Be amazoned

The report that the Tata group is getting into the Internet business is an indication that the established business groups in this country are slowly coming around to see the potential of the net. Many of them have been quick to get into the information technology business, but their response to the new net revolution has been rather sluggish. And yet, it is the established leaders which will be the most affected by the Internet revolution.

After all, the word quot;amazonedquot; is now being used for traditional brick and mortar companies which are being swamped by smaller, more nimble competitors who take advantage of the opportunities available on the Net. The writing on the wall for corporates is clear-either get onto the Net or be amazoned. The revolution in communications is rapidly transforming many aspects of business activity. Among its many consequences will be lower business entry costs, better customer information, easy price comparison, increased pressure on agents and intermediaries, lower distribution costs, global reach and new payment techniques. Costs will be greatly reduced.

Small companies will be vastly benefited, and big companies will lose the advantage which their monopoly global reach provided them. Competition will therefore increase exponentially. The most significant impact will be on business-to-business commerce. A single large company, GE, now does more electronic trade with its suppliers than all the retail commerce on the Internet combined. The established companies have an existing brand equity and a network of relationships. They are thus ideally placed to become preferred intermediaries for e-commerce. Ultimately, the bottomline for companies is that they must be flexible enough to adapt to change.