In this first chapter, we want to briefly review what a few companies are doing to adapt to the Internet challenge. These examples will provide managers with some concrete examples of the complex problems they will face as they try to help their companies develop a response to the e-business challenge. At the same time, we will use these examples to raise some of the themes that we develop throughout the remainder of this book.

None of these companies is standing still, of course, so each of these stories is really only a snapshot of a company, as it was in mid-2000. Each of these companies will continue to make adjustments in hopes of evolving the best possible response to the e-business challenge. Their struggles to date, however, suggest some of the problems and opportunities that may arise at the companies of those who read this book.

Toys R Us

In 1997, Toys R Us was the leader in its market and owned toy stores throughout the world. A conventional business analysis, at that time, would have suggested that Toys R Us had a strong hold on its market. It had a well-established name brand and a good reputation. More importantly, any company that wanted to enter the toys market would have faced the huge expense involved in trying to duplicate the Toys R Us distribution system. The new company would have needed to build a large number of toy stores and warehouses to even gain a foothold in the...