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CIS 310 Management Information Systems Competitive Strategy Porter’s 5 Force Model

CIS 310 Management Information Systems Competitive Strategy Porter’s 5 Force Model. Guthrie, Winter 2013. Competitive Strategy. Thinking comes from Michael Porter of Harvard Late 70’s developed 3 models to help us think about strategy. 5 Force Model Value Chain Generic Strategies.

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CIS 310 Management Information Systems Competitive Strategy Porter’s 5 Force Model

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  1. CIS 310 Management Information SystemsCompetitive StrategyPorter’s 5 Force Model Guthrie, Winter 2013

  2. Competitive Strategy • Thinking comes from Michael Porter of Harvard • Late 70’s developed 3 models to help us think about strategy. • 5 Force Model • Value Chain • Generic Strategies

  3. Porter’s 5 Force Model Government Regulation Threat of New Entrants Bargaining Power of Suppliers Industry Rivalry Bargaining Power of Buyers Threat of Substitute Products

  4. Entry Barriers • Creating a barrier to entry to would be competitors. • Southern California Edison • Utility, captive market • To open an electric company would require a massive infrastructure • Bar • Liquor license is a cost that might prohibit entrants • Online mega-store like Amazon • New entrants cannot compete with branding, infrastructure and supply chain

  5. Switching Costs • Switching Cost – The cost of a customer to switch to another product or service. • Used to reduce the threat of new entrants and substitute products. • Increasing Switching Costs • Deals for Staying with You (loyalty programs) • Memberships • Contracts

  6. Many Strategies to Compete • Business Fundas - http://business-fundas.com/2011/michael-porters-5-forces-model/

  7. 5 Force Model and Cell Phones Threat of New Entrants Bargaining Power of Suppliers Industry Rivalry Bargaining Power of Buyers Threat of Substitute Products

  8. Self Help Apps on Phones Threat of New Entrants Bargaining Power of Suppliers Industry Rivalry Bargaining Power of Buyers Threat of Substitute Products

  9. CIS 310 Management Information SystemsCompetitive Strategy IIThe Value Chain Guthrie, Winter 2013

  10. The Value Chain Model Enterprise Resources Planning Supply Chain Management Customer Relationship Management Graphic from Docstock.com

  11. CIS 310 Management Information SystemsCompetitive Strategy IIIGeneric Strategies Guthrie, Winter 2013

  12. Porter’s Generic Strategies • Three Generic Strategies • Differentiation: Making your products different from your competitors • Focus: Also niching. Appealing to a narrow market • Cost: Pricing yourself to appeal to a specific market

  13. Generic Strategies Samsung Galaxy Walmart Big 5 REI

  14. Strategies and Forces

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