FIVE Force Model

Learning Objectives
Chapter 2. • List the identifying factors of the eras of information

Strategic Use of Information usage.
• Know what makes an information resource valuable.
Resources
• Explain how information resources are used
strategically in context of the 5-forces
5 forces model
model.
Jason C. H. Chen, Ph.D. • Understand how information resources can be used to
Professor of MIS alter the value chain.
School of Business Administration • Explain the importance of strategic alliances.
Gonzaga University • Know the risks of information resources.
Spokane, WA 99223
chen@gonzaga.edu
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
2
Discussion Questions - Answer

Discussion Questions • Those who agree with this statement might argue that
even the capability of the IT organization is not a
• Q4 sustainable advantage because people come and go,
they can be bought by another organization as a move
• It has been said that there are no sustainable to create the capability elsewhere, and their skills and
knowledge atrophy over time, when new capabilities
competitive advantages gained from IT arise.
i Witness
Wi IT organizations
i i who
h excelled
ll d at
other than the capability of the IT managing mainframe applications, who are now
organization itself. Do you agree or struggling to keep up with web-based applications.
• Those who disagree with this statement might argue
disagree? Defend your position. that the key to sustaining any advantage comes from
the way all business resources are organized and
used, and ultimately that comes down to how the
managers and the people are able to perform.
John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
3 John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
4
What is the Sustainable Competitive

“Competitive Advantage”? Advantages
• A competitive advantage is a benefit • However, firms may create/improve their
derived from something a company does or competitive advantages only if they:
has that its customers want and its – have capacity to learn,
competitors cannot (or choose not to) – employ revenue management approach.
• With the service economy accounting for over 70
match. percent of GDP in OECD (Organization for Economic
Co-operation and Development) countries, service
firms are becoming increasingly competitive with
revenue management (RM) and pricing becoming
central in their focus for sustaining long term
profitability (and competitive advantage).
6
1
What is Business Model? Why New Models?
• A business model is a set of planned • We need some new models
activities (sometimes referred to as
– for how we go about exploring IT for
business processes) designed to result in a p
competitive advantage,
g ,
profit in a marketplace.
marketplace
– for IT infrastructure how we create it and
• The business model is at the center of the manage it
business plan. – for how we acquire, manage and deploy the
• An e-commerce business model aims to skills that are needed to run that infrastructure
use and leverage the unique qualities of the – Profitability (making money)
Internet and the www.
N N
Source: E-Commerce: business, technology, society, Laudon and Traver, A/W 7 8
competition structure/
Essentials for a Successful Enterprise culture
Value propositions Business Model vs.
1. Business model Internal/
Business landscape External Revenue Model
fulfill
2. Core competencies • Business model is the architectural
Strategic intent
Analysis configuration of the components of
(Porter, SWOT)
ffuture positioning
p g transactions designed
g to exploit
p business
Finance
Process
P
M
Management
H
H/R
T
Technology
… Strategy
Positioning
opportunities.
Corporate strategy •Positioning on product/market • Revenue model refers to “the specific
3. Execution Business strategy •Differentiation/choice of ways in which a business model enables
competitive advantage
revenue generation.”
Functional strategy •Competitive posture
Industry characteristics，
IT Role? Market growth，
N
Demand characteristics， N
Barrier of entry，etc.
Business vs. Revenue Model Four Important Entities for a

Successful Enterprise
Business Model Revenue Model
• Capital （资本）
Value creation Value appropriation • Technical （技术）
It describes the way in It can be realized through a • Human （人才）
which a company combination of
enables transactions - subscription fees, • Information （信息）
that create value for - advertising fees,
all participants, - transactional income (e.g.,
including partners, fixed transactional fees,
suppliers and referral fees, fixed/variable
customers. commissions, etc)
12
2
Information Resources
• The term information resources is defined as the
available data, technology, people, and processes
available to perform business processes and tasks.
• Information resources can be either assets or
EVOLUTION OF INFORMATION capabilities.
RESOURCES – IT asset is anything,
anything tangible or intangible,
intangible that can be used
by a firm in its processes for creating, producing and/or
offering its products (IT infrastructure is an asset).
– IT capability is something that is learned or developed over
time in order for the firm to create, produce or offer it
products.
14
1960s 1970s 1980s 1990s 2000+

