How do the Internet and E-commerce challenge companies to change the way they operate?
When the trajectory of improvements in products and services that a good company offers overshoots what customers in a tier of the market want, it opens the opportunity for a different approach — typically simpler and cheaper ways of doing business. That’s the kind of new opportunity that the Internet offers. Think about Amazon.com, the online bookseller. The old model in bookselling was to build ever-larger stores with more inventory — but that had reached the end of the game, and still reliablity and convenience were inadequate. Amazon.com has found a new market opportunity based on convenience and reliability, and it’s changing the scale of the economics. Barnes & Noble is aggressively trying to respond. But they started late. Another example is investment banking. The kind of services that Goldman Sachs and Morgan Stanley offer are very important at the high end — for the very best investment banking customers. But for other companies that want to sell stock, there are now other
