1. Group 2 Nisa Nguyen Huy Tran April 8, 2014 STRATEGY AND THE INTERNET

2. DISTORTED MARKET SIGNALS Sales figures have been unreliable Revenue is an elusive concept – cost is equally fuzzy Stock market’s signals have been more unreliable Unreliability of the financial metrics

3. THE INTERNET AND INDUSTRY STRUCTURE

4. THE FUTURE OF INTERNET COMPETITION The intensity of competition The power of customers will tend to rise A similar shift will affect advertising based strategies

5. THE INTERNET AND COMPETITIVE ADVANTAGE Under the pressure of average profitability in many industries  individual companies set themselves apart from the pack to be more profitable than average performer  Achieving a sustainable competitive advantage Operating at a lower cost Commanding a premium price

6. Operational Effectiveness Doing the same things competitors do but doing them better  Better technologies  Better trained people  More effective management structure THE INTERNET AND COMPETITIVE ADVANTAGE

7. Strategic Positioning Doing things differently from competitors in a way that delivers a unique type of value to customers  Different set of features  Different array of services  Different logistical arrangements THE INTERNET AND COMPETITIVE ADVANTAGE

8. Strategic Positioning Operational Advantages Strategic Positioning Competitive Advantages “Without a distinctive strategic direction, speed and flexibility lead nowhere.”

9. The Six Principles of Strategic Positioning Start with right goal 1 Strategy in sustained profitability will lead to economic value. When customers are willing to pay for a product at a price which exceeds the cost. Not in term of volume or market share leadership Distinctive Value Proposition 2 Company’ value proposition must be different from those that competitors offer. “Unique value in a particular set of uses or for a particular set of customers” Distinctive Value Chain 3 Performing different activities than rivals Performing similar activities in different ways