Porter’s Five Forces Framework

Porter’s Five Forces Framework as an Industry and Competitive Analysis;

STI Foundation - Davao Campus

I. Background of the Study

The word “Strategy” is common now days in business world or even in

daily life you may heard lots of time people discussing about strategies to

achieve something.  You must be thinking that strategies are developed in

dreams or common sense by higher management of the company but this is not

the case, best strategies always comes after proper evaluation of internal and

external environment of the company. The strategies are made by strategist to

achieve objective or goals to allow the business to compete in industry.

In order to analyze the state of competition within a given industry, “one

must examine the composite of five competitive forces in the overall market”.

(Porter, 1979) But what are the five competitive forces? How does it work? In

what way it is effective?

In 1979, Harvard Business Review published “How Competitive Forces

Shape Strategy” by a young economist and associate professor, Michael E.

Porter. It was his first HBR article, and it started a revolution in the strategy field.

In subsequent decades, Porter has brought his signature economic rigor to the

study of competitive strategy for corporations, regions, nations, and, more

recently, health care and philanthropy.

“Porter’s five forces” have shaped a generation of academic research and

business practice. With prodding and assistance from Harvard Business School

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Professor Jan Rivkin and longtime colleague Joan Magretta, Porter here

reaffirms, updates, and extends the classic work. He also addresses common

misunderstandings, provides practical guidance for users of the framework, and

offers a deeper view of its implications for strategy today.

That is why the researcher of this major paper, applied Poster’s framework

into its industry in order analyze the state of their competition when it comes to its

threats of new entrants (JoBs academy, online jobs, opportunity abroad like

Singapore and outsourcing), bargaining power of its buyer ( acquired skills in IT

field ), threat of substitute product or services (TESDA Certification and Passing

Philnits Examination, and the like), bargaining power of its supplier ( Call center

agents, outsourcing and the like ), and rivalry among existing competitors ( STI

franchised schools , AMA Computer College , JoBs Academy and other

Computer University schools).

The researcher also found out that the five forces has a conjunction of

SWOT Analysis (Strength, Weaknesses , Opportunities and Threats ), and

included three forces from 'horizontal' competition: threat of substitute products,

the threat of established rivals, and the threat of new entrants; and two forces

from 'vertical' competition: the bargaining power of suppliers and the bargaining

power of customers.

Also ,it was also cleared to the researcher that for diversified companies,

the first fundamental issue in corporate strategy is the selection of industries

(lines of business) in which the company should compete; and each line of

business should develop its own, industry-specific, five forces analysis.

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Moreover, upon conducting the Porter’s five forces framework, the

researcher concluded that STI Foundation in general has its brand equity,

absolute cost advantage, great level of advertising expense and amazing

technique in industry and marketing analysis. STI foundation is willing to spend

millions of money in advertisement (choosing models and appear on TV like

ABS-CBN halalan) and sponsorship (Voice of the youth event and tabulation

system for beauty pageant like Ms. Earth). What make the STI down are its

access distribution, substandard product or facilities, communication channeling

and administrative framework into its branches that leads disappointment as a

result, small number of employee and students.

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II. Overview of Porter’s Five Forces Framework

Porter's five forces is a framework for the industry analysis and business

strategy draws upon Industrial Organization (IO) economics to derive five forces

that determine the competitive intensity and therefore attractiveness of a market.

Attractiveness in this context refers to the overall industry profitability. An

"unattractive" industry is one in which the combination of these five forces acts to

drive down overall profitability. A very unattractive industry would be one

approaching "pure competition", in which available profits for all firms are driven

down to zero.

Three of Porter's five forces refer to competition from external sources.

The remainders are internal threats. It is useful to use Porter's five forces in

conjunction with SWOT analysis (Strengths, Weaknesses, Opportunities, and

Threats).

Porter referred to these forces as the micro environment, to contrast it with

the more general term macro environment. They consist of those forces close to

a company that affect its ability to serve its customers and make a profit. A

change in any of the forces normally, requires a business unit to re-assess the

marketplace given the overall change in industry information. The overall industry

attractiveness does not imply that every firm in the industry will return the same

profitability. Firms are able to apply their core competencies, business model or

network to achieve a profit above the industry average. A clear example of this is

the airline industry. As an industry, profitability is low and yet individual

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 Porter’s Five Forces Framework

companies, by applying unique business models, have been able to make a

return in excess of the industry average.

