The impact of internet and electronic technologies on firms and its implications for competitive advantage.

Abstract

The proliferation of Internet and electronic technologies (IETs) accompanied by the growth of the Internet is transforming the business and competitive landscape in radical ways. This paper systematically examines the changes in entrepreneurial opportunity space arising from IETs and their implications for competitive advantage. An organizing framework composed of three conceptual categories --communication, brokerage, and integration --is used to analyze the impact on market efficiency and changes in industry/firm value chains. We explicate how these changes create entrepreneurial opportunity through disintermediation, reintermediation, and/or reconfiguration of value chains and advance some propositions. We propose that the notion of a business model is useful for understanding the impact of these changes on the competitive advantage of firms. We identify four key components of the business model --scalability, complementary resources and capabilities, relation-specific assets, and knowledge-sharing routines --and explicate how and why they may be important drivers of competitive advantage in IETs-based business models.