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Including the Internet in Your Business Strategy
A Guide to the Internet article
Many small businesses become part of the Internet instead of making the Internet become part of
them. A strategic approach to the Internet will help your business succeed online.
Internet Business is Growing Rapidly
The Internet has impacted commerce more profoundly in a shorter time span than anything else.
Internet-generated revenue jumped from $22 billion in 1997 to $180 billion in 1999, and is expected
to top $1.2 trillion by 2002.1
Four Ways Businesses Grow
Business growth involves two variables: types of products and types of customers. The following
matrix outlines the four business growth strategies:2
| | Types of Products |
Types
of
Customers | | | Same | | New |
| Same | 1 | 3 |
| New | 2 | 4 |
Many small businesses expect the Internet to help them grow by selling the same products to more
of the same type of customers (Area 1). However, the online customer is rarely the same as the
customer your business has been serving for years.
The Internet throws most businesses into Area 2. Then, as the new customers start asking for new
products, businesses that planned to grow in Area 1 find themselves wondering if they can make it
in Area 4.
Four Ways Businesses Sell
Selling also involves two variables: time and place.3
| | Time |
| Place | | | Same | | Different |
| Same | 1 | 3 |
| Different | 2 | 4 |
The most powerful way to sell is when you and your customer are in the same place at the same
time, such as in your store (Area 1). When you're not in your store to help a customer or you talk
with a customer by phone, your selling power weakens because you lose either the same-place or
same-time advantage (Areas 2 and 3).
Historically, very little business has happened in Area 4, because the relationships between
sellers and customers are too weak. The Internet is a revolutionary tool that helps you succeed in
Area 4: it helps you to build a relationship with a customer without being in the same place or
even talking to each other at the same time.
"Taking the Plunge" vs. Strategic Planning
Many small business owners approach the Internet like it's a large ocean. Not knowing what's on
the other side, but not wanting to be left behind, they take the plunge and go online -- with
unpredictable results. Some groan under the increased workload; others wonder why they aren't
getting more e-mail; still others puzzle at how to re-spond to e-mail asking them to offer new
products.
Internet problems such as these may come from poorly designed Web sites, but more significantly
they stem from a lack of strategic planning.
Your Growth Strategy
Before "going online," solidify your overall business strategy. Decide how you'll grow. Most
importantly, research and make decisions about your products and your customers. If
you don't, the Internet will take you by surprise and may drown you.
Now, Add the Internet
Once you've solidified your overall strategy, you're ready to include the Internet as a
component of your strategy. Depending on your strategic decisions, you may use the Internet
as a tool to accomplish any number of the following purposes:
- Advertise your products and services
- Sell your products and services
- Provide product support
- Connect to your suppliers
- Improve your distribution
- Enhance your communication
Business people who plan their overall strategy first, and then add the Internet as a part
of their strategy, succeed. They approach the Internet as a canal that connects them to their
customers, and they carefully craft the boat that will carry them.
1. ActivMedia
2. Richard Outcalt, Outcalt & Johnson
3. Bruce Moore, Amazon.com
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