The path leading toward profitable growth online is, apparently, thick with mosses of false impressions – others would call them “dangerous half-truths.” With a “Yes, but…” approach, let us count the ways that might prove to be our own undoings (according to management and strategy experts):
The “First-Mover Advantage”
In Internet business, first-mover status is a shaky ground on which to rests strategy. There is called ‘the limits of preemption’ where later entrants can persuade buyers to switch by offering better products and services. If the market is insufficiently ordered, the first entrant may be too early. When “launchers” try either to expressly manipulate the standard or monopolize, potential users likely will resist getting trapped.
The “Reach”
As some ventures indeed prospered, companies are under the impression that the more they can deploy their products or services to pursue new markets and extend reach, the more they can grow their business. The other side of the coin is: the more reach a company attempts, the greater the risk it runs of undermining this thing called “fit” or the coherence with which a company’s activities integrate and reinforce one another. Reinforcing “fit” ensures the company’s health and future success.
The “Customer Solutions”
“Let us provide customer solutions…and complements, and extended warranties…” Why not? This is a surefire growth strategy. Well, almost. Often, the extras that we dole out to customers are not unavailable in sufficient quantities or too costly. Compelled, the company would be unable to sell its core offering to a significant set of customers. Pragmatics cues us on this one: The customer enjoys the convenience; the company annoys its treasury. A tension between providing a solution and maintaining focus will likely arise.
The “Internet Sector”
So that’s all there is to it about “B2B.” Have you been conducting potentially dangerous experiments along the dimension of customer solutions? What’s your core sector? Lack of knowledge about the complexities of the so-called ‘Internet sector’ can result to poor decisions in allocating resources, evaluating alternatives, and formulating and assessing strategy. Know that management essentials: customer value drivers or competitive landscape also apply on things happening online. It’s a reckless move on the part of the company to formulate and evaluate Internet-related strategy when it slacked in identifying the specific Internet sector or sectors in which it is operating.
The “Best-of-Breed-Partner Leverage”
The partnership is seeing a profitable market opportunity. Palm Pilot partnering with Nokia looks happy. That is, as long as things go well and control is not that critical. But what happens, just for the heck of it, when both sides start to clamor for discretion over strategy? Know that one of the main reasons alliances seldom succeed for long is the moment tension on discretion over strategy and its ilk arises.
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