Primary Efficiency Effectiveness Strategic Strategic Value creation
Information Resources (cont.) Role of IT Automate

existing paper-
based processes
Solve problems and
create opportunities
Increase individual
and group
effectiveness
Transform
industry/organizatio
n
Create collaborative
partnerships
• Over the past decades the use of information resources Justify IT ROI Increasing Competitive Competitive Adding
productivity and
has changed. expenditure decision making
position position Value
• Organizations have moved from an “efficiency model” Target of Organization Individual manager/
Group
Business
processes
Business processes
ecosystem
Customer,
supplier,
systems
of the 1960’s to a “value creation model” of the ecosystem
IInformation
f ti Application Data driven
Data-driven User driven
User-driven Business driven
Business-driven Knowledge-
Knowledge
2000’
2000’s. model specific driven
• Companies seek to utilize those technologies that give Dominant Mainframe-

based
Minicomputer-
based
Microcomputer
“decentralized
Client-Server
“distribution
Internet “ubiquitous
intelligence”
technology
them competitive advantage. intelligence” intelligence”
Basis of Value Scarcity Scarcity Scarcity Plentitude Plentitude

• Maximizing the effectiveness of the firm’s business
strategy requires the general manager to identify and Underlying Economic of
information
Economic of
information bundled
Economic of
information bundled
Economic of
information
Economic of
information
economics
use information resources. bundled w/
economics of
w/ economics of
things
w/ economics of
things
separated f/
economics of
separated f/
economics of things
things things
• Figure 2.1 shows this change. w/ (with)
f/ (from) Figure 2.1 Eras of information usage in organizations (Eras Model)
16
Network Externalities
• Definition - The phenomenon whereby a service becomes
more valuable as more people use it, thereby encouraging
ever-increasing numbers of adopters.
– Network effects
INFORMATION RESOURCES
• While the word-of-mouth
word of mouth method is often more influential AS STRATEGIC TOOLS
in the beginning, analysis may play a significant role later
in the cycle. In other words, you may adopt a service
initially because someone you know uses it; later, you may
adopt a service because "everyone" uses.
– IT Role?
– Network Externality offers a reason for value derived from
plentitude (Era IV & V)
18
3
Advantages of Information Resources –
What General Managers want are …
• General managers should consider the following to
understand the type of advantage the information
resource might create: HOW CAN INFORMATION
– What makes the information resource valuable?
– Who appropriates
pp p the value created byy the information RESOURCES BE USED
resource?
– Is the information resource equally distributed across STRATEGICALLY?
firms?
– Is the information resource highly mobile?
– How quickly does the information resource become
obsolete?
– When, where and …
What tools are available to help shape their strategic use?
What are the risks of using information resource to gain strategic
advantage
20
Striving for Competitive Advantage

The Strategic Landscape
• Firm level: Industry & Competitive Analysis
• Managers confront elements that influence the
– Competitive Forces Model
competitive environment.
– Competitive Strategy
• Slim tolerance for error requires managers take
multiple view of the strategic landscape, such as: – D’Aveni’s
D’A i’ H Hypercompetition
ii M Model
d l (7
(7-Ss)
S)
– First view - Porter’s five competitive forces model. • Business level
– Second view - Porter’s value chain. – Value-Chain Analysis
– Third view
• focuses on the types of IS resources needed (Resource Based
View).
22
Porter’s Five Forces Model and PORTER’S FIVE COMPETITIVE

FORCES MODEL
Value Chain NEW
Threats SUBSTITUTE
MARKET PRODUCTS
• According to Porter, there are five competitive ENTRANTS & SERVICES
forces in any industry, and the attractiveness of the •Switching cost
•Redefine products
•Access to and services
industry depends on the strength of each force. distribution channels
•Economies of scale •Improve
INDUSTRY price/performance
• Under the perspective of market structure,
structure Porter’s THE FIRM COMPETITORS
competitive forces model has been broadly adopted
•Cost-effectiveness
as the underpinning for investigating the effect of •Selection of suppler •Market access •Buyer selection
•Threat of backward •Differentiation of •Switching costs
information technology on the relationships integration product or service •Differentiation
between suppliers, customers, and other potential

threats. SUPPLIERS CUSTOMERS
Bargaining power
23 John WileyDr.
24 N
& Sons,
Chen,Inc. Dr. Chen,
The&Trends Information
of the InformationSystems
Systems –Technology
Theory and Practices TM -24
4
Figure 2.3 - Five (5) Competitive Forces with Potential
Strategic Use of Information Resources (Porter)
Group Work/
Discussion Questions
• Using the five competitive forces model as
described in this chapter to describe how
((and what)) IT might
g be used to provide
p a
winning position for:
• A global airline
– Use UA as an example (Group work together)
25N John Wiley & Sons, Inc. & Dr. Chen, Information Systems – Theory and Practices
26
2. Use the five competitive forces model as described in this

