There is a fundamental difference between real-world business and online business, one that is often overlooked in considering strategy and positioning. The economics of the real world are based on scarcity. Scarcity of resources (i.e. oil and gas, diamonds, wood) that can be turned into products and thus commercialized. The Web is all about abundance. The raw material is information. No physical goods are produced on the Web. Physical goods may be produced as a result of information turned into knowledge leveraging the Web. The Web is the point where ideas are created, that can be monetized through various business models (physical or digital) and acts as a transaction platform.
By understanding that there is no scarcity of information, a company can look at how to shape that information to work with it’s real-world business model. Since the information is not abundant, the value has to be built from shaping, packaging and adding value to the information that results in digital products or physical products being sold. Perhaps the best example of a digital product being successfully shaped and sold is music, and specifically iTunes. The music was everywhere, available through multiple online channels, and in the physical world via CD’s in retail stores. Apple understood that the CD or iPod is simply a “container” for information (music is essentially information after all) and so is a PC a container. Apple figured out how to make the containers work with the digital information, shaped it, packaged it and are making a mint.
As we develop strategies for businesses today, it is the fundamental difference in economic models that essentially becomes the cornerstone in forming an approach to integrating the corporate Web strategy with the real-world operations. A traditional business understands costs of inputs, production, selling and profit margin as a result of outputs. For most businesses, the Web is simply seen as a cost of sales line item, not as a resource which can shaped multiple ways to both generate revenues of physical products but also of knowledge products. That Knowledge Transactions hold inherent value as well, and properly integrated with real-world operations derive direct economic impact.
The Web is an abundant, renewable, increasing resource. It can be leveraged in new ways, beyond advertising models and viewed outside of the real-world approach of “scarcity” can offer revenue opportunities in-line with the real-world business model or save significant production costs. So as you plan corporate strategy, look at what is abundant and what is scarce - know where knowledge resources are, and look for ways to integrate them.