Depending on who you hear it from, e-business is either the universal panacea or the death knell for all non-web enterprise, recent dot.com failures not withstanding. For traditional businesses without a winning Internet strategy, the environment can be extremely stressful. These companies need to understand the realistic threats and opportunities posed to them by the Internet and develop a robust approach to moving ahead in the Internet space.

Transitioning traditional businesses to the Internet always presents risks: channel partners who are alienated, asset strategies that are compromised, unwanted customers who are drawn in, and inappropriate customer value propositions that are reinforced. Additionally, businesses must meet the challenge of moving large portions of their operations to the Internet while keeping their customers, rather than their technology, at the fore in their strategic decisions.

It is clear, however, that traditional businesses can not only survive their move to the Internet, they can exploit this technology to thrive. Furthermore, established businesses can leverage their experience to outperform their pure-play, dot.com competitors. There is growing evidence that established brands are critical in earning customer trust online. The ability to offer multiple sales channels (i.e., “brick and mortar” stores working in conjunction with an e-commerce web site) also distinguishes traditional businesses from their Internet-only counterparts. The dot.coms’ main advantage – access to venture capital – is quickly dissolving as investors begin to demand performance based on the more traditional metrics of revenue and profit. All of which suggests an environment where even late-to-Internet traditional businesses can compete successfully.

The challenge, then, for large established companies seeking a place in the web-enabled world, is to formulate and execute strategies that exploit the new opportunities afforded by the Internet. In order to do so, these companies should seek to use the Internet to:

• Re-engineer how they execute business today, considering each operational function through the lens of "how can the Internet improve efficiency here?"
• Create new, more advantageous, system-wide relationships between all the industry players, such as other suppliers, distributors, customers, and even competitors
• Re-think and re-draw the boundaries - i.e., products/services, channels, customer segments, and geographies - of where they play
• Properly execute the move to the Internet by securing the right technology and minimizing the temporary disruption a shift will inevitably cause