IT and Porter’s Competitive Forces Model and Strategies

Abstract

Information Technology (IT) has revolutionized our economy and noorganization can escape its impact. Using IT, new business models arebeing developed which could not be thought of earlier. As IT makesinroads into every aspect of organization, it is clear that strategiescan be successful and have the competitive edge if they are integratedwith IT. This is primarily because there have been reduction ofoperative cost and increase in productivity through technology adoption.As a result. IT cannot remain exclusive territory of IT/Electronic DataProcessing/Computer department. Business managers now see the need toget directly involved in IT investment decisions and integration of ITwith business processes and managing technological trends. MichaelPorter's theory of five forces, which defines the framework forformulating strategies through five forces, has to be integrated withtechnological capabilities of a firm to maintain competitive advantage.To make these integrations happen, managers need to understand IT in aholistic manner which will integrate business with IT. This chapteraddresses the role of technology on the organizations' strategies, howthese five forces that Porter described are impacted by technology andhow managers should plan to cope with the changing times withtechnology.