chapter to describe how information technology might be PORTER’S FIVE COMPETITIVE
used to provide a winning position for each of these FORCES MODEL
businesses
NEW SUBSTITUTE
Threats
• Ans: The five forces are substitutes, supplier, MARKET PRODUCTS
ENTRANTS
buyer, new entrants, and inter-industry. The & SERVICES
question asks the student to pick a force and

describe how each of these 5 types of business Internal Forces: Other forces should
might use information resources to reduce the 1.customer focus
2.communication,
.co u cat o , INDUSTRY
be considered in the
e-Age:
g
THE FIRM
threat of that force. An example of analyzing the 3.core competencies
4.complexity
COMPETITORS 1. Digitalization
2. Globalization
substitute force is given below: 5.Quality 3. Deregulation
•Cost-effectiveness
• Global airline-it is difficult to think of what might •Market access
•Differentiation of
be a substitute threat for a global airline. Perhaps it product or service
might be a cruise ship offering "offices at sea". In
that case the global airline might use information
SUPPLIERS
resources to offer "offices in the air". Bargaining power
CUSTOMERS
27 John WileyDr.
28 N
& Sons,
Chen,Inc. Dr. Chen,
The&Trends Information
of the InformationSystems
Systems –Technology
Theory and Practices TM -28
The Five Forces Model and IS Porter’s Value Chain Model

• The Five Forces Model provides a way to think
about how information resources can create • The value chain model highlights specific
competitive advantage. activities (i.e. create, deliver, and support a
• Using Porter’s Model, General Managers can: company’s product or service) in the business
where competitive strategies can be best
– Identify key sources of competition they applied
pp and where information systems
y are
f
face. most likely to have a strategic impact.
– Recognize uses of information resources to • Therefore, the value chain model can be
enhance their competitive position against employed to identify specific, critical leverage
competitive threats points where a firm can use IT most
effectively to enhance its competitive position.
– Consider likely changes in competitive
threats over time
N
30
5
Figure 2.6 Process View of the Firm: The Value Chain Using Information Resources to Alter the
Value Chain
• The Value Chain model suggest that competition
can come from two sources:
– Lowering the cost to perform an activity and
– Adding value to a product or service so buyers
will be willing to pay more.
(Value) • Lowering costs only achieves competitive
advantage if the firm possesses information on the
competitors’ cost structure
• Adding value is a strategic advantage if a firm
possesses accurate information regarding its
customer such as: which products are valued?
Two broad categories:
Primary activities – relate directly to the value created in a product or service. Where can improvements be made? When to …
Support activities – make it possible for the primary activities to exist and remain coordinated N N
32
The Value System:

Interconnecting relationships between organizations
The Value System (Fig 2.5)
• The value chain model can be extended by
linking many value chains into a value
system.
• Much of the advantage of supply chain
managementt comes from
f understanding
d t di
how information is used within each value
chain of the system.
• This can lead to the formation of entire new
businesses designed to change the
Upstream Firm Downstream
information component of value-added value value value
activities. N N
34
3. Using the value chain model, describe how information technology

might be used to provide a winning position for each of these
Discussion Questions businesses:
• Ans: The value chain has primary activities (inbound logistics,
operations, outbound logistics, marketing and sales and service)
• Q3- Using the value chain model as and secondary activities (organization, human resources,
technology, and purchasing). The question asks the student to
described in this chapter to describe how IT describe how each of these 5 businesses might use information
resources to add value to the activities to their company (and
might
g be used to provide
p a winningg position
p possibly to partners in their supply chain).
chain) An example of
analyzing the inbound logistics is:
for: • Global airline-
• A global airline • the reservation system data can be analyzed by an information
system to see which customers fly particular routes….When the
• A Web-based wine retailer seat occupancy drops on these routes, the customers that
frequently fly such routes could be contacted and offered a
reduced price on a ticket for flying that route during the next
• A bank month…. In that way the load factor could be improved (this
could also be modified to be a marketing and sales activity)
36
6
3. (cont.)
• Web-based wine retailer – a system could be set up where

BUSINESS FOCUS
the wine retailer has a direct connection with wine
companies and even growers to reduce costs that can then
be passed on to consumers to drive up revenues. Also, E-BUSINESS
predictive analytics could be used to help the retailer •SCM Customer
predict future demand for various types of wines which •CRM Demands Products
centric
could be communicated to suppliers up stream. •BPR
BPR
•ERP
• Bank- The telecommunications system may support
Electronic Funds Transfers to ensure the transfer of funds What they need/want?
Who are the customers?
into the bank. This could also make the outbound logistics How many they need/want?
Where are the customers?
of the Federal Reserve Bank more efficient. When they need/want?
Their purchasing habits
How to reach them?
CRM and the Value Chain WHY CRM?

