The Link among Information Technology, Business Models, and Strategic Breakthroughs: Examples from Amazon, Dell, and eBay

It is widely accepted that information technology (IT) plays a central role in creating and maintaining a firm's competitive advantage. When discussions turn to strategic breakthroughs—innovations that are so fundamental that they disrupt the way an existing market operates—however, the role played by IT appears less clear-cut. The experiences of three well-known companies—Amazon, Dell, and eBay—show that the way that IT was used to gain a more intimate knowledge of the customer formed a common component of each of their business models. Those companies' experiences also indicate that the task of creating the type of radically different business model needed to create a strategic breakthrough might be easier to achieve in a new organization, unencumbered by the baggage of the past, than it is in an established organization with a preexisting business culture and an established way of doing things.