Competitive advantage

1. Presenter: Kyaw Zay Ya
Instructor: Prof. I-Tung Shih
Information Revolution
Chapter 3
Michael E. Porter
Victor E. Millar

2. • sweeping through the company
• no company can escape its effects
Why information
revolution?
.
1
• How will advances in information technology affect competition and the sources of
competitive advantage?
.
2
• What strategies should a company pursue to exploit the technology?
.
3
• What are the implications of actions that competitors may already have taken?

3. Information revolution => three vital ways
spawns
whole new
businesses
creates
competitive
advantage
Industry
structure
alters the rules
of competition
new ways to
outperform their
rivals
often existing
operations

4. Value Chain Model (Porter 1985)
Technologically
Economically
value activities
a lower cost => differentiation and a premium price (more value)
Linkages
trade-offs
expensive raw
materials
smoothly together
powerful source
Upstream
Downstream

5. Value System
Just-in-time
deliveries
logistics and order processing
customers
Information
Faster
than
physical

6. Information flow
-affects all nine
categories
-exploit linkages
between activities
-coordinate
actions more
closely
Information flow
-From computer
aid to warehouse Information flow
-substitutes
machines for
human effort
-Paper ledgers >
computer
Real-time information
Flexibility
Agility
Just-in-time
performance
Customer satisfaction,
etc.

7. Information Intensity Matrix
• importance of the technology
differs
• Banking and insurance- first and
most enthusiastic users of data
processing
• Cement-physical processing

8. Changing the Nature of Competition
three ways
• industry structure-
• create competitive advantage-
• Complete new businesses
Buyers use their
personal computers
to browse
Electronic data bases

9. Competitive Advantages
The low-cost copier assembly process
Salespeople-telemarketer
Lowering
Cost
Enhancing
Differentiation
Sulzer Brothers-five to eight no. cylinder bore sizes Unlock geographic scope
interrelationships

10. Competing in the Age of Information
• 1. Assess information intensity
• 2. Determine the role of information technology in industry structure.
• 3. Identify and rank the ways in which information technology might
create a competitive advantage.
• 4. Investigate how information technology might spawn new
businesses.

11. ………………..THANKS………………….