How Organizations Can Leverage The Internet To Gain Sustainable Competitive Advantage?
Baltzan and Phillips (2010, p. 16) state competitive advantage as ‘a product or service that an organization’s customers value more highly than similar offerings from its competitors’. To be competitive in the market, organizations have to continually focus on innovation. In the PricewaterhouseCoopers’s report (2012), it is mentioned that innovation is a top growth driver of companies’ business today, and the emerging innovations, such as social media, is one of the primarily purposes of highly innovative companies’ IT investment (p. 2). Companies use these new technologies, such as social media, mobile devices, and cloud, to create value of their business (PricewaterhouseCoopers LLP, 2012, p. 5), and the Internet is key to help them achieve their business goals.
Peter Drucker said that creating customers is the only valid definition of business purpose (Kiechel III, 2012, p. 70). The Internet gives new ways for companies discovering more potential customers. Companies can advertise products online, which is an efficient way to attract customers even from other countries. The Internet also allows companies to sell their products to customers living in different countries. Amazon, for example, has business in thirteen countries, such as United States, China, Australia, etc., located in different continents in the world. It was unbelievable in pre-Internet era. The Internet not only enlarges the customer pool, but also helps an organization better interact with customers. Nowadays, organizations can leverage those comments and reviews contributed by their customers to improve their existing products or develop new products for fitting customers’ desires (PricewaterhouseCoopers LLP, 2012, p. 5). By enabling customers to easily share shopping experience with sellers, the Internet gives organizations a unique advantage to better understand their customers’ needs.
The Internet also benefits a company’s internal communication by making it more efficient and effective. In the age of globalization, communication and collaboration could be expensive, because organizations recruit employees worldwide to take advantage of cultural diversity and expending their business and influences. The Internet makes communication and collaboration between employees working in different locations easier, and it saves time and money for employees traveling to other office locations. Skype, for example, is a tool that usually used by organizations to hold virtual meetings. On the other hand, as mentioned by Google’s Executive Chairman and former CEO Eric Schmidt, having different views can certainly help an organization establish better ways of doing things (Xu & Quaddus , 2013). The Internet also can help organizations collect creative ideas generated by employees. As mentioned in the MIT Sloan Management Review and Deloitte report (2014), it is a challenge for company leaders to bring employees’ ideas to fore. However, the Internet facilitates idea sharing between employees, and even the interaction between senior managers and employees.
Not only with customers and employees, the Internet also provides opportunities for organizations better collaborating with partners. The Department of Defense is an example that solved complex questions by utilizing the power of the Internet: within 48 hours, this department gained detailed information from agencies that had done similar project before (Kane, Palmer, Phillips, Kiron, Buckley, 2014, p. 14). Another example is Facebook, which uses data collected both online and offline to help its partners create powerful marketing insights (Kane, Palmer, Phillips, Kiron, Buckley, 2014, p. 12). Moreover, Internet has significantly reduced the cost of communication and collaboration between people (PricewaterhouseCoopers LLP, 2012, p. 5), and let organizations have more time to focus on innovations, which can help an organization become more competitive.
In short, all descriptions above can help organizations interact with customers, innovate new products, grow new business, and finally stay ahead of competitions. This is the age of the Internet. As Clayton Christensen said, “If you only do what worked in the past, you will wake up one day and find that you’ve been passed by” (Kiechel III, 2012, p. 75), organizations should learn the effect ways of using the Internet to prevent themselves from being eliminated from the market.
Reference:
KANE, G. C., PALMER, D., PHILLIPS , A. N., KIRON , D., & BUCKLEY , N. (2014). Moving Beyond Marketing — Generating Social Business Value Across the Enterprise . MIT Sloan Management Review .
Kiechel III, W. (2012). The Management Century. Harvard Business Review. PricewaterhouseCoopers LLP. (2012). How To Drive Innovation and Business Growth — Leveraging Emerging Technology for Sustainable Growth. PricewaterhouseCoopers LLP.
Xu , J., & Quaddus , M. (2013). Managing Information Systems: Ten Essential Topics . Atlantis Press.
Baltzan, p. & Phillips, A. 2010, Business Driven Technology, 4th edn, McGraw-Hill Irwin, Boston, USA.
