Explain information technology’s role in business and describe how you measure success?
Global businesses use technology and information systems to increase their profitability, gain market share, improve their customer service, and manage their daily operations. Information systems provide the foundation for business.
List and describe each of the forces in Porter’s Five Forces Model
1. The threat of entry of new competitors
The threat of new competitor entry is high when it is easy to enter your market and low when significant barriers to entry exist. An entry barrier is a product or service feature that customers have learned to expect from organisations in a certain industry. This feature must be offered by a competing organisation for it to survive in the marketplace.
2. The bargaining power of suppliers
Supplier power is high when buyers have a few choices from who to buy and low when buyers have many choices. Therefore, organisations would rather have more potential suppliers to be able to better negotiate price, quality and delivery terms.
3. The bargaining power of customers (buyers)
Buyer power is high when buyers have many choices from whom to buy and low when buyers have few choices.
4. The threat of substitute products or services
If there are many substitutes for an organisations product or services, then the threat of substitutes is high. If there are few substitutes then the threat is low. Today new technologies create substitute products very rapidly.
5. The rivalry among existing firms in the industry
The threat from rivalry is high when there is intense competition among many firms in an industry. The threat is low when the competition is among fewer firms and is not as intense.
The Five Competitive Forces That Shape Strategy
An Interview with Michael E. Porter, Professor, Harvard University. Porter's five competitive forces is the basis for much of modern business strategy. Understand the framework and how to put it into practice.
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