In the chapter, Porter identifies four generic strategies that assist companies with dealing with the five competitive forces he describes. Identify each of the four strategies, and give examples of how a specific company, with which you are familiar, does use or could use information systems for each of the strategies. Examples should be different than those given in the text.
- Traditional Competitors.
ReplyDeleteAll firms share market with space with other competitors who are continuously devising new, more efficient ways to produce by introducing new products and services, and attempting to attract customers by developing their brands and imposing switching costs on their customers.
* Porter's competitive forces model
1- New Market Entrants.
In a free economy with mobile labor and financial resources, new companies are always entering the marketplace. In some industries, there are very low barriers to entry, whereas in other industries, entry is very difficult.
Example, It's easy to open a small restaurant or small grocery. while it's difficult and more expensive to enter computer chip business, which is very high capital cost and requires significant expertise and knowledge that hard to obtain.
2- Substitute Products and Services.
In just about every industry, there are substitute that your customers might use if your prices become too high. New technologies create new substitute all time. Even oil has substitutes: Ethanol can substitute for gasoline in cars; vegetable oil for diesel fuel in trucks; and wind, solar, coal, and hydro power for industrial electricity generation.
Example, we could use the sun to get the power and we substitute to use electric power.
3- Customers.
A profitable company depends in large measure on its ability to attract and retain customers, and charge high price. The power of customers grows if they can force a business and its competitors to compete on price alone in a transparent marketplace where there is little product differentiation, and all prices are known instantly.
For instance, games market on the internet, many people can find multiple suppliers of just about any current game.
4- Suppliers.
The market power of suppliers can have a significant impact on firm profits, especially when the firm cannot raise prices as fast as can suppliers. The more different suppliers a firm has, the greater control it can exercise over suppliers in terms of price, quality, and delivery schedules.
Example, Manufacturers of Playstation almost have multiple competing suppliers of games, such as controls, display screens.
I'm familiar with new market entrants that the company must enter the market with strong products and services. I could see the substitute products and services because some companies their products are expensive and you could find another one but cheaper.
I'm familiar with buying some stuff online and that's faster and any where. Suppliers are almost all the companies are doing it to get their profit.
Information system
Each of which often is enabled by using information technology and systems, law-cost leadership, product differentiation, focus on market niche, and strengthening customer and supplier intimacy.
Low-Cost leadership using information system to achieve the lowest operational costs and the lowest prices. For example is Dollar Tree.
Product differentiation using information systems to enable new products and services, or greatly change the customer convenience in using your existing products and services. For instance, Bing.
Focus on Market Niche using information systems to enable a specific market focus, and serve this narrow target market better than competitors. Information systems support this strategy by producing and analyzing date for finely tuned sales and marketing techniques.
For example, Parking area's system analyzes detailed data collected on car, and each car profitability.
Strengthen customer and supplier intimacy using information system to tighten linkages with suppliers and develop intimacy with customers.
Example, Nike tries to emphasize low cost as well as the ability to create your shoes its personal shoes.
Need explanations and more information. points off.
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