Porter's five forces include - three forces from 'horizontal' competition:

threat of substitute products, the threat of established rivals, and the threat of

new entrants; and two forces from 'vertical' competition: the bargaining power of

suppliers and the bargaining power of customers.

This five forces analysis is just one part of the complete Porter strategic

models. The other elements are the value chain and the generic strategies.

Figure 1.0: Porter’s Five Forces Framework

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 Porter’s Five Forces Framework

1. The threat of the entry of new competitors

Profitable markets that yield high returns will attract new firms. This

results in many new entrants, which eventually will decrease profitability

for all firms in the industry. Unless the entry of new firms can be blocked

by incumbents, the profit rate will fall towards zero (perfect competition).

 The existence of barriers to entry (patents, rights, etc.) The most

attractive segment is one in which entry barriers are high and exit

barriers are low. Few new firms can enter and non-performing firms

can exit easily.

 Economies of product differences

 Brand equity

 Switching costs or sunk costs

 Capital requirements

 Access to distribution

 Customer loyalty to established brands

 Absolute cost advantages

 Learning curve advantages

 Expected retaliation by incumbents

 Government policies

 Industry profitability; the more profitable the industry the more

attractive it will be to new competitors

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2. The intensity of competitive rivalry

For most industries, the intensity of competitive rivalry is the major

determinant of the competitiveness of the industry.

 Sustainable competitive advantage through innovation

 Competition between online and offline companies

 Level of advertising expense

 Powerful competitive strategy

 The visibility of proprietary items on the Web

Used by a company which can intensify competitive pressures on their

rivals. How will competition react to a certain behavior by another firm?

Competitive rivalry is likely to be based on dimensions such as price, quality,

and innovation. Technological advances protect companies from competition.

This applies to products and services. Companies that are successful with

introducing new technology are able to charge higher prices and achieve

higher profits, until competitors imitate them. Examples of recent technology

advantage in have been mp3 players and mobile telephones. Vertical

integration is a strategy to reduce a business' own cost and thereby intensify

pressure on its rival.

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 Porter’s Five Forces Framework

3. The threat of substitute products or services

The existence of products outside of the realm of the common product

boundaries increases the propensity of customers to switch to alternatives:

 Buyer propensity to substitute

 Relative price performance of substitute

 Buyer switching costs

 Perceived level of product differentiation

 Number of substitute products available in the market

 Ease of substitution. Information-based products are more prone to

substitution, as online product can easily replace material product.

 Substandard product

 Quality depreciation

4. The bargaining power of customers (buyers)

The bargaining power of customers is also described as the market of

outputs: the ability of customers to put the firm under pressure, which also

affects the customer's sensitivity to price changes.

 Buyer concentration to firmconcentration ratio

 Degree of dependency upon existing channels of distribution

 Bargaining leverage, particularly in industries with high fixed costs

 Buyer volume

 Buyer switching costs relative to firm switching costs

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 Buyer information availability

 Ability to backward integrate

 Availability of existing substitute products

 Buyer price sensitivity

 Differential advantage (uniqueness) of industry products

 RFM Analysis

5. The bargaining power of suppliers

The bargaining power of suppliers is also described as the market of

inputs. Suppliers of raw materials, components, labor, and services (such as

expertise) to the firm can be a source of power over the firm, when there are

few substitutes. Suppliers may refuse to work with the firm, or, e.g., charge

excessively high prices for unique resources.

 Supplier switching costs relative to firm switching costs

 Degree of differentiation of inputs

 Impact of inputs on cost or differentiation

 Presence of substitute inputs

 Supplier concentration to firm concentration ratio

 Employee solidarity (e.g. labor unions)

 Supplier competition - ability to forward vertically integrate and cut out

the buyer

Ex. If you are making cookies and there is only one person who sells flour,

you have no alternative but to buy it from him.

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Usage

Strategy consultants occasionally use Porter's five forces framework when

making a qualitative evaluation of a firm's strategic position. However, for most

consultants, the framework is only a starting point or "checklist" they might use.

Like all general frameworks, an analysis that uses it to the exclusion of specifics

about a particular situation is considered naive.

According to Porter, the five forces model should be used at the line-of-

business industry level; it is not designed to be used at the industry group or

industry sector level. An industry is defined at a lower, more basic level: a market

in which similar or closely related products and/or services are sold to buyers.

