3-3 How do Porter’s competitive forces model, the value chain model, synergies, core competencies, and network economics help companies develop competitive strategies using information systems?

• Define Porter’s competitive forces model and explain how it works.

• Describe what the competitive forces model explains about competitive advantage.

• List and describe four competitive strategies enabled by information systems that firms can pursue.

• Describe how information systems can support each of these competitive strategies and give examples.

• Explain how management of a firm can achieve alignment of IT with with business objectives.

• Define and describe the value chain model.

• Explain how the value chain model can be used to identify opportunities for information systems.

• Define the value web and show how it is related to the value chain.

• Explain how the value web helps businesses identify opportunities for strategic information systems.

• Describe how the Internet has changed competitive forces and competitive advantage.

• Explain how information systems promote synergies and core competencies.

• Describe how promoting synergies and core competencies enhances competitive advantage.

• Explain how businesses benefit by using network economics.

• Define the law of diminishing returns and describe some situations in which the law does not work.