This paper examines how firms use the Internet and the emerging "global
infostructure" to improve key processes and competitive capabilities. It
proposes the widespread diffusion of the emerging "infostructure" will
dramatically reduce transaction costs, leading to growth in electronic
commerce and productivity while reducing the profit opportunities of
inefficient firms. In this wired world characterized by low transaction costs
and noisy environments, firms will have to re-focus their strategies to
achieve market leadership and capture mind share for competitive
advantage. To achieve market leadership firms must seek advantage from
economies of scale, scope, or externalities. Alternatively they must
differentiate themselves through unique merchandise and innovation or
develop specialized customer relations. To capture mind share firms must
develop integrated cross media marketing programs. These programs will
push products through various online or related promotions or develop
strong brand identities for products. Thus this paper identifies competitive
issues in a wired world and outlines various foci for strategic responses to the
above challenges.Information Systems Working Papers Serie