Strategy and Social Networks

by Gareth
4 minutes
Strategy and Social Networks

It has been 18 years since Michael Porter wrote his article "Strategy and the Internet" and, today, the text is often viewed in light of the emergence of "Social Networks". The background to the text is as follows: Without a strategy the web or social networks are useless.

In March 2001, Porter published his article on the role of internet strategy in the Harvard Business Review. Today, the web has become a far more familiar concept to all, even if we don't quite understand all the intricacies involved. However, since 20011, social media has revolutionised the web.

Today, everyone (people and companies) wants to jump on Twitter, Facebook, Linkedin,, however, the question, as in 2001, is: Do you have something really interesting to say? Do you have a strategy? If the answer is no... well, things won't go well for you. 

Let's evaluate some of the relevant points from Porter's article. Although it was written about the Internet, as mentioned above, these points work perfectly for social networks too:

Porter's own words are numbered and comments are made in italics.

1) The Internet does not change the rules of the game; even more, the internet does not override traditional sources of competitive advantage... it makes them more relevant than ever. 

What does this mean? Simple. No matter how much presence an entity has on social media, if it does not have something to offer, or some distinct advantage, it will not stand out.

2) As more and more companies begin to make use of Internet-based technology, the network itself is neutralized as a source of competitive advantage.

A truth that no matter how hard it sounds is completely verifiable. Is e-mail today an advantage? Having a website? No, because everyone has them. In fact, they are commodities. Sooner or later the same thing will happen with all modern technology, no matter if it is audio, video, virtual reality, 3D or social media. All technology and all websited have a limited lifetime if they are to be used as competitive advantages.

3) The true competitive advantages are where they have always been: in the offering of unique and differentiated products, own and valuable content, a better knowledge of the product, more efficient manufacturing processes, better customer service and better relationships.

Is it really necessary to explain this? You can see it with Apple, Google, GE, Kellogs, Nokia, Intel, Nike, IKEA, Amazon.

4) The winning strategy will be one that integrates the Internet to traditional sources of competitive advantage. Consumers will value more a combination of Internet and traditional methods that make production processes and support activities more competitive.

Again, no web application per se is the solution to the problem. If we are able to generate visits to our page via Twitter or Facebook but our landing page is disastrous or lacks an intelligent product or service offer, forget about goal conversions, as the result will be null and worse... it can be counterproductive!

5) Companies must design unique strategies instead of imitating each other in a frantic race to get there first. Having a strategy is a matter of discipline. It requires a strong focus on profitability and not just growth; in the ability to define a unique value proposition and make choices about what to do and what not to do. The future is to move from e-business to business and from e-strategy to strategy.

In 2019 you see loads of people and companies that want more and more followers but don't know what to do with them. It is more profitable to have 100 followers that generate goal conversions than 10,000 that only serve to give you a retweet. In this context, CRM and blended marketing are indispensable. 

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