Strategic orientation and performance of internet‐based businesses

Abstract.  Many of the pure internet‐based businesses that proliferated over the past 5 years have encountered serious problems as their lofty valuations have plunged. Industry observers have attributed this phenomenon to a variety of factors, generally framed in terms of poor conceptualization or implementation of the ‘business model’. This study explores an often‐used concept in strategic management called ‘strategic orientation’ and applies it to internet‐based businesses. Based on an analysis of over 100 public businesses, firms that cluster together with similar strategic orientation are observed. These strategic groups are then analysed for performance differences. The results are discussed with the intent of learning from the dot‐burn effects as we evolve to the next generation of internet‐based business.

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