It for Toyota

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Porter’s Models of Toyota
UNIVERSITY OF LA VERNE
La Verne, California

Bus 510 Management of Information Technology
Professor Nicole Lytle

Yuxi Deng
Jialin Dong
Binfeng Chen
Ao Wang

11/16/2012
Table of Contents
Summary of Porter’s Models Article.3
Porter's Five Forces Model Analysis4
Bargaining Power of Buyers4
Bargaining Power of Suppliers6
Threat of Substitute Products7
Threat of New Entrants7
Rivalry among Existing Competitors8
The Three Generic Strategies9
The Value Chain Analysis10
References .12

Summary of Porter’s Models Article
As the whole world relies heavily on information systems, it has become one of the most efficient ways for all business corporations to gain business opportunities and wealth. All the companies are facing the impact of the information revolution not only on the product properties, processes, company nature, and industries, but also on competition itself. Companies will able to collect a vast amount of information to store on a computerized database. That information will support companies extrapolate information about their buying trends and behaviors and their preferences. It also will help companies with making their business strategies, improving their processing, and gaining more market shares from their competitors. Strategy Significant

IT effects the whole operation by which companies create their products such as their package of physical goods, services, and delivery. IT also changes the enterprise's performance through the value chain system which is a combination of many technologic and economical activities which are interdependent. The higher the value, the higher opportunity a buyer is willing to purchase that product or service. As a successful business requires that the value it creates exceeds the cost of performing the value activities. (Porter, M. E., & Millar, V. E.2001) The new information also will help corporations be aware of the market trends, customer expectations, and competitors from the industries. Meanwhile it supports enterprises to supply in a larger geographic scope than before as well as a broader scope of industries. As the importance and the great impact from IT, it is necessary for CEOs and managers to take advantage from how IT impacts the value chain, so that it will help companies improve in the original industries; also it will bring new opportunities from the new field.

Changing the Nature of Competition
IT is rapidly changing the nature of competition among businesses. There are three effects which are critical for understanding the impact of IT on different industries, such as changing industry structure, creating competitive advantage, and spawning new business. First of all, IT impacts industry structure through changing the five forces which includes buyer power, supplier power, and substitution. Secondly, companies can create competitive advantage by using information. Finally, companies create new products and improve old products to keep business through using new information. Competing in the Age of Information

IT provides benefits to companies, and there are five steps show companies how to take advantage of opportunities from the information revolution. Assessing information intensity, determining the role of IT in industry structure, and identify and rank will be the three important steps for corporations competing in the age of information. Investigating in new business and creating a new plan are the final two steps. (Porter, M. E., & Millar, V. E.2001) Porter's Five Forces Model Analysis

Bargaining Power of Buyers
In the U.S. market, the bargaining power of buyers is moderately high in Toyota for several reasons. First, unlike the past, today’s consumers have lots of channels to acquire information, such as the internet, telephone counseling, direct mail, and so on, where information availability is high. The development of information technology increases information...
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