Please summarize the below so it can become easy to understand and memorize for exam purposes. The below answer belongs to this question (Write a short note on how Porter's Five Forces have impacted IT). The answer to summarize: Technology and its Impact on the 5 Forces 1. Competition in the industry This is the force of the competitors. This force is used to describe the number of rivals in the market and their potential to dominate the company. If the competitors are high in number and are equivalent in products, organizations need to create competitive prices and provide far better deals to the consumers and suppliers than their competitors—for example, the FMCG industry. On the other hand, the market is small and poor; the company has the upper hand and can charge more costs and make offers that benefit them—for example, the automobile industry. In both these situations, organizations are heavily dependent on the statistical and analytical tools for the proper analysis of the competition in the industry and understand the proper competitive pricing for their goods or services. 2. Potential of new entrants into the industry A market that has strict entry barriers is perfect for existing firms in that industry. This is because the organization will have higher pricing and greater profitability, such as the diamond industry. On the opposite, if newcomers can easily join the industry, it costs rivals lesser time and money to enter the market and deal with the incumbent organizations. In this case, the strength and power of the organization are reduced and/or weakened. There are many barriers to entry that are established by the government or are created by the organizations. Technology plays an important role in organizational barriers. One of the most difficult industries to enter is the social media industry. This industry is heavily dependent on technological upgrades and the smooth functionality of the sites created. This is why many social media applications do not take off and fail. Similarly, the soft drinks industry is a stringent industry due to the heavy branding created in users' minds. This is done by employing various technological tools that help understand the analytics of consumer response to each marketing effort. 3. Power of suppliers If an industry has many suppliers, then the suppliers do not hold much power as there are various other alternatives available. If an industry has a lower number of suppliers, then the suppliers hold power and can create agreements with organizations that are more beneficial to the suppliers and lower the profitability of the organizations. Technological advancements have made it such that, in some cases, they have reduced the need for dependence on suppliers as the work done by the suppliers can be done cost-effectively by the organization. One of the main reasons suppliers exist is that they can reduce costs; however, technology has made it such that new machinery and tools can reduce the cost and eliminate the need for suppliers. 4. Power of customers Customer force is one of the most impactful forces for an organization. This is because an organization's production and profitability are completely responsive to consumer demand. If an organization has a smaller group of consumers as its main target consumer, the consumer has more power and can influence the prices and deals. Satisfied consumers mean profitability and loyalty for the organization. Information technology has enhanced the satisfaction of consumers by providing them with a platform to share and answer their grievances about the product that is the customer service. Further, online shopping has been a great benefit for maintaining happy consumers. This is because it has bought them ease in shopping and reduces time and effort, making them more susceptible to shop more online. 5. The threat of substitute products The last forces that affect the organization are substitutes. Substitute goods or services that can be used instead of an organization's products or services threaten the organization. An organization that manufactures goods or services that do not have any close alternatives definitely has more leverage to increase the prices and profitability and lock in better terms of sale. Customers have the power and the ability to refuse the purchase of an organization's products or services if close replacements are readily and easily available. This will lead to weakened organizational power. Information Technology comes into play by developing advancements and tools that make the product more attractive to the consumers. One of the best examples is the smartphone industry. There are thousands of close alternatives available to the consumers, and technological advancements are the only reason one brand stands above the other brand.