A firm that competes in a single industry should develop, at a minimum, one

five forces analysis for its industry. Porter makes clear that for diversified

companies, the first fundamental issue in corporate strategy is the selection of

industries (lines of business) in which the company should compete; and each

line of business should develop its own, industry-specific, five forces analysis.

The average Global 1,000 Company competes in approximately 52 industries

(lines three of Porter's five forces refer to competition from external sources. The

remainder are internal threats. It is useful to use Porter's five forces in

conjunction with SWOT analysis (Strengths, Weaknesses, Opportunities, and

Threats).

Porter referred to these forces as the micro environment, to contrast it with

the more general

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III. Company’s Background

A. History of STI Foundation

It all started when four visionaries conceptualized setting up a training

center to fill very specific manpower needs.It was in the early ‘80s when Augusto

C. Lagman, Herman T. Gamboa, Benjamin A. Santos, and Edgar H. Sarte —

four entrepreneurs came together to set up Systems Technology Institute (STI), a

training center that delivers basic programming education to professionals and

students who want to learn this new skill.

Systems Technology Institute’s name came from countless brainstorming

sessions among the founders, perhaps from Sarte’s penchant for three-letter

acronyms from the companies he managed at the time. The first two schools

were inaugurated in August 21, 1983 in Buendia, Makati and in España, Manila,

and offered basic computer programming courses. With a unique and superior

product on their hands, it was not difficult to expand the franchise through the

founders’ business contacts. A year after the first two schools opened, the

franchise grew to include STI Binondo, Cubao, and Taft.

A unique value proposition spelled the difference for the STI brand then:

“First We’ll Teach You, Then We’ll Hire You.” Through its unique Guaranteed

Hire Program (GHP), all qualified graduates were offered jobs by one of the

founders’ companies, or through their contacts in the industry. The schools’ 1st

batch of graduates, all 11 of them, were hired by Systems Resources

Incorporated. And through GHP, more qualified STI graduates found themselves

working in their field of interest straight out of school.

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No one among the four founders imagined that the Systems Technology

Institute would become a college, or would grow to have over 100 schools across

the country. But it did, all because of its unique value proposition, the synergy

between the founders and their personnel, and the management’s faithfulness to

quality. A long way since its birth, STI’s thrust has permeated right into the core

of the globally competitive market — it has transcended beyond ICT and beyond

education, addressing the need for job-ready graduates. 

Mission

 We are an institution committed to provide knowledge through the

development and delivery of superior learning systems. We strive to

provide optimum value to all our stakeholders – our students, our faculty

members, our employees, our partners, our share holders, and our

community. We will pursue this mission with utmost integrity, dedication,

transparency, and creativity.

Vision

 To be the leader in innovative and relevant education that nurtures

individuals to become competent

and responsible members of society.

B. Services offered

Establishing one’s career in today’s competitive industries has become a

challenging pursuit to most job seekers. Employers too are increasingly having

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difficulty finding the right person for the job. Too often, there remains a huge gap

between the skills

required by the industry

and what a graduate has

to offer.

STI steps up to bridge this gap by introducing the Enrollment to

Employment or E2E System. The E2E System is a complete approach to human

resource development, which aims to develop ICT-enabled professionals through

innovative learning and career planning methodologies. Through the E2E

System, STI students get applicable education, job market skills, job

preparedness, and job placement assistance. The first step is the Learning

Systems Development which ensures that the curriculum content is up-to-date

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 Porter’s Five Forces Framework

and job market-oriented. A group of exemplary professionals in various fields

prepares the curriculum/curricula being taught in all STI campuses.

To make sure that the courses being offered are carried out well, STI

implements the Academic Delivery System. This guarantees that highly qualified

faculty and the state-of-the-art facilities of campuses are at par with the

standardized courseware and curriculum, thus providing world class learning

across all STI campuses.

The third step, Student Certification, assures that students are prepared

for employment through rigid assessment, evaluation, and certificate programs.

Before the students leave the security of their four-walled classrooms, they are

given the opportunity to undergo on-the-job training with some of STI’s reputable

partner companies.

STI’s responsibility to its graduates goes beyond quality education. The

final step, Job Placement Assistance, warrants every graduate employment

support with the help of Interactive - Career Assistance Recruitment System (I-

CARES) and international placement agencies like GROW, INC..With these

unique processes making up the E2E System, STI has become a pioneer all over

again. It has introduced a holistic approach to education and bravely took on the

challenge to ensure a bright future for its graduates through job placement

assistance and a stronger alumni support system.

