Porters Strategy and the internet - Essay Example

Economic value is important because it influences consumer decision to buy a product even above its production cost. Secondly, potential profitability is higher if a company sets itself apart from other businesses as much as possible from the benefits it offers, to the conduct of its business and to the necessary trade-offs it decides to make. A company’s ability to set itself apart from the rest in the market is also reflected in the way it makes and adopts business choices and practices that are integrated into and interdependent with the rest of the system making itself virtually difficult to duplicate.

All of the above, however, is only feasible if the company adopts and maintains a continuity of direction repudiating if need be, emerging business practices that tend to veer it away from its established reputation and practices. 2.0Criticisms of the Strategic Positioning View There are several perspectives that conflict with the strategic positioning view of Porter. Barney (1991), for example, although essentially echoing Porter’s six-point formula for strategic positioning especially with respect to good value, uniqueness and inimitability, leans towards resource-based perspective rather than the market-based perspective of Porter (1996) (1991 p 106).

On the other hand, Prahalad (1990) subscribes to the idea that a company that can easily adapt itself to the changing market boundaries by an ability to invent or enter new markets or swing customer choices has the more competitive edge.. A company’s ability to set itself apart from the rest in the market is also reflected in the way it makes and adopts business choices and practices that are integrated into and interdependent with the rest of the system making itself virtually difficult to duplicate.

All of the above, however, are only feasible if the company adopts and maintains a continuity of direction repudiating, if need be, emerging business practices that tend to veer it away from its established reputation and practices (Porter 2001 63-78; Porter 1996 61-78). 2.0 Criticisms of the Strategic Positioning View There are several perspectives that conflict with the strategic positioning view of Porter. Barney (1991), for example, although essentially echoing Porter’s six-point formula for strategic positioning especially with respect to good value, uniqueness and inimitability, leans towards resource-based perspective rather than the market-based perspective of Porter (1996) (1991 p 106).

On the other hand, Prahalad (1990) subscribes to the idea that a company that can easily adapt itself to the changing market boundaries by an ability to invent or enter new markets or swing customer choices has more competitive edge. This dynamism essentially conflicts with Porter’s advocacy for strategic continuity to preserve firm identity and reputation. For Prahalad, core competencies or a firm’s collective learning is the heart of a company’s competitive advantage as opposed to Porter’s strategic positioning.

Pitt (2001) likewise believes that changes that are now taking place are too fast and the best thing that companies can do is not to rely only on tangible assets but more on intangible assets such as