• In this competitive age when product
• Customer Relationship Management (CRM) is a
differentiation is difficult, CRM is one of the
natural extension of applying the value chain
most valuable assets a company can acquire.
model to customers.
• CRM includes management activities performed
• The sooner a company embraces CRM the
to obtain, enhance relationships with, and retain better off it will be and the harder it will be
customers. for competitors to steal loyal and devoted
customers.
• CRM is a coordinated set of activities.
• CRM is more than just “Marketing” (what
• CRM can lead to better customer service, which
leads to competitive advantage for the business.
else?)
CUSTOMER RELATIONSHIP New Forces in Today’s Economy

• Overcapacity and hypercompetition.
MANAGEMENT’S EXPLOSIVE GROWTH – Overcapacity is 25% pharmaceuticals, 30% chemicals,
35% automobiles
– Leads to falling prices and margins, mergers, and
CRM Business Drivers company failures
• Ascendant power of customers.

– Customer shortage
– Price transparency
• Ascendant power of distributors over

manufacturers.
• Growth of digitalization and the Internet as major

sources of efficiency and profitability.
• Proliferation of channels and media.
• Globalization and global interdependence.

7
Supply Chain Management BASICS OF SUPPLY CHAIN
• An approach that improves the way a company finds • Organizations must embrace technologies that can
raw components it needs to make a product or
effectively manage supply chains
service, manufactures that product or service, and
delivers it to customers.
• Technology permits supply chains of customer
customer’ss and
supplier’s to be linked.
• Requires collaboration and the IT to support the
seamless connection.
• Electronic marketplaces can be used to limit
information sharing.
Involvement
43 (integration)
INFORMATION TECHNOLOGY’S
FIVE BASIC SUPPLY CHAIN ROLE IN THE SUPPLY CHAIN
MANAGEMENT COMPONENTS • IT’s primary role is to create integrations or tight process and
information linkages between functions within a firm
Plan Source Make Deliver Return
The Resource-Based View Porter’s Model vs. Resource-Based View

• The Resource-Based View (RBV) looks at gaining
competitive advantage through the use of information Porter’s Model/Value Resource-Based
resources. Chain View (RBV)
– Determining whether a firm’s strategy has created value. Competitive Argues that aspects of the Maintains that CA
• T
Twoo subsets
s bsets of information resources
reso rces have
ha e been Advantage firm’ss industry create
firm comes from the
(CA) sources of CA. information and other
identified: resources at the firm
– Those that enable firms to attain competitive advantage
Focus (what Firm’s activities Resources that firm
(rare and valuable resources that are not common place).
adds value to can manage
– Those that enable firms to sustain competitive advantage
over the long-term (resources must be difficult to transfer the firm)
or relatively immobile).
48
8
4. Use the resource-based view as described in this chapter to
describe how information technology might be used to provide and • 1. Global airline
– they could utilize their global relationships to market strategically
sustain a winning position for each of these businesses: (p.72) to customers through a CRM system that would be difficult to
imitate because of their global reach. They could utilize IT talent
• Ans: The resource based view The Resource-Based View from all parts of the world to create systems that are innovative
(RBV) looks at gaining competitive advantage through the and strategic in nature (specialized billing system for example).
use of information resources. • 3. Appliance Service Firm
• The question asks the student to describe how each of these – similar to the local dry cleaner, an IS system could be used that
5 businesses might use information resources to add value to tracks repairs of appliances and determines which appliances
the activities of their company.
company seem to have problems with specific components.
components They could
• 1. A global airline then use customer service to get feedback on these appliances and
help customers to select appliances in the future that are more
• 3. An appliance service firm (provides services to fix and reliable, thus generating customer loyalty and service.
maintain appliance) • 5. Web-based wine retailer
• 5. A Web-based wine retailer – take advantage of its online presence to offer other services like
• 2. A local dry cleaner wine recommendations, possibly creative cooking recipes, and
• 4. A bank other services that would enhance its services.
50
Strategic Alliances
• An interorganizational relationship that affords one or
more companies in the relationship a strategic
advantage.
• IT can help produce the product developed by alliance,
share information resources across the partners’
STRATEGIC ALLIANCES existing value systems,
systems or facilitate communication and
coordination among the partners.
• E.g., Delta recently formed an alliance with e-Travel
Inc to promote Delta’s inline reservation system.
• This helps reduce Delta’s agency fees while offering e-
Travel new corporate leads.
• Also, Supply Chain Management (SCM) is another
type of IT-facilitated strategic alliance.
52
Aligning IS strategy with Business

