7_competitivestrategyconcepts

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COMPETITIVE STRATEGIC

CONCEPTS

Presented by:

Dr. Alok Bansal



Competitive Strategy: The CoreConcepts

Competition is at the core of the success orfailure of firms.

A firm can survive and succeed in the longrun if it successfully develops strategies toconfront five competitive forces that shapethe structure of competition in its industry.

Competitive strategy aims to establish aprofitable and sustainable position against

the forces that determine industrycompetition.



Information System and CompetitiveStrategy

The five forces determine industryprofitability because they influence the

prices, costs, and required investment offirms in an industry -- the elements of return

on an investment.

To gain competitive and profitable positionand for the successful survival, firms useInformation System.



Competitive Strategiesbased on

Information Systems



1. Lower Cost Strategy

Use IT to reduce cost of business processes.

Use IT to Lower the cost of customer or

suppliers. Sources of cost advantage are pursuit of

economies of scale, proprietary technology,

and preferential access to raw materials.



2. Differentiate

Differentiation can be based on the

Product

Services IT features

Delivery system Marketing approach



3. Innovate

Creating new products & services thatinclude IT components.

Developing market niche with the help of IT. Changing business process with the help of

IT.



4. Promote Growth

Use IT to manage Regional & Globalbusiness expansion.

Use IT to diversify & integrate into otherproducts & services.



5. Develop Alliances

The way in which interrelationships amongbusiness units can be used to create a

competitive advantage.



6. Improve Quality and Efficiency

Use IT to dramatically improve the quality ofproduct & services.

Use IT to make continuous improvements tothe efficiency of business process.

Shorten the time needed to develop ,

produce & deliver the product & servicesusing IT.



7. Build an IT Platform

Technology is pervasive in the value chainand plays a powerful role in determining

competitive advantage, in both cost anddifferentiation.

Build a strategic base of internal & external

data using IT.



8. Other Strategies

Use Inter organization Information System tocreate switching cost that lock in customers n

suppliers. Build Entry barriers with the use of IT.

Use IT component to make substitute

product unattractive.

Help, create, share & manage business

knowledge via IT.

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THANK YOU

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a1 © Copyright Protected © Please does not circulate the above material without prior permission of Dr. Alok [email protected], 12/28/2009

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