E-commerce and corporate strategy: an executive perspective

Despite the recent downturn in Internet-based business, the dollar value of electronic commerce (EC) transactions is increasing at an astounding rate. In consumer-to-business applications, the amount of money spent by online shoppers is nearly doubling every year and is expected to approach US$ 100 billion by 2004 while business-to-business sales is expected to reach US$ 1.3 trillion by 2003. These opportunities, powered by the evolving computing and communication technologies, enable companies to gain tremendous operational efficiencies, personalization, and information based products and services. More and more conventional brick and mortar firms see e-commerce initiatives as offering strategic opportunities to transcend their normal operations. This study proposes that e-commerce initiatives are important strategic initiatives and that firms with a stronger EC market orientation will be more successful. Content analysis of CEO's letter to shareholders of 145 Fortune 500 firms was conducted to evaluate the importance of EC and strategic orientation. The results provide support to the study's propositions and indicate that EC must be pursued carefully as a strategic initiative rather than as an appendage to an existing organization. (C) 2002 Elsevier Science B.V All rights reserved.