I was proud of this report I wrote while studying Global Marketing during my Masters in DCU so I decided to share it here. Enjoy, you marketing nerds!
Rayport and Sviokla (1995) stated that every business today competes in two worlds: The physical world of resources and the virtual world of information. The processes for creating value are not the same in the two worlds and hence demand different value adding strategies.
The new realm contains new conceptual and tactical challenges to a company when attempting to create a competitive advantage. The notion of competitive advantage was developed by Michael Porter in 1985 under the definition “Competitive advantage occurs when an organization acquires or develops an attribute or combination of attributes that allows it to outperform its competitors”
Porter (1985) stated competitive advantage could be created in a company’s value chain: the a series activities which connect a company’s supply side. Companies such as DHL and Fed Ex add value in their activities with information additives by allowing customers to track their packages online. In this case the information is creating value and not replacing the product.
Rayport and Sviokla (1995) draw attention to the replacement of supply and demand as one of the main changes brought on by the internet. They state that in a world with increasing connectivity and free flowing information it is demand not supply that is scarce. Urban et al (2000) agree that the power is not in the hands of the consumer calling the internet shift “consumer to business” strategy where customers will demand best products at lower price!