Porter’s competitive model that resonate around five central points that a strategic business needs to consider in securing its place in the market may not have envisioned the use of information technology during its inception. Indeed, a clear analysis of the original position by Michael Porter reveals no correlation or relationship with information technology. However, Porter threw his analysis into the market in an inquisitive way that leaves the room open for business analysts to seek to address the situation in any way. One of the option is to integrate the systems with a modern information technology in a way that maximizes on the business strengths and opportunities while minimizing the business weaknesses and threats. This paper is then charged with the discussion of how companies can employ the Porter’s competitive model to develop a strategy using the information systems. It is the contention that to obtain positive results in the competitive field of business, companies must integrate their synergies together and mitigate their weaknesses. Information systems have been recognised for their comprehensive and analytical approach to business that enables the conclusion of strategies in an informed and organized manner.
One needs to consider the elements of Porter’s competitive model before seeking to reconcile the same to the business strategy and information systems application. According to Porter, a company or business unit for that matter, needs to consider five essential factors. These factors are the threat of potential entrants, the threat of substitutes in terms of either or both services and products, the bargaining power of suppliers, buyers and finally the potential rivalry among current competitors in the same market. These factors combine to give a result that would favour or disfavour a business unit. It remains fundamentally important for businesses to position themselves in a manner as to mitigate the threats through a maximization on its own strengths relative to the five forces. This onus discharged on the management requires analytics, forecasting and comprehensive information manipulation to the advantage of the business. It is this responsibility that needs the inclusion of information systems.
Information systems refer to a set of information mechanisms compromised of hardware, software and live-ware that together inform the information of the business. The hardware entails the devices in use by the business. This includes items like computers, simulating machines, among others. Software entails the applications that run the computers and by extension the hardware. The software is important in that it determines the competencies and effectiveness of the hardware. Lastly, live-ware entail the human personnel that design, run and execute the instructions that facilitate data and information processes by the software. Together this three components combine to form the information systems. It is noteworthy that the information systems components play a definite and clear role in relation to the final output of the overall information systems. The question thus is how these information systems can be applied in strategic business position in relation to the Porter five model in a way that gives the business a competitive advantage over its competitors. That question shall be answered through a proposed method of operation to be discussed in the next section.
The best approach is used the competencies inherent in information systems to tackle the issues arising from the Porter’s five competitive model. This involves an arrest or mitigation of the threats inherent in the competitive forces through a comprehensive system analysis while at the same time applying the opportunities in the company to advance its position in the market. The paper will briefly illustrate how this can be realistically pursued. For starters, it ought to be appreciated that a good, stable and beneficial information system is one that has in it the required capacities and strengths that enables it achieve its demands. For instance, the information system should be able to comprehensive take note of the changes in the market in relation to the five forces. It should have an embedded ability to take in the position of the competitors, the strategies they employ and the likely scenarios that would come out the situation. In addition, these systems need to be able to give forecasts, simulated models and basic likely outcomes that would be consumed by the business in their decision making.
The competitive model, therefore, suffices as a conceptual framework that guides the operation and execution of the company strategy. In addition, this formulation and the attendant execution of strategy is operationalized and guided through the information systems. What happens is that the platform that runs strategy formulation and execution is run through a comprehensive information system that blends the conceptual framework that is based on Porter’s five model. What this implies is that any variation in the five models is updated into the information system and its ultimate consequence reflected in the execution of strategy. This approach ensures an informed and comprehensive execution of business strategy. It ensures business strategy is informed and based on analysis that borders on competitive analytics, comprehensive and yet flexible to the changes in the business environment. This approach is appreciative of the dynamic nature of the business environment. It is equally cognizant of the business requirement as to modernity and technological applications.
The Porter’s competitive forces, therefore, provide the thread that knits the company business strategy while information systems operate as the needle that does the knitting. This is to say for example that strategy formulation would be cognizant of the threat of potential entrants into the market. The information system would provide the scenarios that may result out of the condition of free entry and exit into the market by other players. It would simulate various positions and these simulations would be used to make the best decision in mitigation of this threat. The simulation from the information system that maximizes the strengths of the business while minimizing the business threats would carry the day. It should be appreciated that while this singular responsibility may not justify the application of information systems, the application is premised on the fact that information systems due to their comprehensive nature would be able to integrate other complexities and dynamics that would affect this decision. For instance, in the same case of strategy formulation in cognizance of free entry by new entrants and the attendant threats thereto, the same information system would have entertained the threats posed by the already existing rivalry among market players or competitors. This information would be intertwined to the decision making process and the simulated outcomes. What results is an informed decision that is simple on the surface but appreciated for its internal complexities. Though the application of the Porter’s competitive model is practicable through the input of manual strategies, it comes out clearly that added advantages are inherent in the information systems approach. These advantages can be seen in light of the accuracy, integrated complexities and an inherent comprehensive nature.
Finally, the Porter’s five model cannot be applied in isolation. This implies that even as it informs the conception framework in strategy formulation and execution, it must be reconciled with other industrial determinants and dynamics. It must be applied in consonance with industrially accepted and tested norms. These include the integration of financial performance and evaluation, the application of risk management techniques and the integration of the economics that dictate the company’s operations, among other factors. It should be appreciated that this function needs an integrated system with multiple capacities to execute and reconcile all these dynamics. No other application can do this better in business than information systems. A comprehensive information system is able to tackle these issues and give a reconciled version of information and analysis that resonate well in terms of information synthesis and analysis.
In conclusion, therefore, it should be appreciated that the Porter’s five competitive model is a concept intended for consumption during the strategy formulation and execution. However, as it stands, a proper application needs to be adopted that applies information systems to give an informed version and set of information that enables chart the trajectory of the business towards success. Ultimately, the objective of any business often is to make profits. These profits can only be made by maximising strengths and minimizing weaknesses. The Porter’s five competitive model facilitates this process.
References
Boone, L. E., & Kurtz, D. L. (2011). Contemporary Business. New York: John Wiley & Sons.
Porter, M. E. (2008, January). The Five Competitive Forces that Shape Strategy. Havard Business Review, 78-94.
Spillan, J. E. (2009). Sustainability of Competitive Advantage. International Journal of Sustainable Strategic Management.
