【正文】 iable even when unexpected events disrupt one or more of its businesses, markets, products, or services. Strategic planning involves environmental scanning and prediction, or SWOT analysis, for each business relative to petitors in that business’s market or product line. 65 ? Strategy defines the plan for how a business will achieve its mission, goals, and objectives. It specifies the necessary financial requirements, budgets, and resources . Strategy addresses fundamental issues such as the pany’s position in its industry, its available resources and options, and future directions. A strategy addresses questions such as: – What is the longterm direction of our business? – What is the overall plan for deploying our resources? – What tradeoffs are necessary? What resources will it need to share? – What is our position vis224。vis petitors? – How do we achieve petitive advantage over rivals in order to achieve or maximize profitability? 66 PORTER’S COMPETITIVE FORCES MODEL AND STRATEGIES ? Michael Porter’s petitive forces model, also called the fiveforces model, has been used to develop strategies for panies to identify their petitive edge. The model also demonstrates how IT can enhance petitiveness ? According to Porter’s petitive forces model, there are five major forces in an industry that affect the degree of petition and thus impact profit margins and ultimately profitability . These forces interact, so although you will read about them individually, it is their interaction that determines the industry’s profit potential. 67 ? For example, while profit margins for pizzerias may be small, the ease of entering that industry draws new entrants into it. Conversely, profit margins for delivery services may be large, but the cost of the IT to support the service is a huge barrier to entry into the market. 68 ? An explanation of the five industry (market) forces. 69 1. Threat of entry of new petitors. ? Industries with large profit margins attract more petitors (called entrants) into the market than do industries with small profit margins. It’s the same principle that applies to jobs—people are attracted to higherpaying jobs, provided that they can meet or acquire the criteria for that job. In order to gain market share, entrants typically sell at lower prices or offer some incentive. Those panies already in the industry may be forced to defend their market share by lowering prices, which reduces their profit margin . Thus, this threat puts downward pressure on profit margins by driving prices down. 70 ? This force also refers to the strength of the barriers to entry into an industry, which is how easy it is to enter an industry . The threat of entry is lower (less powerful) when existing panies have ISs that are difficult to duplicate or very expensive. ? Those ISs create barriers to entry that reduce the threat of entry. 71 2. Bargaining power of suppliers. ? Bargaining power is high where the supplier or brand is powerful。 for example, Apple, Microsoft, and auto manufacturers. Power is determined by how much a pany purchases from a supplier . The more powerful pany has the leverage to demand better prices or terms, which increase its profit margin. Conversely, suppliers with very little bargaining power tend to have small profit margins. 72 3. Bargaining power of customers or buyers . ? This force is the reverse of the bargaining power of suppliers. Examples are Dell Computers , Walmart , and governments. This force is high where there a few large customers or buyers in a market. 4. Threat of substitute products or services . ? Where there is productforproduct substitution, such as for fax, there is downward pressure on prices. As the threat of substitutes increases, profit margin decreases because sellers need to keep prices petitively low. 73 5. Competitive rivalry among existing firms in the industry. ? Fierce petition involves expensive advertising and promotions, intense investments in research and development (RD), or other efforts that cut into profit margins . This force is most likely to be high when entry barriers are low, threat of substitute products is high, and suppliers and buyers in the market attempt to control. That’s why this force is placed in the center of the model. 74 ? The strength of each force is determined by the industry’s structure. Existing panies in an industry need to protect themselves against the forces . Alternatively , they can take advantage of the forces to improve their position or to challenge industry leaders. ? Companies can identify the forces that influence petitive advantage in their marketplace and then develop a strategy. Porter proposed three types of strategies—cost leadership, differentiation, and niche strategies. 75 ? In Table , Porter’s three classical strategies are listed first, followed by a list of nine other general strategies for dealing with petitive advantage. Each of these strategies can be enhanced by IT, as will be shown throughout the book. 76 ? PORTER’ S VALUE CHAIN MODEL 77 ? According to Porter’s value chain model, the activities conducted in any manufacturing anization can be divided into two parts: primary activities and support activities. ? Primary activities are those business activities through which a pany produces goods, thus creating value for which customers are willing to pay. Primary activities involve the purchase of materials, the processing of materials into products, and delivery of products to customers . Typically, there are five primary activities: 1. Inbound logistics (ining raw materials and other inputs) 2. Operations (manufacturing and testing) 3. Outbound logistics (packaging, storage, and distribution) 4. Marketing and sales (to