Winners they may be in the real world, but that does not mean they are indifferent to the way the Net is altering their businesses. On the outside. and from the inside. a host of savvy CEOs is juxtaposing their real-world advantages with the e-nabling power of the Web. the result their competitive dreams are no longer wisps in cyber space. They are realities

By Rakhi Mazumdar

Admit it. And then capitalise on it. The most ubiquitous member of the English alphabet is now the brick-and-mortar CEO's biggest headache. But that pesky little letter, that suddenly seems to precede everything in the world of business around you, can also be your new source of competitive advantage--without having to jettison the success that you've built up in the real world.

Provided, of course, you're serious about building a bricks-and-clicks corporation. One that straddles bits as well as bytes, mortar as well as the mouse. As K.V. Kamath, the CEO of ICICI, is. As Deepak Parekh, the CEO of HDFC, is. As Ajit Nambiar, the CEO of BPL, is. As J.J. Irani, the CEO of TISCO, is. As Clyde Cooper, the CEO of Blue Dart, is.

Don't panic. None of these pioneers among your peers is swinging an axe at the foundations of their real-world businesses, built through a combination of insight, industriousness, and innovation, to start competing on equal terms with e-ventures not yet out of their toddling years in terms of age. None of them is pulling products out of their traditional distribution channels to furiously peddle their wares in e-malls. None of them is demolishing the brand equity they have built up to enter the Netspace with new products and services simply because this is the market of the future.

Perish the thought. What they're doing instead--and so must you--is to exploit the Net to add a shine to their real-world competitiveness. Remember, therefore, that strategy, and not--repeat, NOT--the nagging need to get into the Net because everyone's in there must pilot the extension of your corporation from brickworld to clickdomain. If you doubt this strategy, look at what Kamath, the crafty CEO of ICICI, has achieved. He always wished to transform ICICI from a financial institution into a financial services supermarket. And now, in the zero drag-coefficient environment of the Net, where entry-barriers are low, and speed, everything, the digital-meister is realising his dream. A mere 45 days is what he gives a project-team to get a new business off the ground. "That's the rule of the Net," concurs Nachiket Mor, 35, Head (e-Commerce initiatives) ICICI. "Get the product out in front of the customer."

So, checked your company's NCQ lately? Sure, you haven't heard that term before: it captures a company's potential to exploit the Netspace and the threat that it faces from e-players, both variables determined by the nature of the business that it is in, and the internal competencies that it possesses. We'll call it your company's Netspace Competitiveness Quotient. How do you determine it? Remember that there are 2 sides to operating in the e-space: the outside and the inside.

The first involves establishing connections with your customers: building your brand, selling products and services, providing information, collecting feedback, gathering customer profiles et al. This is the area where the majority of new e-biz players are scoring hits against their brick-and-mortar counterparts, offering the customer, as they do, new methods of buying, customising, and--most important--getting low prices.

The second? It encompasses your internal operations: design, supply-chain management, manufacturing, and delivery systems. Don't be astonished: big corporations like yours are already basking in the benefits of moving parts of these activities into the Netspace.

So, NCQ = NCQ Outside + NCQ Inside.

Why is this critical? Simple: this e-quation is the starting-point of your brick company's click strategy.

The Net and consumer softs

If you're in a consumer products business, targeting thousands and millions of buyers with products like branded soaps or soups, you have to continue selling in the brickworld for years to come. Pure e-biz players will not pose a threat to your manufacture-and-market model, since the virtual marketspace does not facilitate the distribution of low-value consumer non-durables at competitive prices. You won't, for instance, be Amazoned out of your soaps-and-toiletries business by a digital upstart accepting on-line orders. But, while the threat is low, what of your opportunities?

To exploit the e-space, consumer product companies can use the Net to build competitive advantage in 3 ways: by building relationships with customers, using information as the means to serving the unique needs of each. Collecting data about individual customers' needs in a way that will enable you to do some creative segmentation. And building your brand equity by using the powerful customisation of service that the Net allows.

The Gujarat Co-operative Milk Marketing Federation's (GCMMF) Website, for instance, offers customers in 75 Indian cities the option of ordering the entire Amul range of products on-line, but the co-operative views its Website more as a vehicle to build brand equity and nurture customer relationships. Thus, it keeps in touch with the 50,000 customers who have, thus far, bought Amul products on-line, informing them about new launches at one level, and soliciting customer feedback at another. Says B.M. Vyas, 49, Managing Director, GCMMF: "The Net facilitates mass communication and transparency--both key factors in our kind of business." And Hindustan Lever's Keki Dadiseth is encouraging the FMCG behemoth to not just use the Net as a parallel distribution channel, but to actually create specific products for it. As savvy com.dot ceos are discovering, the very interactivity of the medium can act as a significant driver of brand equity.

The Net and consumer durables

Doing business with durables and services rather than consumer softs? Well, that does mean greater threats--but also greater rewards. Consider, first, just where on the chain your organisation captures the most value, translatable into margins and profits: is it by offering decidedly superior product performance? By having the highest mean time between failures in your product-category? By providing a fast and efficient service component? Or by offering the lowest price?

While e-players cannot compete with you on product-related parameters, since they're not manufacturers, the threat to your company comes from their ability to collect and disseminate information that can erode your brand and its power to command a premium.

Take jaldi.com, which allows a customer to use a single Webpage to shop for comparative features, performance parameters, prices, and bargains between competing brands. The customer's choice in this situation will, obviously, be based less on the power of your brand, and more on the information available to her from this infomediary's offering. All the propositions around which you may have built your brand could vaporise. View the entry of such information-vending players into your value chain as a threat--and you won't get far. But interpret their entry as a new space for extracting an edge over your rivals, and you could leap up the NCQ scales.

The trick? Grow the credibility of your brand by meeting your customer's need for information yourself, instead of allowing someone else to play that role. If that means providing data about your competitors, do it. Remember, if your competitor offers greater value than you do, you will not be able to hide that from the customer who has access to the Netspace. So, while you have no choice but to match your rivals on customer-value in the real world as far as the product is concerned, you can use the Net to steal a march over them, using information as your performance tool.

To see how that can be done, take a look at the way in which Godrej-GE proposes to use the Net to connect to its customers. Godrej-GE's on-line strategy revolves, not around on-line sales, but CRM (Customer Relationship Management). The first stage of the CRM effort is a virtual call centre that can deal with customer queries on-line, and in real-time. Information, Godrej-GE believes, can be an effective USP.

Explains Vijay Crishna, 53, CEO, Godrej-GE: "We have started with the simpler applications that will focus on customer interactions; once that is done, we will upgrade them." And BPL's Ajit Nambiar is getting his organisation around to the view that the Net can serve as the ideal information chain. Affirms Nambiar, 35: "Everyone (the company, its customers, and its supply-chain partners) will be a part of one collaborative network. And a seamless information chain will integrate our ERP and CRM grids."

However, if information plays a critical role in the on-line strategies of consumer durable companies, it plays a far greater role in that of companies in the services business. propertyindia. com, a HDFC-promoted entity hopes to become a supermarket for real estate--on-line and off-line. Explains Deepak Parekh, 54, CEO, HDFC: "This portal will lead up to Web-based real estate transactions. Visitors to the site can access information not just on a wide range of properties, but also on the other aspects of real estate: legal, technical, and architectural." The message to e-wannabe com. dots? Overinform; there's no such thing as too much information.

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