1. Discuss industry attractiveness. Be sure to include Porter’s Five Forces analysis in your answer.
The US information technology (IT) industry is one of the largest in the whole world and is made up of leading companies such as IBM, Microsoft, Google, as well as midsize and smaller companies. The industry has revolutionized the American economy in that every organizational aspect incorporates technology. The IT industry attractiveness can be summarized as follows:
- Bargaining power of suppliers – Suppliers in the industry have a moderate force as there are many suppliers both within and outside the country. However, different IT companies have their trusted suppliers and this makes it difficult for the firms to substitute the supply of raw …show more content…
This implies that companies that do not understand their capabilities and strategies or those of their competitors stand a risk of losing out to their competitors when it comes to product development, differentiation, pricing and other features that affect profitability and market share. Fully understanding the industry market and competitors also ensures a firm’s invulnerability as it is able to adequately prepare and plan for success.
3. Describe how Porter’s Diamond of National Advantage explains U.S. success in the IT industry (i.e. Silicon Valley).
The Diamond of National Advantage explains why some firms in certain countries are able to remain innovative, pursue improvements and overcome barriers to change and innovation (Porter, 1990). The success of the US IT industry could be described by the Porter’s Diamond of National Advantage as follows:
- Factor conditions – These include factors like skilled labor and resources that are needed for production. In the Silicon Valley, high skills and innovation are the characteristics of the world’s leading IT firms like Google and Facebook. These companies have been able to attract high IT skills. In addition, the Silicon Valley has numerous infrastructure in terms of universities and research institutes such as the …show more content…
This is because organizations first examine the value and the type of their internal resources and capabilities before developing a strategy meant to achieve competitive advantage. Other than having resources, a firm should have an appropriate strategy for using the available resources to achieve good performance. For instance, firms that have a big production plant can produce in bulk lead to cost-based competitive advantage. On the other hand, firms that have proper knowledge of a product and have the skills and resources to constantly develop a superior product experience product-based competitive
The US information technology (IT) industry is one of the largest in the whole world and is made up of leading companies such as IBM, Microsoft, Google, as well as midsize and smaller companies. The industry has revolutionized the American economy in that every organizational aspect incorporates technology. The IT industry attractiveness can be summarized as follows:
- Bargaining power of suppliers – Suppliers in the industry have a moderate force as there are many suppliers both within and outside the country. However, different IT companies have their trusted suppliers and this makes it difficult for the firms to substitute the supply of raw …show more content…
This implies that companies that do not understand their capabilities and strategies or those of their competitors stand a risk of losing out to their competitors when it comes to product development, differentiation, pricing and other features that affect profitability and market share. Fully understanding the industry market and competitors also ensures a firm’s invulnerability as it is able to adequately prepare and plan for success.
3. Describe how Porter’s Diamond of National Advantage explains U.S. success in the IT industry (i.e. Silicon Valley).
The Diamond of National Advantage explains why some firms in certain countries are able to remain innovative, pursue improvements and overcome barriers to change and innovation (Porter, 1990). The success of the US IT industry could be described by the Porter’s Diamond of National Advantage as follows:
- Factor conditions – These include factors like skilled labor and resources that are needed for production. In the Silicon Valley, high skills and innovation are the characteristics of the world’s leading IT firms like Google and Facebook. These companies have been able to attract high IT skills. In addition, the Silicon Valley has numerous infrastructure in terms of universities and research institutes such as the …show more content…
This is because organizations first examine the value and the type of their internal resources and capabilities before developing a strategy meant to achieve competitive advantage. Other than having resources, a firm should have an appropriate strategy for using the available resources to achieve good performance. For instance, firms that have a big production plant can produce in bulk lead to cost-based competitive advantage. On the other hand, firms that have proper knowledge of a product and have the skills and resources to constantly develop a superior product experience product-based competitive