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.
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?
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