Trident University International
Module 2 Case
ITM524: Foundations of Information Technology Management
Dr. Mina Richards
We live in an environment which changes often. In the business world, what is in demand today for an organization may not be a requirement for tomorrow. Smart managers know that organizations that succeed do so because they adjust to keep up with the changes that are taking place (Harmon, 2007). Change in business comes in many forms and affects companies in every industry. Business today is one of the dominant institutions in society. Businesses are established with the sole purpose to provide a product or service to a customer with the intent to make a profit. Once established, every company wants to improve the way it does business to produce things more efficiently and to make a greater profit. Every manager understands that achieving these goals are part of his or her job. For the business they must create a strategic vision for long term sustainability. By adopting sustainable practices, companies can gain a competitive edge, increase their market share, and boost shareholder value. This paper will identify as points of discussion the value chain and competitive forces in Porter’s model based on ‘The Mini-cases: 5 companies, 5 strategies, 5 transformations article and cases; and the affects did Information Technology have on the sustainability on those five organizations. Case Background
1. Identify the value chain and competitive forces in Porter’s model. Based on “The Mini-cases: 5 companies, 5 strategies, 5 transformations” article and cases. 2. What effect did IT have on the value chain and competitive forces of those organizations? 3. What are some of the changes to the value chain and competitive forces when an organization responds to sustainability?
Value Chain Analysis
Early as 1979, Michael Eugene Porter introduced the concept of the value chain analysis. A value chain analysis allows a firm to understand the parts of its operations that create value and those that do not (Ketchen & Hult, 2007). Understanding these issues is very important because the firm earns above average returns only when the value it creates is greater than the costs incurred to create that value (Porter, 1985). The value chain is a template that a firm uses to understand their cost position and to identify the multiple means that might be used to facilitate implementation of a chosen business-level strategy (Alcancer, 2006). The value chain shows how a product moves from the raw material stage to the final customer. A firm value chain is segmented into primary and support activities. Primary activities involves with a product’s physical creation, its sale and distribution to buyers, and its service after the sale. The primary activities include five generic categories which are comprise in competition in any industry covering inbound logistics, operations, outbound logistics, marketing and sales and services (Porter, 1985). Support activities provide the assistance necessary for the primary activities to take place, which are firm infrastructure, human resource management, technology development, and procurement (Porter, 1985). Competitive Advantage Concept
From the activities done in a business or in its supply chain, a firm has a competitive advantage when it implements a strategy competitors are unable to duplicate or find too costly to try to imitate (Barney & Clark, 2007). As Michael Porter comments, “Strategic fit among many activities is fundamental not only to competitive advantage but also to the sustainability of that advantage. It is harder for a rival to match an array of interlocked activities than it is merely to imitate a particular sale-force approach, match a process technology, or replicate a set of product features. Positions built on systems of activities are far more sustainable than those built on individual activities”...
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