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Information technology

The strategic context
Strategic capabilities

1.1 The impact on strategic planning

In the modern environment IT plays a role at all stages of the strategic planning
process.

For example,

 Strategic analysis: IT can help create business strengths or overcome existing
weaknesses

 Strategic choice: IT can help create a competitive advantage or give access to
new markets

 Strategic implementation: we’ve already seen how IT plays a role in BPR, for
example.

Therefore we should consider IT at all stages of the syllabus. For example, we
should incorporate IT influences within the PESTEL, 5 Forces, value chain etc.

1.2 Industry impact

Porter suggests 3 ways IS/IT can affect industries

 New businesses might become possible. For example, auction sites and photo-
album sites.

 The industry structure can be changed. For example, in the book industry it can
be argued that the large book publishers have less power because books can
be self-published on the internet.

 IS/IT can provide an organisation with competitive advantage by providing new
ways of operating. For example, supermarkets have been able to greatly reduce
purchasing costs by linking IT systems with those of suppliers (this is known as
e-procurement).

Illustrations and further practice

Now read illustration 1 and try TYU question 1.

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