ITEC N453 – Information

Technology Practices

201220 - Week 04 - Lecture 01&02• Porter’s Competitive Forces Model• Disruptive Technologies• Case Study: Is the iPAD a Disruptive Technology?

Porter’s Competitive Forces Model

In Porter’s competitive forces model, the strategic position of the firm and its strategies are determined not only by competition with its traditional direct competitors but also by four other forces in the industry’s environment: new market entrants, substitute products, customers, and suppliers.

Management Information Systems

• Traditional competitors• All firms share market space with competitors who are

continuously devising new products, services, efficiencies, switching costs

• New market entrants • Some industries have high barriers to entry, e.g.

computer chip business• New companies have new equipment, younger

workers, but little brand recognition

Using Information Systems to Achieve Competitive Advantage

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Porter’s Competitive Forces Model

Management Information Systems

• Substitute products and services• Substitutes customers might use if your prices become

too high, e.g. iTunes substitutes for CDs

• Customers • Can customers easily switch to competitor’s products?

Can they force businesses to compete on price alone in transparent marketplace?

• Suppliers• Market power of suppliers when firm cannot raise

prices as fast as suppliers

Using Information Systems to Achieve Competitive Advantage

© Pearson Education 20124

Porter’s Competitive Forces Model

What can be the Substitute Products & Services for these?• Car Fuel (Oil)?

• Traditional telephones?

• DVD Movies?

Disruptive Technologies

•Disruptive technologies• Technology that brings about sweeping change to businesses, industries, markets• Examples: personal computers, word processing software, the Internet, the PageRank algorithm• First movers and fast followers• First movers – inventors of disruptive technologies• Fast followers – firms with the size and resources to capitalize on that technology

Online Activity – First Movers & First Followers• Who is the First Mover of the PageRank Algorithm?

• Who is the Fast Follower of the PageRank Algorithm?

• Who else can benefit from the PageRank Algorithm?

Case Study: Is the iPAD a Disruptive Technology?

1. Evaluate the impact of the iPad using Porter’s competitive forces model

1. Who are the Competitors?2. Who are the New Market Entrants?3. What can be Substitute Products?4. What can make Customers leave iPADs?5. Who are the Suppliers?

2. What makes the iPad a disruptive technology? Who are likely to be the winners and losers if the iPad becomes a hit? Why?

Case Study: Is the iPAD a Disruptive Technology?

Visit Apple’s site for the iPad and the Amazon.com site for the Kindle. Review the features and specifications of each device. Then answer the following questions:1. How powerful is the iPad? How useful is it for

reading books, newspapers or magazines, for surfing the Web, and for watching video? Can you identify any shortcomings of the device?

2. Compare the capabilities of the Kindle to the iPad. Which is a better device for reading books? Explain your answer

Case Study: Is the iPAD a Disruptive Technology?

Visit Apple’s site for the iPad and the Amazon.com site for the Kindle. Review the features and specifications of each device. Then answer the following questions:3. Would you like to use an iPad or Kindle for the

books you use in your college courses or read for pleasure instead of traditional print publications? Why or why not?

End of Lecture