate arena.

Nevertheless, the organizations also enjoy multiple benefits due to these technological innovations because they automate their business process and ensure their virtual presence to enhance their strategic position (inclusive of productivity and efficiency, cost reduction, market reach / share and sales volume). Apparently, it seems as if internet is a very useful tool for any firm (traditional operations) or e-business to attract a large pool of potential customers through web (dot com) presence.

However, the first major criticism is that a significantly large number of dot com ventures fail and internet is not extremely beneficial for sales purposes because today it has been used by all entities (Stead et al, 2007). Indeed, every credible small and large business has created a website to facilitate and entice potential consumers towards their products (for example General Motors will not have a genuine advantage on Toyota and Chrysler because every global corporation enjoys online presence).

For instance, another criticism is that the online customers are disadvantaged because they could not physically test and validate the products they order online (on web); therefore, they tend to make purchases online mostly from companies that have earned credibility and authenticity in open market and

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