Summary The Case – Case Study Example
Introduction Summary of Porter Article Affiliation: Introduction Summary of Porter Article The rivalry among existing business is determined by bargaining power of the traders, customers bargaining power, availability of substitute products and services and the threat of new entrant in the industry (Porter & Millar, 1985). Information technology is affecting competitive by transforming structures of the industry, production strategies and establishment of new ventures with the aim of strengthening business operations in the industry and creating value for the consumer. According to Porter & Millar, (1985) the price that buyers are ready to pay for the products and a change in producers profit margin affects the operators "competitive advantage." Manufacturers should increase the value of its products and reduce the cost of value addition than its competitors in order to remain aggressive in the market.
The value creation in a company involves primary and support activities. The primary activities entail “physical production of products, marketing and delivery to the buyers, and its support and after sales services” (Porter & Millar, 1985; 150). The support services aid primary services through providing essential input and infrastructures. Information technology is increasing opportunities available for companies to exploit and increase their activities in creating more value for the consumers and increasing business profitability. For example, through the use of mobile phones, electronic mail services, etc., companies are to responds to customer needs promptly such booking and processing of bulk orders and responding to customer needs (Porter & Millar, 1985).
Information technology has enabled companies to gather essential information that has helped them to improve their activities. Companies can collect information about market such as the operators existing in the market, new production strategies; establish new market and gathering of customer focused data that enable them to produce consumer-oriented products and services thus increasing competitiveness (Porter & Millar, 1985).
Porter, M. E. & Millar, V. E. (1985). Competitive Advantage, As Cited in Harvard Business Review (2001), How Information Gives You Competitive Advantage. EBSCOhost.