Fundamentals of Strategic

Advantage
The Competitive forces and
Strategies
 Business Competition
• Information technology can change the way
businesses compete.
 The Concepts.
• Competitive Strategy Concepts
• What are strategic information systems?
Those systems that support or shape the
competitive position and strategies of a
business enterprise.
Can be: TPS, MIS, DSS, etc.
 Competitive Forces and strategies
• How should a business professional think
about competitive strategies?
• How can competitive strategies be applied to
the use of information systems by a business?
• A company can survive and succeed in the
long run when it successfully develops
strategies to confront five Competitive forces.
 Michael Porter’s classic model of
competition
• (1) the rivalry of competitors within its
industry,
• (2) the threat of new entrants into an industry
and its markets,
• (3) the threat posed by substitute products
which might capture market share,
• (4) the bargaining power of customers, and
• (5) the bargaining power of suppliers
 5 Competitive strategies
• Cost Leadership Strategy
• Becoming a low-cost producer
• Finding ways to help its suppliers or
customers reduce their costs or to increase
the costs of their competitors.
• Differentiation Strategy
Firm to focus its products or services
• Innovation Strategy
Finding new ways of doing business.
Involve development of unique products and
services.
• Growth Strategies
Significantly expanding a company’s capacity
to produce goods and services, expanding into
global markets.
• Alliance Strategies
Establishing new business linkages and
alliances with customers, suppliers,
competitors, consultants, and other
companies.
5 basic competitive strategies using IT