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Chapter 1. Introduction > Strategic Issues

Strategic Issues

We believe the advent of the Internet brings with it two strategic issues: concentration versus empowerment, and new competitive challenges.

Concentration Versus Empowerment

The Internet permits direct access from creators of value to consumers and greatly reduces the costs associated with distribution. This could lead to a great concentration of suppliers or to the opposite—the creation of tens of thousands of small and medium-sized suppliers to global niche markets. It seems likely that both will happen. On the one hand, there may be a handful of music supersites combining excellent prices, great customer service, and worldwide distribution, but there won't be hundreds. On the other hand, easy access to a global community can enable marginal niche markets to reach a critical size capable of supporting a profitable business. For example, an electronic store serving the global market for antique buggy whips could be a viable business.


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