The E2E System has redefined the landscape of the education sector.

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C. Administrative / Communication Channeling Policies

The diagram above shows how STI Foundation distributes access and

communication policies into its branches.

From the STI head quarters (HQ) the distribution access and

communication will pass first into its STI Channels, and from STI channels into its

HQ owned branch schools and franchised schools then vise versa. In this

situation, STI Foundation is composes of 67 colleges and education services

(diploma) for the entire Philippines managed by the school administrator. The 67

colleges is categorize into Metro Manila, Southern Luzon, Northern Luzon,

Southern Visayas, Northern Visayas, Southern Mindanao and Northern

Mindanao in which we called STI Channels managed by channel manager . STI

Channel Manger will now cater all the administrative and access concerned by

the each school administrator before this concerned proceeds into STI HQ. So

therefore, STI Davao particularly is under Southern Mindanao channel manager

and STI Zamboaga in under Northern Mindanao.

STI Head Quarter (HQ)

STI Channels
Channel Manager

STI HQ owned branch schools STI franchised schools

IV. Industry Analysis for STI Foundation using Porter’s Five Forces

Porter’s Five Forces Checklist

1. New Entrants – JoBs Academy, Opportunity abroad like Singapore and Home

based outsourcing

a.) Market size and market potential – the new entrants above attracts

employee of STI to work for them due to its salary price and benefits

provided.

b) Present and expected market growth rate – JoBs academy is said to

be growing and progressively attracting enrollees due to it competitive

faculty and high standard facilities.

c) Degree of concentration

–> number of participants

–> market share of participants

–> market shares of leaders

–> joint market share of 3 to 5 leading companies

e) methods of competitive rivalry – intensive marketing strategy ,

certified instructors and high standard facilities

Impacts:

 cost of initial investment and level of fixed costs

 cost advantage of existing players

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 brand loyalty of customers

 existence of controlled patents and licenses

 limited access to raw materials

 scarcity of important resources

 control of distribution channels

 close relationships between customers and existing suppliers

 cost to customers of switching suppliers 

2. Threat of Substitutes –TESDA Certification and Passing Philnits Examination

and Master’s degree

a) barriers to entry – If their instructors are certified , has finished

graduate degree and has qualified skills

b) present and future industry`s profitability – number of enrollees

d) possible entry candidates – opportunity abroad and other company

Impacts:

 there are no close relationships with customers

 customers can produce product themselves

 switching costs are cheap

3. Rivalry in the Industry

A.) Present substitutes - STI franchised schools, AMA Computer

College, JoBs Academy and other Computer University schools

c) Future substitutes and their potential danger for the sector – call

centers and Home Based Jobs; the student will no longer enroll and study

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 Porter’s Five Forces Framework

for 4 – 5 years instead acquire the skills and get the job provide by the

employer

- In STI Foundation are trying to lower their prices to increase consumer

call ratio by minimize per minute profit margin but increasing overall company

revenues.

- In the past few years, numbers of new features were added in the STI

marketing and administrative technique. Like having pre-school, grade school

and high school in which other IT schools are following each other strategies to

minimize the differentiation in the services rendered so customer can easily apply

other services.

- In the past, IT schools offers free training and seminars to compete each

other that is why customer is getting more services in the form of certification and

master degree unit.

Impacts:

 there are many similar size players

 there is little difference between the products

 there is low market growth

 barriers of exit are high, due to earlier investment

 all players have similar strategies

4. Bargaining Power of Customers – students and faculty acquired potential

skills in IT field

Impacts:

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 knowledge of production costs of product

 volume bought

 number of company hiring is abundant

 level of supplier fixed costs

 availability of substitutes

 price sensitivity of customers

 strategic importance of product to customer

5. Bargaining Power of Suppliers – Enrollment to Employment System of STI,

Certified Instructor, and highly skilled and competitive students, high standard

courseware (because STI has a research department who always revised and

update the courseware used by the instructors), and unique marketing strategy (

that keep STI foundation grow and more competitive to other rivalry)

