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Strategic importance as a resource - What is the strategic potential of IT resources

Q: Porters five competitive forces model:

Potential threat of new entrants: Switch costs Access to distribution channels Economies of scale Bargaining power suppliers Selection of suppliers Threat of backward integration Bargaining power consumers Buyer selection Switching costs Differentiation Threats of substitute products Redefine products and service Improve price/performance Industry competitors Cost-effectiveness Market access Differentiation of product/service

6 important questions on Strategic importance as a resource - What is the strategic potential of IT resources

Different models can provide views on the strategic landscape:

First view: porters five competitive forces model
Second view: porters value chain
Third view: Focus on types of IS resources needed to gain a competitive advantage

Porters five competitive forces model:

Potential threat of new entrants:
- Switch costs
- Access to distribution channels
- Economies of scale
Bargaining power suppliers
- Selection of suppliers
- Threat of backward integration
Bargaining power consumers
- Buyer selection
- Switching costs
- Differentiation
Threats of substitute products
- Redefine products and service
- Improve price/performance
Industry competitors
- Cost-effectiveness
- Market access
- Differentiation of product/service

What are the dimensions in RBV?

Value creation dimensions
Value sustainability
Competitor of strategic alliances

Resources to attain CA (value creation):

 A resource is considered valuable when it enables the firm to become more efficient or effective
 A resource is rare when other firms do not possess it
 Table stakes are resources required just to be in the business (ATM’s for banks)

Resources to sustain CA (value sustainability):

 When a firm has invested in a system they often come to the conclusion that gaining a competitive advantage does not automatically mean that you can sustain it over the long term. Companies need to protect their advantages against imitation, substitution or transfers.
 Technical knowledge, especially that relates to the firm’s operation and managerial experience is less easy to obtain and considered harder to transfer to other firms

Competitor of strategic alliances:

An inter-organizational relationship that affords one or more companies in the relationship a strategic advantage. This kind of collaboration is often based on joining the specific strengths of individual partners and can thus be seen as extensions of the resources (e.g. booking a flight and automatically being invited to rent a car or hotel). Such collaboration is often based on joining the specific strengths of individual partners and can therefore be seen as an extension of the resource based view.

The question on the page originate from the summary of the following study material:

1BV20 - Business information systems management

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