1. The processes and capabilities of firms have been and will continue to be significantly changed by the Internet. There is huge doubt, however, about what these processes and capabilities might evolve into. In some cases, use of the Internet has become an order qualifier. In other environments it has the potential to be an order winner. Management by Web (Business Week, August 28, 2000) provides an extensive overview of anticipated changes. One anticipated impact is that smaller companies will use the Internet to make themselves "bigger" by gaining economies of scales, while big companies will use the Internet to make themselves "smaller" by reducing complexity.

2. For service-oriented businesses, processes are not only critical from a "capability" standpoint, but also critical from the standpoint of quality, because customers are so directly involved in many of the processes. For a retailer, even processes that seem far removed from the customer can result in customer satisfaction. In A Kmart Special: Better Service (Business Week, September 4, 2000), the aftermath of Kmart's attempt at a turnaround is discussed. Numerous problems exist, including

Poor inventory management that leads to chronic empty shelves;

A lack of focus on the customer; and

A muddled marketing strategy that hasn't been able to differentiate Kmart from competitors.