Please summarize the below so it can become easy to understand and memorize for exam purposes. The below answer belongs to this question (Write a short note on how Porter's Five Forces have impacted IT). The answer to summarize: Technology and its Impact on the 5 Forces 1. Competition in the industry This is the force of the competitors. This force is used to describe the number of rivals in the market and their potential to dominate the company. If the competitors are high in number and are equivalent in products, organizations need to create competitive prices and provide far better deals to the consumers and suppliers than their competitors—for example, the FMCG industry. On the other hand, the market is small and poor; the company has the upper hand and can charge more costs and make offers that benefit them—for example, the automobile industry. In both these situations, organizations are heavily dependent on the statistical and analytical tools for the proper analysis of the competition in the industry and understand the proper competitive pricing for their goods or services. 2. Potential of new entrants into the industry A market that has strict entry barriers is perfect for existing firms in that industry. This is because the organization will have higher pricing and greater profitability, such as the diamond industry. On the opposite, if newcomers can easily join the industry, it costs rivals lesser time and money to enter the market and deal with the incumbent organizations. In this case, the strength and power of the organization are reduced and/or weakened. There are many barriers to entry that are established by the government or are created by the organizations. Technology plays an important role in organizational barriers. One of the most difficult industries to enter is the social media industry. This industry is heavily dependent on technological upgrades and the smooth functionality of the sites created. This is why many social media applications do not take off and fail. Similarly, the soft drinks industry is a stringent industry due to the heavy branding created in users' minds. This is done by employing various technological tools that help understand the analytics of consumer response to each marketing effort. 3. Power of suppliers If an industry has many suppliers, then the suppliers do not hold much power as there are various other alternatives available. If an industry has a lower number of suppliers, then the suppliers hold power and can create agreements with organizations that are more beneficial to the suppliers and lower the profitability of the organizations. Technological advancements have made it such that, in some cases, they have reduced the need for dependence on suppliers as the work done by the suppliers can be done cost-effectively by the organization. One of the main reasons suppliers exist is that they can reduce costs; however, technology has made it such that new machinery and tools can reduce the cost and eliminate the need for suppliers. 4. Power of customers Customer force is one of the most impactful forces for an organization. This is because an organization's production and profitability are completely responsive to consumer demand. If an organization has a smaller group of consumers as its main target consumer, the consumer has more power and can influence the prices and deals. Satisfied consumers mean profitability and loyalty for the organization. Information technology has enhanced the satisfaction of consumers by providing them with a platform to share and answer their grievances about the product that is the customer service. Further, online shopping has been a great benefit for maintaining happy consumers. This is because it has bought them ease in shopping and reduces time and effort, making them more susceptible to shop more online. 5. The threat of substitute products The last forces that affect the organization are substitutes. Substitute goods or services that can be used instead of an organization's products or services threaten the organization. An organization that manufactures goods or services that do not have any close alternatives definitely has more leverage to increase the prices and profitability and lock in better terms of sale. Customers have the power and the ability to refuse the purchase of an organization's products or services if close replacements are readily and easily available. This will lead to weakened organizational power. Information Technology comes into play by developing advancements and tools that make the product more attractive to the consumers. One of the best examples is the smartphone industry. There are thousands of close alternatives available to the consumers, and technological advancements are the only reason one brand stands above the other brand.

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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The answer to summarize:

Technology and its Impact on the 5 Forces

1. Competition in the industry

This is the force of the competitors. This force is used to describe the number of rivals in the market and their potential to dominate the company.
If the competitors are high in number and are equivalent in products, organizations need to create competitive prices and provide far better deals to the consumers and suppliers than their competitors—for example, the FMCG industry.
On the other hand, the market is small and poor; the company has the upper hand and can charge more costs and make offers that benefit them—for example, the automobile industry.
In both these situations, organizations are heavily dependent on the statistical and analytical tools for the proper analysis of the competition in the industry and understand the proper competitive pricing for their goods or services.

2. Potential of new entrants into the industry

A market that has strict entry barriers is perfect for existing firms in that industry. This is because the organization will have higher pricing and greater profitability, such as the diamond industry.
On the opposite, if newcomers can easily join the industry, it costs rivals lesser time and money to enter the market and deal with the incumbent organizations. In this case, the strength and power of the organization are reduced and/or weakened.
There are many barriers to entry that are established by the government or are created by the organizations. Technology plays an important role in organizational barriers.
One of the most difficult industries to enter is the social media industry. This industry is heavily dependent on technological upgrades and the smooth functionality of the sites created. This is why many social media applications do not take off and fail.
Similarly, the soft drinks industry is a stringent industry due to the heavy branding created in users' minds. This is done by employing various technological tools that help understand the analytics of consumer response to each marketing effort.

3. Power of suppliers

- If an industry has many suppliers, then the suppliers do not hold much power as there are various other alternatives available.
- If an industry has a lower number of suppliers, then the suppliers hold power and can create agreements with organizations that are more beneficial to the suppliers and lower the profitability of the organizations.
- Technological advancements have made it such that, in some cases, they have reduced the need for dependence on suppliers as the work done by the suppliers can be done cost-effectively by the organization. One of the main reasons suppliers exist is that they can reduce costs; however, technology has made it such that new machinery and tools can reduce the cost and eliminate the need for suppliers.

4. Power of customers

Customer force is one of the most impactful forces for an organization. This is because an organization's production and profitability are completely responsive to consumer demand.
If an organization has a smaller group of consumers as its main target consumer, the consumer has more power and can influence the prices and deals.
Satisfied consumers mean profitability and loyalty for the organization. Information technology has enhanced the satisfaction of consumers by providing them with a platform to share and answer their grievances about the product that is the customer service.
Further, online shopping has been a great benefit for maintaining happy consumers. This is because it has bought them ease in shopping and reduces time and effort, making them more susceptible to shop more online.

5. The threat of substitute products

The last forces that affect the organization are substitutes. Substitute goods or services that can be used instead of an organization's products or services threaten the organization.
An organization that manufactures goods or services that do not have any close alternatives definitely has more leverage to increase the prices and profitability and lock in better terms of sale.
Customers have the power and the ability to refuse the purchase of an organization's products or services if close replacements are readily and easily available. This will lead to weakened organizational power.
Information Technology comes into play by developing advancements and tools that make the product more attractive to the consumers. One of the best examples is the smartphone industry. There are thousands of close alternatives available to the consumers, and technological advancements are the only reason one brand stands above the other brand.

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