Strategy Wiseman’s theory of strategic thrusts
• Using multiple approaches to evaluating the and strategic option generator
strategic landscape is helpful in determining I. Major options to secure a
strategic opportunities. II. Option Generator
competitive advantage
• Here, we look at three such approaches:
Suppliers Customers Competitors 1. What is our strategic target?
– Porter’s
o te s five forces
fo ces model
odel oof the
t e competitive
co pet t ve 2. What strategic thrust can be
advantage of firms Differen- used against the target?
tiation
– Porter’s value chain model of internal 3. What strategic mode can be
Cost used?
organizational operations
4. What direction of thrust can be
– Wiseman’s theory of strategic thrusts and Innovation
used?
strategic option generator (results in nine possible 5. What IS skills can we use?
major options to secure a competitive advantage)
N
53 54
9
Types of Strategic Alliances
• Supply Chain Management: improves the way a
company finds raw components that it needs to
make a product or service.
– Technology, especially Web-based, allows the supply chain of a
company’s customers and suppliers to be linked through a single
network that optimizes costs and opportunities for all companies in
the supply chain
RISKS
– Wal-Mart and Proctor & Gamble.
• Virtual Corporations: is a temporary (virtual) network of
suppliers, customer and even rivals linked by IT to share
skills, cost and access to each others’ markets
• Co-opetition: a new strategy whereby companies
cooperate and compete at the same time with companies in
their value net
– Covisint and General Motors, Ford, and DaimlerChrysler.
N 56
56
Potential Risks
There are many potential risks that a firm faces when attempting to
Summary of Key Strategy Frameworks
use IT to outpace their competition.
Usefulness in Information Systems
• Awakening a sleeping giant – a large competitor with deeper Framework Key Idea Discussions
pockets may be nudged into implementing IS with even better
Porter’s generic Firms achieve Understanding which strategy is chosen
features strategies competitive advantage by a firm is critical to choosing IS to
• Demonstrating bad timing – sometimes customers are not framework through cost leadership, complement that strategy.
ready to use the technology designed to gain strategic advantage differentiation, or
focus.
• Implementing IS poorly – information systems that fail because
they are poorly implemented D’Aveni’s Speed and aggressive The 7-S’s give the manager suggestions
hypercompetition moves and counter- on what moves and counter moves to
• Failing to deliver what users want – systems that don’t meet model moves by a firm make and IS are critical to achieve the
the firm’s target market likely to fail create speed needed for these moves.
competitive advantage.
• Web-based alternative removes advantages – consider risk of
losing any advantage obtained by an information resource that Brandenberg and Companies cooperate Being cooperative and competitive at the
Nalebuff’s and compete at the same time requires IS that can manage
later becomes available as a service on the web co-opetition model same time. these two roles.
• Running afoul of the law – Using IS strategically may promote
litigation
N
58
Keen’s Six-Stage Competitive Advantage

Relationship between profits and time Model
of market introduction
Stimulus for action
300
competitions (%)
250
First major move
200
150
Profits relative to c
Customer acceptance
100
50
Competitor catch-up moves First-mover expansion moves
0
-10 -5 0 5 10
Time of market introduction relative to competition (months)
Commoditization
Figure 7.10 (p.227)
N
60
10
When to Perform Activities
• First Movers
FOOD FOR THOUGHT:
Advantages Disadvantages
CO-CREATING
CO CREATING IT AND
• Build brand recognition • Newer technology BUSINESS STRATEGY
• Control scarce resources • Higher development costs
• Establish networks • Reverse engineering by
competitors
• Early Economies-of-Scale
62
Co-Creating IT and Business Strategy

Summary
• Using IS for strategic advantage requires more than
• Is FedEx a package delivery company?
just knowing the technology.
• What happens if FedEx’s IS goes down?
• What is the core of FedEx? • Remember that not just the local competition is a
• Information is increasingly
g y a core component
p of the factor in success but the 5 competitive forces model
product or service offered by the firm. reminds us of other issues.
• IT strategy is business strategy – they cannot be • Value chain analysis show us how IS add value to the
created without each other. primary activity of a business.
• Some company’s main product is information
(financial services). • Know the risks associated with using IS to gain
• FedEx can not function without IT even though they strategic advantage.
are primarily a package delivering company.
64
What is Web 2.0?

