Value Chain and Competitive Forces Essay

1247 WordsNov 21, 20125 Pages
Value Chain and Competitive Forces: Effects of Information Technology Module 2 Case John Dow ITM524: Fundamentals of Information Technology Management Dr. Somebody Somebody February 4, 2012 Introduction Businesses are established with the sole reason to provide a product or service to a customer with the intend to make a profit. The amount of time, effort, and resources spend should generate a profit. Then, the profit depends “on its effectiveness in performing these activities efficiently, so that the amount that the customer is willing to pay of the products exceeds the cost of the activities in the value chain” (NetMBA.com). Ideally, these products and/or…show more content…
(2009). Within technology and the value system, this called for an emphasis on media relations to disseminate information to the local community and its leaders. Solid communication practices, i.e. strategic communications, was of the utmost importance to gain the respect and acceptance of the population. Perhaps by obtaining the acceptance of the local population, Rio Tinto was able to mitigate any threats from new entrants into the market at the specific location as well; allowing control of one of the five forces that shape industry competition to remain in check. Finally, helping to form the International Council on Mining and Metals should have allowed them strategic power over existing competitors (another of the 5 forces). Mini Case # 4 – General Electric General Electric’s (GE) challenge was to create a new business in sustainability. GE saw profitable business opportunity in helping companies save energy. To mitigate the ‘Rivalry among Existing Competitors’, GE’s focused on bringing new capacity and was still able to produce pressure on prices; mitigating negative price competition. As Porter mentioned: “Rivalry is especially destructive to profitability if it gravitates solely to price because price competition transfers profits directly form an industry to its customers.
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