Porter Competitive Forces Model

Information system focuses on allowing and sharing of the knowledge across the various business lines. It can be stated that it helps to increase the competency and offers the business with the overall competitive advantage. Therefore, in this paper the discussion will be made on the topic “information system with different concepts”. In the first phase of the paper the discussion will be made on the Porter’s competitive forces model and how it will help to attain the competitive strategies.  The second part of the paper will focus on the value chain model and how it will help in considering the overall opportunities related to strategic information system application. In the last phase of the paper, the focus will be given on the information system that will help the business to consider the core competencies.

So, in this paper the emphasis will be given on major factors related to porter competitive model, value chain and value web and at last the overall synergies that will help to achieve the competitive advantage in the market.

Porter competitive forces model is the concept that helps business to achieve competitive advantage. It can be stated that this tool was made by the Harvard Business School Professor Michael Porter and it helps to evaluate the overall attractiveness of the industry and its profits. Porter focuses on the companies who have the close watch on the competitors and also on the factors related to business environment. This model offers an effective site of company, its main competitors and the environment of the company. It is considered as the model, which emphasizes on the general business environment. There are five competitive forces which are related to this model. The first force is related to Threat of new entry, second is related with Buyer power, and third is related to threat of substitution. The next is related with supplier power and the last one is competitive rivalry (E. Dobbs, 2014).

Competitive rivalry focuses on the competitors and also their overall ability that threaten a company. There are many competitors who are present in the market and in this factor the emphasis is given on the overall competition level prevailing in the market.

The next factor is related to the new entrants into the industry. The power of the company is impacted by the forces of the new entry into the market. It can be stated that new entry of the companies into the market can be threat for the other companies in the competitive market.

The next factor is related with the power of suppliers. It can be seen that this force considers the concept that how suppliers can emphasize on the price of goods and services.  It can also impact the number of suppliers of the goods and services and also the cost with switch from one supplier to another (Volkow, 2017).

The next factor is related with power of customers. In this it can be seen that this emphasizes on the ability of the customers who drive down the overall price of the products and services. It also impact that how many buyers the company has and also the cost of the products of the one company to the other company. It can be seen that if the customers are small in number and also powerful then it holds a great power (Philipson, 2016).

Competitive Strategies and Information System

Threat of substitutes can be considered in a situation where the products or services of the company have threats.  In this it can be seen that products or the services can be easily substituted which is one of the threat for the business.  

It can be seen that these competitive forces models elaborates about the competitive advantage. There are many companies who perform good if compared with others as they have the overall resources that others are not able to consider. It only considers the commonly available resources in an effective manner. It can also be because of the superior knowledge and also assets related to information.  By considering these factors it can be easy for the companies to focus on maintaining the profits, productivity and also the revenue. These forces also help to enhance their stock market valuations as compared to the competitors in the market (Akhtar et al., 2018).

The companies also create competitive strategies by considering the information system. Four generic strategies are enabled by considering the information technology and system. In this it consists of various strategies. First is related with low cost leadership in which it can be analyzed that lower the operational cost, the lower will be the prices.  The next is related with product differentiation in which it enables new products and services which changes the customer convenience. The next is related with focus on the market niche in which it enable a specific market focus and it also serves the narrow target market which can be better than the competitors.  The next is related with the strengthening the customers and suppliers. In this it tightens the connection with the suppliers and also creates intimacy with the consumers (Jarzabkowski and Kaplan, 2015).

The information system can also support the competitive strategies.  In low cost leadership the use of information system can help to improve the inventory management, the supply management and also it maintains the overall customer response system. Wal-Mart can be one of the best examples.

The next is product differentiation in which the use of information system can help in maintaining the products and services that can be customized and personalized according to the need of the specific customers. The examples can be related to Google, eBay, Apple and Land’s End.

Focus on the market niche can also be the strategies in which the use of information system to make and evaluate the information to enhance the sales and also the marketing techniques.  In this the evaluation is done of the customer buying patterns and preferences which can be effectively focus on advertising and marketing campaigns to the small scale markets. The examples can be Hilton Hotels and Harrah’s.

There are also the basic principles related to the IT strategy for the company that will help in ensuring the technology for the business.  It can be seen that of the company is successful then the form can align with the IT and also with the goals of the business. It is important for the business people focus on the active role that will help to shape the IT to the enterprise. It is not possible for them to ignore the issues related to IT and also they will not able to consider the failure of the IT. It is necessary for them to have proper understanding that what IT can do, how it works and how it can be easy to analyze the overall profits. If there is no proper knowledge of the activities related to IT then it can impact the overall growth and profits of the workplace in the market. So, it can be necessary to have proper knowledge of the IT activities as it can help the companies to achieve success in the market (Birkinshaw, Zimmermann and Raisch, 2016).

Value Chain Model

Value chain is related with the overall set of activities that the company considers at the time of operating with the specific sector and this is considered so that it can be easy to deliver the valuable products or the services in the market. It can be stated that value chain model showcase the particular operations in company where the competitive strategies can be considered easily and also the information system will have the impact on the strategies. It can also been seen that the model showcase specific, critical leverage pints where the company can consider the use of information technology in a proper manner and it can enhance the overall market share. The value chain model also emphasizes on company as the series of operations that enhance the margin of the value to the company’s products and services. Overall operations are also categorized as the activities which are primary or supportive. The primary activities are also concerned with the production and distribution of the products and services of the company and also it make the value for the consumers (Van Alstyne, Parker and Choudary, 2016).

