Microeconomic of CompetitivenessCH3 : HOW INFORMATION GIVES YOU COMPETITIVE ADVANTAGE

2

Strategic Significance

Value chain with information technology for “Competitive advantage”

Convergent and linkage of technology that process the information.

Transforming the Value Chain

Transforming the Product

Direction and Pace of Change

3Example – Candy Manufacturer with JIT

J I T

4Information Technology in Value Chain

Planning model

Automated Personal Scheduling

CAD, Electronic Market Research

Online Procurement Part

Automated warehouse

FlexibleManufacturing

AutomatedOrder Processing

Telemarketing

Remote terminal for sale person

Remote Servicing of Equipment

Usage of Information Technology in Value Chain

5

Transforming the Product

Offer product information than physical component

6

Direction and Pace of change

Information content of Product Vs. Value Chain

Low

High

Low High

Value Chain

Product

7

Changing Nature of Competition

• Changing Industry Structure

• Creating Competitive Advantage

• Spawning New Business

8

Changing Industry Structure

IT can improving or eroding the attractiveness of industry

Information Technology Unfreezing Industry and Create New

needs

9

Creating Competitive Advantage

Lowering Cost, Enhancing differentiation, and changing competitive scope

Lowering cost Differentiation Competitive Scope

Flexible Differentiation Differentiation

10

Spawning New Business

11Competing in the Age of Information Technology

Assessment

Determine

create competitive advantage

Spawn new business

Develop Plan

12

13

Group 3

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