- The bargaining power of IT University schools is more because they are the

huge provider of computer facilities, conducive class room and avail accreditation

from CHED. JoBs Academy on the other hand also provides high standard

facility and certified student graduates that other IT schools provides high

standard facilities also

Impacts:

 suppliers decide to produce the whole product themselves 

 a few suppliers dominate the market

 switching costs from one supplier to another is high

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 there are no substitutes for a particular input

 the supplier's customers are fragmented, and so have little power

V. Conclusions

Upon conducting the Porter’s five forces framework, the researcher

concluded that STI Foundation in general has its brand equity, absolute cost

advantage, great level of advertising expense and amazing technique in industry

and marketing analysis. STI foundation is applied effort to spend millions of

money in advertisement (choosing models and appear on TV like ABS-CBN

halalan) and sponsorship (Voice of the youth event and tabulation system for

beauty pageant like Ms. Earth and Bb. Pilipinas and the like). What make the STI

down are its access distribution, substandard facilities, communication

channeling and administrative framework into its branches that leads

disappointment as a result, small number of employee and students.

In STI Davao Campus the main problem why the number of enrollees is

degrading is the location and the campus itself, it is my 4 th semester in teaching

in this institution I have no problem regarding the subject loading, course ware ,

relationship with my head and co-faculty, and salary . What disappointed me in

teaching STI is 1st the building itself is not conducive for learning and it is even

prone to bad influences like internet café, malls and smoking. 2 nd is the access of

communication and the administrative policy of STI as a whole not only in Davao.

For instance, I am the ICT coordinator –it makes me so hard to request funding

and materials for events and activates of ICT department due to its delay of

approval, communication and it needs a thorough justification. As a result, as a

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coordinator I planned ahead time - 4 to 5 months before the said event

unfortunately it was not even granted. It so happened because of channeling

framework they had , STI Davao’s request will past 1 st into Southern Mindanao

channel manager (as I have mentioned in STI communication framework above)

which was located at Gensan Campus before it will be send into STI HQ at

central Luzon. That is why, currently in STI – Davao nobody will accept the

position of Dean, Program Head and Coordinator, and if ever there is one who

accepted the position after 1 or 2 sems resignation letter arises; the shifting or

passing of position is very fast. I think this is the disadvantage of a business

school.

In order to analyze the state of competition within a given industry, STI must

examine the composite of five competitive forces in the overall market.

And the areas of inquiry that an industry must examine are as follows:

 Competitive pressures associated with existing rivalry

 Competitive pressures associated with the threat of new entrants

 Competitive pressures associated with the threat of substitute products

 Competitive pressures stemming from supplier bargaining power

 Competitive pressures stemming from buyer bargaining power

Another thing is that, we must identify the steps in the process of Analysis as

show below:

 Step 1 – Identify specific competitive pressures associated with each

of the five forces

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 Step 2 – Evaluate how strong the pressures comprising each of the

five forces are

 Step 3 – Determine whether the collective strength of he five

Porter’s work, directed at both strategic business planners and general

managers, argues that many of the contemporary strategic planning frameworks

view competition too narrowly and pessimistically because they were primarily

based on projections of market share and market growth. His five competitive

forces provide a detailed description of the factors that determine the relative

strength each force.

I have notice that Porter initial work did not include IT as a component of

the framework, according to Betz (2001), it has proven that extremely useful in its

regard.

Figure 1.0 Impact of Competitive Forces

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The figure above describes the impact of IT on the five competitive forces.

Column 1 lists the key competitive forces that shape competition given industry

segment. At STI Foundation, not all forces are equal of importance. STI HQ

sometimes are dominated by supplier (for example, linearization on Diploma

program) , while other IT school are preoccupied with the threat of new entrants

and/or substitute products ( such as certification and outsourcing ) .

Figure 2.0 shows the Elements of Industry Structure.

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 Porter’s Five Forces Framework

Column 2 of figure 1.0 lists key implications of each competitive fore. For

example, when new entrants move into an establish industry segment, they

generally introduce significant additional; capacity because they frequently have

allocated substantial resources to gain a foothold in the industry. Typically, new

entrants cause a reduction in prices or an increase in costs.

Column3 lists some example of how IT can be used to change the

balance of power among these five forces. For example, IT can raise barriers to

entry by increasing economies of scale, increasing switching costs, differentiating

a product services, or limiting access to key markets or distribution channels.

Figure 3.0 shows the Impact of Competitive Forces.

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 Porter’s Five Forces Framework

I have understood that Porter identified 3 generic strategies for achieving

proprietary advantage within an industry that is applicable also in STI foundation:

cost leadership, differentiation and focus.

