1. Creating Business Advantage with IT

2. Models for Analysis Strategic Grid Analysis
Industry and Competitive Analysis

3. Competitive Forces Industry Competitors--Rivalry
Potential new entrants
Threat of substitute products/services
Bargaining power of suppliers
Bargaining power of buyers

4. Using IT to Combat Competitive Forces
Can IT be used to reengineer core value activities and change the basis of competition?
Can IT change the nature of relationships and the balance of power among buyers and suppliers?
Can IT build or reduce barriers to entry?
Can IT increase or decrease switching costs?
Can IT add value to existing products and services or create new ones?

5. Strategies for Achieving Advantage
Cost Leadership
Product/Service Differentiation
Innovation
Growth Strategies
Alliance Strategies

6. Sustainable Competitive Advantage

7. Traditional Sources of Competitive Advantage
Market features (e.g., focus on niches)
Product features (e.g., quality, differentiation)
Cost leadership
better access to physical resources
cheaper capital
economies of scale
efficiency of operations
etc.
Legal protection (e.g., tariffs, patents)

8. Competing Today
Sustainable competitive advantage is based on what competitors cannot easily copy. The source of strategy must shift from the firm’s products and markets to the firm’s “invisible assets.”
Source: H. Itami, Mobilizing Invisible Assets, HBS, 1987.

9. Invisible Assets People skills motivated, expert workers
transformational leaders
Soft Infrastructure
management practices
corporate culture
Performance History
brand image
product reputation

10. Invisible Assets (continued)
Organizational Capabilities
core competencies
renewal mechanisms
External Relationships
customer loyalty
alliances with suppliers

11. “When every firm in an industry has access to the same technology, yet some firms make more effective use of it, ... the evidence increasingly suggests that differences in management establish competitive advantage.”
[Keen & Cummins, 1994]