Mini Case 2-2: ZIPCAR
• "Web 2.0" refers to the second generation of web
• This is an interesting, short case about how development and web design.
– It is characterized as facilitating communication,
a new type of rental car company is able to information sharing, interoperability, user-centered design
operate
p in a completely
p y new business and collaboration on the World Wide Web. It has led to
the development and evolution of web-based
model, as compared to other rental car communities, hosted services, and web applications.
companies, and embrace Web 2.0 – Examples include social-networking sites, video-sharing
technologies to gain further competitive sites, wikis, blogs, mashups and folksonomies.
– Web 2.0 is the business revolution in the computer
advantage. industry caused by the move to the Internet as a platform,
and an attempt to understand the rules for success on that
new platform.
65
Source: http://en.wikipedia.org/wiki/Web_2.0
11
Questions 1. Analyze the business model of Zipcar using Porter’s
five forces model.
1. Analyze the business model of Zipcar using Porter’s five

• Ans: Zipcar has created a model that would be difficult
forces model. for other companies to imitate with its technology
2. Discuss the synergy between the business strategy of infrastructure and low over-head. This model would be
Zipcar and information technology.
technology difficult for traditional car rental companies to model
3. Are there any network externalities in the workings of due to their existing infrastructure and model.
Zipcar? If so, do they add value? How? • Buyers could utilize other rental companies, but they
4. As the CEO of Zipcar, what would you do to sustain a would lose the convenience offered by the Zipcar model
competitive advantage? of hourly rental agreements, and convenient locations.
Zipcar does not really have to worry about supplier
5. Is the ZIPCAR case related to “Hypercompetition power since it does not rely on proprietary goods.
Model”? What are they (in terms of 7S)?
68
3. Are there any network externalities in the

2. Discuss the synergy between the business workings of Zipcar? If so, do they add value?
strategy of Zipcar and information How?
technology. • Ans: Through their use of social networking
they provide value to the customer by providing
an open exchange of ideas, and feedback to
• Ans: There is tremendous synergy between Zipcar.
Zipcars business and IT strategy. Zipcar is
heavily dependent upon an automated process,
process 4. As the CEO of Zipcar,
p , what would yyou do to
and supports social networking of its clients, so sustain a competitive advantage?
that they can freely provide feedback on the • Ans: Continue to innovate through the use of IT
company and its products and services. and by listening to customer feedback on the
• IT completely supports what Zipcar is trying to social network sites. Look for strategic
accomplish partnerships with suppliers or other potential
providers of services that Zipcar could leverage
to improve its service or add extra value.
70
Hypercompetition model
• Is the ZIPCAR case related to
“Hypercompetition Model”?
• What are they (in terms of 7S)? Endd oof C
Chapter
pe 2
72
12

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Learning Objectives

Chapter 2. • List the identifying factors of the eras of information

Discussion Questions - Answer

What is the Sustainable Competitive

Business vs. Revenue Model Four Important Entities for a

1960s 1970s 1980s 1990s 2000+

Information Resources (cont.) Role of IT Automate

• Companies seek to utilize those technologies that give Dominant Mainframe-

Basis of Value Scarcity Scarcity Scarcity Plentitude Plentitude

Striving for Competitive Advantage

Porter’s Five Forces Model and PORTER’S FIVE COMPETITIVE

between suppliers, customers, and other potential

2. Use the five competitive forces model as described in this

question asks the student to pick a force and

The Five Forces Model and IS Porter’s Value Chain Model

The Value System:

3. Using the value chain model, describe how information technology

• Web-based wine retailer – a system could be set up where

CRM and the Value Chain WHY CRM?

CUSTOMER RELATIONSHIP New Forces in Today’s Economy

• Ascendant power of customers.

• Ascendant power of distributors over

• Growth of digitalization and the Internet as major

• Proliferation of channels and media.

• Globalization and global interdependence.

Plan Source Make Deliver Return

The Resource-Based View Porter’s Model vs. Resource-Based View

Aligning IS strategy with Business

Keen’s Six-Stage Competitive Advantage

Co-Creating IT and Business Strategy

What is Web 2.0?

1. Analyze the business model of Zipcar using Porter’s five

3. Are there any network externalities in the

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