Figure 4.0 Three Generic Strategies Related to Competitive Advantage and

scope

Competitive Advantage
Lower Cost Differentiation

Broad Target Cost Leadership Differentiation

Scope
Narrow Target Cost Focus Differentiation Focus

Each generic strategy involves two key choices: 1. the competitive

Mechanism - STI can lower its cost or differentiate its products and services; and

2. the competitive scope - STI can target a broad market or narrow one. Cost

leadership and differentiation strategies are targeted toward a broad market,

while focused strategies seek to lower costs (cost focus) or differentiate and

services ( differentiation focus ) in a narrow industry segment . The specific

actions required to implement each generic strategy vary widely from industry to

industry, as do feasible genetic strategies in a particular industry. Selecting and

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implementing the appropriate generic strategy are thought to be central to

achieving long- term competitive advantage in an industry.

At the core of the concept of genetic strategies are two basic principles.

1st, competitive advantage is believed to be the goal of any strategy. 2 nd, I

believed that STI must define the type of competitive advantage it seeks to attain

and the scope within which it will be attained. I believe that the decision to be

attain to be “ all thins to all people “ is a recipe for strategic mediocrity and below

–average performance . More recently, I would like to emphasize that, attention

has shifted from focus on the specific strategy of a firm to focus on core

competencies. This shifts the focus of attention from a specific strategy to the

underlying organizational competencies that will enable (or prevent ) a firm from

reaching that strategy .

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VI. Recommendation

As a recommendation for STI Foundation particularly in Davao, the

administration should use the Value chain analysis or value chain; both refer to

the same concept. Systematic Analysis of Company’s Value Chain – is an

effective way to search for potential IT opportunities.

This concept of value chain analysis was put forward initially by Michael

Porter in 1985. This concept relates to business management. It entitles all the

niche activities and the strategies, carried out to value the customer. This

concept was deduced to develop sustainable competitive advantages for an

organization within the business arena of the present epoch. It helps us

understand how different services within an organization and values added to

them. It is pretty necessary because every organization is a conglomeration of

certain set of activities that altogether by linking up together, add value to the

business and moreover, altogether these form the organization’s value chain.

The activities may include the buying of products, the distribution, the marketing

activities etc. The value chain analysis model is served as one of the most

powerful strategic tools for the strategic internal planning of an organization.

The activities which the value chain analysis focuses on, relate to primary

activities such as the operations, inbound logistics, outbound logistics, sales and

marketing, and services respectively. Other than the primary activities, the

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support activities include the human resource management, R & D,

administrative infrastructure management and the procurement.

Each of these mentioned activities is a chain, which a firm in a specific

industry takes out. A product or a service passes through the entire chain of

activities and thus gaining more value as this chain of activities nourishes the

product through more added values. It is necessary for the managers to carry out

value chain analysis for an organization to draw a competitive advantage with

sustained company repute. This competitive advantage over the other

competitors is the ability to perform all the activities along with the value chain.

It is feasible for a company to understand its capabilities in accordance

with the needs of the customers in order to make the competitive strategy

successful. The company tends to be more profitable provided if the activities

within the value chain are effectively and efficiently managed in such a way that

the price which the customer pays for any product or a service exceeds the

relative costs of the activities carried out in within the value chain. Though this

theory is pretty easy to understanding, but quite time consuming when practiced.

The first step in conducting a value chain analysis for an organization is to

break up all the activities which are carried out within the organization and which

are entailed in a similar framework. After that, the assessment is carried out in

order to check the potential for adding certain values like cost/ differentiation etc.

and lastly, the analyst determines the pertinent strategies that altogether serve in

enabling the company to achieve a sustainable competitive advantage.

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The value chain analysis model is used by the companies in order to

identify and understand the crucial aspects with respect to the internal

competitive strengths and external market competencies. The model also

highlights that how the value chain activities are linked together to create value

for the buyer at the end.

In summary, a systematic examination of a company’s value chain is an

effective way to research for profitable IT applications. This analysis requires

keen administrative insight, awareness of industry structure, and familiarity with

rules of competition in the particular setting. STI Foundation needs to understand

their own value chains as well as those of key customers and suppliers in order

to uncover potential new service areas. Similarly, understanding competitors’

value chains provides insight on potential competitive moves. Careful thought I

needed to identify potential new entrants to an industry – those companies

whose current business could be enhanced by an IT –enabled product or

service.

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VI. References

Books

Betz, F. (2001). Strategic management and information technology. New York ,

Curtis, Jeith. (Ed.). (1994). From management goal setting to organizational

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