Whole Foods Five Competitive Forces

1820377 - Wiley US ©

types of IS resources needed to gain and sustain competitive advantage. These three views provide a general manager with varied perspectives from which to identify strategic opportunities to apply the firm's information resources.

Using Information Resources to Influence Competitive Forces Porter provides the general manager a classic view of the major forces that shape the competitive environment of an industry, which affects firms within the industry. These five competitive forces are shown in Figure 2.3 along with some examples of how information resources can be applied to influence each force. This view reminds the general manager that competitive forces result from more than just the actions of direct competitors. We explore each force in detail from an IS perspective.

FIGURE 2.3 Five competitive forces with potential strategic use of information resources. Sources: Adapted from M. Porter, Competitive Strategy (New York: The Free Press, 1998); Lynda M. Applegate, F. Warren McFarlan, and James L. McKenney, Corporate Information Systems Management: The Issues Facing Senior Executives, 4th ed. (Homewood, IL: Irwin, 1996).

Potential Threat of New Entrants

1820377 - Wiley US ©

Existing firms within an industry often try to reduce the threat of new entrants to the marketplace by erecting barriers to entry. New entrants seem to come out of nowhere; established firms can diversify their business models and begin to compete in the space occupied by existing firms, or an enterprising entrepreneur can create a new business that changes the game for existing firms. Barriers to entry—including a firm's controlled access to limited distribution channels, public image of a firm, unique relationships with customers, and an understanding of their industry's government regulations—help the firm create a stronghold by offering products or services that are difficult to displace in the eyes of customers based on apparently unique features. Info