AN E-BUSINESS makes strategic use of electronic (digital) technologies (particularly the Internet and the Web) in order to satisfy the customer and gain and sustain competitive advantage.

The Internet and the Web can potentially give your business the following benefits and opportunities:

o global reach
o extended operation (24x7)
o low cost communications
o fast response
o better collaboration across the enterprise
o opportunity to reengineer processes
o opportunity to create a new business

These are significant opportunities, unfortunately your existing competitors and new competitors can make use of the same technological benefits to beat you to the market place.

Put yourself in the place of major bookstore chains like Barnes and Noble and Borders which wake up one day to find Amazon.com show up from nowhere and start grabbing worldwide market share.

Amazon.com moved globally fast. It did not have to build thousands of "brick and mortar" stores. It can offer millions of titles yet it does not have stores, and lots of books in inventory. Its customers are not limited to a small physical neighborhood. Millions of potential customers worldwide can use the Web to look for books, read selected chapters, read commentary from reviewers and readers, place orders and pay for the books ordered--all without leaving the comfort of home or office.

Amazon.com also uses the Internet to send orders to forwarders, publishers and other bookstores. These partners take care of order fulfillment (i.e. delivering the desired books to the customer). Because it did not have to invest in physical facilities and inventory, Amazon.com has low overhead and can offer very attractive prices to book buyers.

When Dell started operations, it was forced to a direct to consumer strategy because of Compaq's dominance of the PC retail channel. Initially Dell started with mail order and phone orders. Because it did not have to send preconfigured PCs to retailers, Dell used a build-to-order manufacturing strategy.

Dell's direct-to-consumer business model has a perfect fit for selling on the Web. It's the same model--it just uses a different communication channel. Dell sells more than $10 million a day on the Web and expects 50 percent of its business to be on the Web in a few years.

Compaq on the other hand has to worry about channel conflict between its resellers and retailers and the Web. It also has many problems managing inventory and manufacturing. Compaq was recently overtaken by Dell for the No. 1 position in the PC market.

These are earth-shaking surprises you would not want to experience. However, if you don't get your act together you will get hit sooner rather than later.

Gary Hamel writes about the e-Corporation. He says that e-corporations are building a new industrial order. Future competition will not be between products. It will be between business models.

Irrelevancy will be a bigger risk than inefficiency. The most dangerous new business models are Web-based.

One of the greatest dangers for business is that old assumptions no longer hold true in the new "industrial order" or "e-Economy."

Andersen Consulting says that the following fundamental economic assumptions which where the basis for business success no longer hold true:

o Interaction and collaboration costs are no longer high. When these costs were high, large organizations had significant advantage. The Internet has dramatically lowered interaction and collaboration costs and tilted competitive advantage in favor of smaller, more nimble firms.

o Physical assets no longer play a central role in customer value propositions. In order to have worldwide or nationwide distribution traditional bookstores had to build hundreds of branches. (Amazon.com achieved global reach without a single branch.)

o Size is no longer a limiting factor, particularly because geography is no longer very relevant.

o Access to information is no longer limited or restricted. The Internet provides access to vast amounts of data and information worldwide. The limiting factor now is time to attend to the sea of information that has been unleashed.

o No longer does it take years and massive resources to build a global business. For large businesses, this is a very scary reality.

Having to operate under new rules has always been a major problem for established corporations, especially the more successful ones in love with their successful strategies and pushed by the momentum of size and unable to change quickly.

If you're in business today and want to be in business tomorrow you have no choice but to become an e-Business. In a few years, all surviving firms will be in e-business. The rest will be gone.