Describe How Information Systems Can Influence Each Of Porter’S Five Forces Of Competitive Position Differently. Essay

715 WordsNov 3, 20093 Pages
Module Name - Information Systems in Industry Report Title – Describe how Information Systems can influence each of Porter’s Five Forces of Competitive Position differently. Word Count – 2,911 Introduction Threat of Substitute Products A substitute product can be full or partial. Full substitute products are products from different manufacturers that fulfil the exact same purpose. Partial substitutes are products that only partially substitute each other. There are also substitute sources, where the exactly the same product is sourced by two or more distributors. Porter (Porter, 1979) suggests that the presence of substitute products can lower industry attractiveness and profitability because they limit price levels. The threat of substitute products depends on buyers' willingness to substitute, the relative price and performance of substitutes and the costs of switching to substitutes (Porter, 1979). Information technology can be used to both create substitute products or services and to protect against them. Threat of entry Capital requirements Government policy and regulations Proprietary products and knowledge Access to inputs and distribution Economies of scale and other cost advantages Switching costs and brand identity Another example of information technology used to create an entry barrier for its competitors referring back to the SABRE and air travel industry. SABRE’s online computer technology improved the way in which the information was distributed, closely identified travel agents with American’s system through high switching costs and created a formidable barrier to entry for competitors (White, Steinbach, Knight & Burns, 2003). Intensity of Competitive Rivalry Currently all three credit card rivals are continuing to exploit information

More about Describe How Information Systems Can Influence Each Of Porter’S Five Forces Of Competitive Position Differently. Essay

Open Document