UB University of Baltimore
Merrick School of Business

INSS737 - Management of Information Systems - Fall 2000

Effects of IT on Competition

Lecture notes

One of the manageable trends we saw last class meeting was the strategic impact of IST. Today we are taking a closer look at the effects of IT on competition.

  1. Industry and Competitive analysis (ICA) framework.
  2. You should have been introduced to this topic in either INSS610 or INSS640. Lets take a look at each of the competitive forces and how can IST contribute to gain competitive advantages:

    More details on the above forces can can be found in pages 61-76 of the textbook.

  3. Competitive strategies
  4. The classical Porter ICA framework discussed above also describes three generic strategies: (a) cost leadership (low cost producer), (b) differentiation (high quality) and (c) focus (niche). This is reflected in figure 1. Lets review this scenario taking into consideration process and product changes:

    Boynton, A.C., Victor, B. and Pine, B.J (New Competitive Strategies: Challenges to Organization and Information Technology, IBM Systems Journal,(32)1,1993, 40-52) proposed a much broader framework for competitive strategies, as shown in figure 2.

    This was a time when american businesses were being confronted with fierce competition of japanese and european firms, which were able to provide high quality and low cost products and services. Lets review what this new model added:

Case instructions

We will use the framework to analyze the case introduced last week: (a) what is the problem, (b) what are the alternatives, and (c) what are the recommendations. We will discuss Canadia Airlines (A) using this framework.

When you analyze this case ask yourself how the ICA and Mass Customization frameworks affect the situation. What is the existing competitive situation? What significant issues are the airlines facing? Which, if any, is the role of the reservation systems? What are the strengths and weaknesses of each reservation system?

Think about the various strategies and competition forces. Then answer the questions:

  1. What is the problem?

    Why is it a problem? Is there a decision involved? If it is a problem, what are the pros and cons that makes it a problem?

  2. What are the alternatives?

    What can be done? There is always the do nothing alternative. If everything went well (rosy scenario) what we would like to do? If everything went wrong (doomsday scenario) what should we do? What can we do in between the rosy and the doomsday scenarios? What are pros and cons of each alternative?

  3. What is you recommendation?

    What criteria should we use to select the most suitable alternative in the case? Why are you recommending one alternative versus the others? How this alternative satisfies your criteria? How to implement the alternative you selected?

As done last week, we will first discuss the case in the Forum, then in class, and then your group will post a report in the Forum.

This page is maintained by Al Bento who can be reached at abento@ubmail.ubalt.edu This page was last updated on September 13, 2000. Although we will attempt to keep this information accurate, we can not guarantee the accuracy of the information provided.