e-Strategy Pure and Simple
Chapter Two
The e-nigma: Page Three

The Traditional Business Model Under Siege

Let’s draw another picture. Imagine now that the sea level rose by fifty feet around the globe. Most cities on this planet would be flooded to one degree or another and thelandscape would now become a seascape.

The tallest buildings would no longer be connected by intricate and restrictive road and rail systems, but could now be served by an uncluttered and unrestricted flat, open surface water system. Each building can now be reached from any other building at any time of the day, over water.

A Dramatic Change In The Rules Of Play

In this new environment, the landscape "business practices" are now irrelevant and need to change drastically to accommodate the new seascape environment.

• speed boats can replace slow moving trucks and trains
• toll booths are useless on water
• competitors who could only challenge you over land can now do so in a different manner, or you could be attacked by new, unpredictable pirate ships

• the traditional value chain has been disrupted
• assets may now be liabilities
• brand loyalty is no longer an advantage
• service may no longer be a differentiator
• a captive market has been unshackled and given numerous options
• a customer’s switching costs have been reduced significantly
• information is virtually "free" thus spreading like a virus and making customers much more knowledgeable
• pricing matches minute-to-minute market conditions
• on line demand drives production

And there are many more. The message is that each rule change contributes to making the Internet an e-nigma. This new e-Strategy business model is "conceptually alien" to the executives of a business rooted in the traditional business model of bricks and mortar. The Internet unshackles new competitors from the constraints of the traditional business model and introduces business practices that are also "alien" to these executives.

Traditional relationships between suppliers, producers, distributors and customers are turned upside down and inside out and the new relationships are difficult to comprehend. In other words, the sandbox is getting more and more enigmatic.