Most managers rightly see profitable growth as essential to their business. However, given the realities of competition and the irreducible uncertainty in business, there will always be a gulf between the pursuit of profitable growth and its achievement. When the Internet arrived, many believed the gulf would narrow. Unfortunately, the opposite has been true.
To be sure, the Internet is powerful. It is opening the way to new markets, customers, products and modes of conducting business. But it also is prompting newcomers and veterans alike unwittingly to embrace some dangerous half-truths and to neglect serious tensions beneath seemingly sensible strategy choices. The consequences are visible in the long list of failed dot-coms. At established companies, the effects might be muted, but if the past is any indicator, they too are susceptible to the penalties of inadequate strategy scrutiny.
In assessing Internet-related business opportunities, companies must not let what is technologically feasible overshadow what is strategically desirable. To minimize any unintentional destruction of value, they must think through the full implications of the strategy choices they are making. In particular, they must be alert to seven widely held misconceptions.
The “First-Mover Advantage” Misconception
A land-grab mentality has pervaded the Internet, not just in startups such as Bluefly, ChateauOnline and QXL.com, but also in established companies such as Microsoft, Telefonica and Reuters. The logic is that one driver of success... To read the complete article, login or sign-up using the form below.
Become a premium subscriber today to read this and all MIT Sloan Managmeent Review articles.
Buy this article. Purchase one or more copies of this article in PDF form.
Become a premium subscriber today to read this article and the entire archive of MIT SMR articles.
Upgrade your existing subscription to premium
Sign in if you are a premium subscriber.
Do you subscribe the MIT Sloan Management Review in print? Enter the email address and password you used when ordering. Don't remember? Lookup your subscription account information
- Register for free access to recent articles and the current issue of MIT Sloan Management Review.
- Subscribe and read articles from the past three years online.
- Premium subscription give you access to the entire archive of articles.
