`Three E Strategy' Paves The Way For Brick-And-Mortar Companies.

New dot.com businesses are bursting forth across all industry sectors. They are creating a new commercial world that is changing the basis of competition and posing major threats to established enterprises. Now, a new report from GartnerGroup, 'Embracing the E-World,' urges established businesses to turn the threat into advantage by considering a set of strategic responses based on relationships, purchasing power and new channels. The report warns, however, that the window of opportunity is closing. As the speed of change accelerates it will become almost impossible to play catch-up.

How can established businesses compete with the forceful dot.coms, their new business models and astronomical market valuations? The dot.coms steal their customers, cut margins, undermine brand values and attract the best talent. They are also taking the lion's share of new capital, making their cost of capital much lower than for established businesses.

Traditional businesses move slowly and are constrained by legacy systems, processes and people. Most alarmingly, the majority still does not know what to do. However, all is not lost for the Brick-and-Mortars.

Established businesses are advised to adopt one or more of three strategic approaches to meet the threats from the dot.coms head on and to exploit the opportunities. Helen Mumford, Group Vice President Executive Programmes, Gartner Group, stresses that established businesses may take several of these approaches. What they absolutely must not do is do nothing.

Evade the dot.coms. Although the dot.coms have the benefit of speed and novelty, the advantages of infrastructure, brand and relationships lie largely with established businesses. Companies may avoid the threat by deepening their existing relationships with the suppliers, intermediaries and customers that are most valuable to them.

Exploit the dot.coms. The dot.coms are creating a networked economy offering real benefits for established businesses. Companies should use the Internet to extend supply chain management and buy from new suppliers and intermediaries.

Evolve into a dot.coms. Many new opportunities can be exploited by sold as well as new business. Established businesses can start selling directly on the Web, become online intermediaries - or create something completely new!

"The e-world is an exciting and challenging place for every business. However, success in the e-world requires more than a good business model, new management approaches are also vital," says GartnerGroup's Mumford. Established businesses should therefore execute an e-world migration. They should adopt new approaches to every aspect of business including formulating strategy, organizing, planning, implementing and managing risks.

Finally, the risks are real and the decisions are difficult, but that indifference is not an option. Ultimately, companies must manage their e-businesses for maximum benefit, not minimum risk.