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Board of Directors

In: Business and Management

Submitted By 0312711
Words 5818
Pages 24
Fathoming Porter’s five forces model in the internet era
G.D. Karagiannopoulos, N. Georgopoulos and K. Nikolopoulos

G.D. Karagiannopoulos is at TREK Consulting SA, Athens, Greece, N. Georgopoulos is at the Department of Business Administration, University of Piraeus, Piraeus, Greece and K. Nikolopoulos is at the Lancaster Centre for Forecasting, Department of Management Science, Lancaster University Management School, Lancaster, UK.

Abstract Purpose – To investigate the impact of the internet in ‘‘traditional’’ market rules. Design/methodology/approach – An opinion piece based on Michael Porter’s arguments for the new economy. Finding – Michael Porter’s arguments for the new economy provide a useful starting point in the analysis of the environment. His arguments are based on exaggerated phenomena. Factors that determine a sector’s profitability could be enriched with the innovation that prevails in the particular sector. Originality/value – An attempt to criticize Porter’s thoughts regarding internet and industry structure and to enrich the Porter’s five forces model with the ‘‘power of innovation’’. Keywords Internet, Market forces, Economics, Innovation Paper type Viewpoint

Introduction
Distinguishing between internet and non-internet, or between the so-called new economy and the old economy is today as useless as it would have been a century ago to compare companies with telephones to those without. By using the infrastructure of the emerging electric and telephone networks, the manufacturers changed the US economy exactly as today’s Silicon Valley entrepreneurs gain power by using computers and communication infrastructure to change the international economy (Levis et al., 2002). The internet is an extremely important new technology and it is comes as no surprise that it has received so much attention from all market elements. If someone wants to

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