Information technology is transforming competition by changing industry structures, creating competitive advantages, and spawning new businesses. IT permeates organizations' value chains at every point, automating and linking activities. It enhances product quality by increasing information content. IT lowers costs and enables customization for differentiation advantages. New industries emerge from opportunities created by IT, and new businesses form within existing industries. To compete, managers must assess their industry's information intensity, predict IT's impacts, and develop plans to leverage IT for advantages.

1. How information gives
you competitive
advantage
Presented by :
sandeep Gunjan
Abhinabh Shikhar
Rishabh Jain
Sidhant Serawat 1

2. Introduction
Information revolution
 It changes industry structure and therefore the rule of
competition
 it creates competitive advantage by giving companies
new way to outperform their rivals
It spawns whole new businesses
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3. Discussion
Why IT has acquired significance and how it is affecting
all business
How the new technology changes the nature of
competition
Outline a procedure that managers can use to assess
the role of IT in their business
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4. Strategic Significance
Value chain
An important concept that highlights the role of information technology in
competition is the “value chain”.
Firm Support of entire value chain eg: planning, financing,
infrastructure accounting, QM
Human resource
management Recruiting, Hiring, Training & Development
Technology
development Improving product & manufacturing process
Procurement Purchasing unit
Inbound Operations Outbound Marketing Service
logistics logistics and sales Margin
Material Transferring Storing and Sales To
receiving, sto input into maintain
Distributing &
ring & finished and 4
distributing to goods products Promotion enhance
manufacturin the
g premises prodcut

5. Strategic Significance (cont.)
Transforming the value chain
• It generates more data about activities and products .
Information that was not available before . There is a higher
information content now
• It enhance the linkage between both inside and outside the
company
• It allows companies to coordinates activities in widely
dispersed geographical location
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6. Transforming value chain
Information technology is permeating the value chain at every point,
transforming the way value activities are performed and the nature of the
linkages among them.
Firm Creating Planning models & linkage
infrastructure
Human resource Online Hiring & training.
management
Technology Computer-aided design Electronic market research
development
Procurement On-line procurement of parts
Support Automated Flexible Automated Telemarketing Remote Margin
warehouse manufacturing order servicing of
activities Remote
equipment
processing terminals for
salespersons Computer
scheduling
Inbound Operations Outbound Marketing Service
logistics logistics and sales
Primary activities
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7. Strategic Significance (cont.)
Transforming Product
It give power to enhance the quality of current product and services
Product & services Past Present
= Physical component Physical component > Physical component <
+
Product drive information Product drive
information
information
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8. Changing the nature of competition
Information technology is changing the rules
of competition in three ways:
• Changing industry structure
• Creating competitive advantage
• Spawning new businesses
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9. Changing the nature of competition
Changing industry structure
System to connect Threat of new
buyer and supplier entrance
Bargaining power
of suppliers Rivalry among
existing
competitors Bargaining power
of buyers
Automated Quotes
Threat of substitute For easier comparison
product or services
CAD makes it easier
To product offering
Five competitive forces 9

10. Changing the nature of competition
Changing the nature of competition
Competitive Advantage
Cost advantage Differentiation advantage
Cost lowering:
wide set information provides opportunity to reduce excessive
expense at any part of value chain
Enhancing differentiation:
IT make it possible to customize the product.
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IT basically helps in redefining the relationship between competitive
scope and advantage

11. Changing the nature of competition
Spawning new business
The information revolution is giving birth to completely new
industries in three distinct ways:
1. IT makes new businesses technologically feasible.
2. IT can also spawn new businesses by creating derived
demand for new products.
3. IT creates new businesses within old ones.
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12. Competing in the age of information
Following steps are required:
• Assess information intensity
• evaluate on the basis of value chain or product.
• Predict the impact of IT
• Identify and rank the way in which IT might create competitive
advantage
• To investigate how it might spawn new business
• Develop a plan to take advantage
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13. Thank you
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