1. ITEC N453 – Information
Technology Practices
201220 - Week 04 - Lecture 01&02
• Porter’s Competitive Forces Model
• Disruptive Technologies
• Case Study: Is the iPAD a Disruptive Technology?

2. Porter’s Competitive Forces Model
In Porter’s competitive forces model, the strategic position of the firm and its
strategies are determined not only by competition with its traditional direct
competitors but also by four other forces in the industry’s environment:
new market entrants, substitute products, customers, and suppliers.

3. Management Information Systems
Porter’s Competitive Forces Model
Using Information Systems to Achieve Competitive Advantage
• Traditional competitors
• All firms share market space with competitors who are
continuously devising new products, services,
efficiencies, switching costs
• New market entrants
• Some industries have high barriers to entry, e.g.
computer chip business
• New companies have new equipment, younger
workers, but little brand recognition
3 © Pearson Education 2012

4. Management Information Systems
Porter’s Competitive Forces Model
Using Information Systems to Achieve Competitive Advantage
• Substitute products and services
• Substitutes customers might use if your prices become
too high, e.g. iTunes substitutes for CDs
• Customers
• Can customers easily switch to competitor’s products?
Can they force businesses to compete on price alone in
transparent marketplace?
• Suppliers
• Market power of suppliers when firm cannot raise
prices as fast as suppliers
4 © Pearson Education 2012

5. What can be the Substitute Products &
Services for these?
• Car Fuel (Oil)?
• Traditional telephones?
• DVD Movies?

6. Disruptive Technologies
• Disruptive technologies
• Technology that brings about sweeping change to
businesses, industries, markets
• Examples: personal computers, word processing
software, the Internet, the PageRank algorithm
• First movers and fast followers
• First movers – inventors of disruptive
technologies
• Fast followers – firms with the size and resources
to capitalize on that technology

7. Online Activity – First Movers & First
Followers
• Who is the First Mover of the PageRank Algorithm?
• Who is the Fast Follower of the PageRank Algorithm?
• Who else can benefit from the PageRank Algorithm?

8. Case Study: Is the iPAD a Disruptive
Technology?
1. Evaluate the impact of the iPad using Porter’s
competitive forces model
1. Who are the Competitors?
2. Who are the New Market Entrants?
3. What can be Substitute Products?
4. What can make Customers leave iPADs?
5. Who are the Suppliers?
2. What makes the iPad a disruptive technology? Who are
likely to be the winners and losers if the iPad becomes a
hit? Why?

9. Case Study: Is the iPAD a Disruptive
Technology?
Visit Apple’s site for the iPad and the Amazon.com site for
the Kindle. Review the features and specifications of each
device. Then answer the following questions:
1. How powerful is the iPad? How useful is it for reading
books, newspapers or magazines, for surfing the Web,
and for watching video? Can you identify any
shortcomings of the device?
2. Compare the capabilities of the Kindle to the iPad.
Which is a better device for reading books? Explain
your answer

10. Case Study: Is the iPAD a Disruptive
Technology?
Visit Apple’s site for the iPad and the Amazon.com site for
the Kindle. Review the features and specifications of each
device. Then answer the following questions:
3. Would you like to use an iPad or Kindle for the books
you use in your college courses or read for pleasure
instead of traditional print publications? Why or why
not?

11. End of Lecture
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