 The activities which are supportive can emphasize on the primary activities and it also includes the infrastructure of the company.  The value chain of the company can also be connected with the value chains of the suppliers, distributors and also with the customers. In this the major part is of the customers, suppliers and also the customers and through this the overall activities are managed of the companies in the competitive market (Breuer and Lüdeke-Freund, 2017).

Also, value chain model is considered to search the chances related to the information systems.  Information system is considered in every stage of the value chain to bring improvisation efficiency of the operations; it also reduces the cost and improves the overall profit margins. It also has the close connection with the customers and suppliers.  The companies use the information system to assist to examine that how the value adding operations are considered at every step of value chain. Information system can bring improvisation in the overall relations with the customers and also with the suppliers who can be not in the value chain but can be related to the extended value chain. The information system also assists the companies to maintain the track of the benchmarks in the company and also it identifies the best activities of the particular sectors. After evaluating the stages in the value chain, the company can focus on the list of candidate’s applications for the information systems (Burrough, McDonnell, McDonnell and Lloyd, 2015).

The value web is also one of the aspects and it is related with the value chain. It can be stated that value web is related with the collection of the independent companies that consider the information technology so that coordination can take place with the value chains to collectively focus on the products and services. It is also related with the customer driven and focuses on operating in a linear fashion as compared to the traditional value chain.  The value web is considered as the networked system that should be synchronized so that business processes related to customers, suppliers and trading partners on the various companies can be managed. The value web also assists the companies to identify the opportunities related to strategic information systems. Information system also enables the value webs that are considered as flexible and also it is related with the changes in the supply chain and with the overall demand.  The relations can also be grouped or ungrouped in relation to the overall situation of the market which is changing. The companies can accelerate the time to the market and also to the consumers by focusing on the value web relations to consider the decisions fast on who can deliver the products and services at the best price and location. Information system also helps the companies to manage the overall value webs. Value chain can help to maintain the overall competitive advantage in the market and also it boosts the overall activities of the company in the market (Bustinza, Bigdeli, Baines and Elliot, 2015).

IT Strategy for Business Growth

Also, in the present scenario, the changes can be analyzed just due to internet in relation to the competitive forces. Internet destroyed many companies and also endangered the companies. The internet has made the new markets and created the basis of the thousands of the new companies. The internet has also created new products and services with the new business models and new sectors to be developed easily. Through internet it can be easy for the company to introduce the new products and services in market and also it will help to enhance the overall growth in the market (Ogiela and Ogiela, 2014).

Just due to the internet, the competitive rivalry has also one of the intense factors. Internet technology is also related with the universal standards that can be considered by the companies or it is easy for the competitors to beat the competition level for the prices and for the new competitors to enter into the market. Just due to the information which is seen to the people, the internet also enhances the bargaining power of the consumers which can easily search the low cost of the customers related to the web (Eloranta and Turunen, 2015).  

It can be stated that information systems can help in promoting the synergies and also the core competencies. The large companies are related with the gathering of the companies which are maintains the strategic business units. It also helps in improving the overall performance level of the business units as it promotes the synergies and also the overall core competencies.

It can be seen that synergies and core competencies can be promoted and it also enhances the overall competitive advantages. The method related to synergy is that the overall results of the units can be considered as the inputs to the other units also. Also the companies easily pool the markets and expertise and these relations reduce the cost and create profits. In applying the synergy to the situations, the information system can be considered with the overall operations of the disparate units of the business so that they can be maintained as the whole (Pearlson, Saunders and Galletta, 2016).

The core competency is considered as the activity for which the organizations are known as the world class leader. Also, the core competency focuses on the knowledge that is achieved from the years of experience and also it simply the people who are related to the new external knowledge.  The information system can also encourage the sharing of the knowledge across the various business units which also increases the overall competency.

Also, in a network the marginal costs of adding the other participants can be considered as Zero but the marginal gain can be large. The large number of participants in the network, it can be seen that the greater value to the all participants as the users can easily interact with many people (Chang, 2016).

The availability of proper technology has also focused on the strategies that can be considered for the benefits of the company to maintain the network with each other. In the network economy, the information system also facilitates the business models which are related to the big connections of the customers or the subscribers that take the benefit of the network economies. The internet sites can also be considered by the companies to create the communities of the customers that can give the outcome in enhancing the customer loyalty and enjoyment. It can also build the different connections to the customers, suppliers and also the partners of business (Porter and Heppelmann, 2014).

It can be seen that virtual company considers the networks to connect with the people; assets and ideas and which helps to align to the different organizations maintain and distribute the products and services by not focusing on the traditional boundaries of the organization.  It can be stated that one organization considers the overall potential of the next companies by not connecting with it physically to the other company. Model of virtual company can be used when the organization searches it in less to attain the products, services or the capabilities from the vendors.  Also it is necessary to emphasize on the new market opportunities can be analyzed and it also lacks to the time and resources which is important to be responded easily (Kim, 2015).

So, it can be concluded that information systems can help in promoting the synergies and also the core competencies. It also helps in boosting the overall competencies through which success can be achieved easily in the competitive advantage.

Therefore, by analyzing the paper it can be concluded that these factors which are competitive forces, value chain and value web can help the company to attain the competitive advantage. Through this it can also be easy to manage the overall process of techniques and tools which is necessary for the development of the information system to maintain the competitive advantage. So, these strategic tools can help the companies to achieve success.

References

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