BizAims

Participants in the electronic marketplace are not limited to so-called digital product companies such as those in publishing, software, entertainment and information industries. The Digital Age and the digital revolution affect all of us by virtue of their process innovations. At the least, through WebTV and digital television, the way we watch TV news and entertainment programs will change. Changes in telecommunication will affect the way we receive information, product announcements, orders, etc. As phones, fax machines, copiers, PCs and printers have become essential ingredients in doing business, so will be emails, Web sites, and integrated digital communications and computing.

While today's office business machines are not integrated (e.g. faxed orders have to be typed in on computers), the much talked about "convergence" will drive all these equipment into one digital platform, whether it be a computer connected to the Internet and intranets, or a new kind of device capable of interacting with other devices, because that device will prove to be more efficient and productive. (Although, will it be easier to use? That depends on how developers and industry leaders promote interoperability and standardization.)

Even seemingly-mundane book stores face different challenges in the electronic marketplace by virtue of having digital processes in their business operations. The case of Amazon.com vs. Barnes & Noble shows that the very definition of "stores" has to be re-evaluated. This also touches upon the issue of taxable nexus and sales tax collection on the Internet.

Distributing books require numerous local outlets (local book stores) to provide convenient access to customers. At the same time, mail order distribution has been used for many decades through various book clubs. Taking this direction into the Internet, Amazon.com has become the leading online bookstore, billing itself as the "largest bookstore" on earth not by opening numerous branch stores but via the Internet. The "biggest bookstore", Barnes & Noble with a towering share of revenues and physical book stores, has been forced to respond to Amazon.com's challenge by opening its own Web store as well as by bringing a law suit against its challenger. (See insert: The Fight Between the Biggest and the Largest) What are competitive strategies of these two book stores? Will any business selling physical products be facing a similar competition?