Competitive Forces Model and Knowledge Management Jason C

Competitive Forces Model and Knowledge Management Jason C. H. Chen, Ph. D. Professor of MIS School of Business Administration Gonzaga University Spokane, WA 99223 chen@gonzaga. edu

Competitive Force Model Entry barriers Economies of scale Proprietary product differences Brand identity Switching cost Capital requirements Access to distribution Government policy Expected retaliation Suppliers New entrants Bargaining power of suppliers Determinants of supplier power Importance of volume to supplier Presence of substitute inputs Switching cost. . . Determinants of substitution threat Relative price/performance of substitutes Switching cost… Threat of new entrants Industry competitors Intensity of rivalry Rivalry Determinants Industry growth Brand identity Switching cost…. Bargaining power of buyers Buyers Determinants of buyer power Bargaining Leverage Price Sensitivity Buyer volume Brand identity Switching cost Product differences Buyer information Buyer profits …. Threat of substitutes Substitutes (Source: Porter, 1980)

FIVE COMPETITIVE FORCES MODEL NEW MARKET ENTRANTS Threats THE FIRM SUPPLIERS SUBSTITUTE PRODUCTS & SERVICES TRADITIONAL COMPETITORS Bargaining power CUSTOMERS N

FIVE COMPETITIVE FORCES MODEL NEW MARKET ENTRANTS Internal Forces 1. customer focus 2. communication 3. core compentencies 4. complexity 5. quality SUPPLIERS Threats THE FIRM SUBSTITUTE PRODUCTS & SERVICES TRADITIONAL COMPETITORS Bargaining power CUSTOMERS N Source: Knowledge: the key to organisational survival, Raeside and Walker, the TQM Magazine, 2001

Competitive Forces • Knowledge management is the main competitive force. -- Quintas et al. , 1997 Organizations should stratify the management of customers based on principles of quality (satisfaction), cost/profit, and future profitability potential. Source: Knowledge: the key to organisational survival, Raeside and Walker, the TQM Magazine, 2001, p. 157

Competitive Forces (cont. ) • The success does not necessarily go to the firms that know the most, but to the firms that can make the best use of what they know and know what is strategically most important to the firm and to the society. • Therefore, firms should become “learning organizations” to maximize their knowledge base.

Modified European Quality Model: e-Learning People Results Policy & Strategy Customer Results Partnership & Communities IT & Resource Society Results Content/ infrastructure Innovation and Learning Source: Knowledge: the key to organizational survival, Raeside and Walker, The TQM Magazine Key Performance Results Processes Leadership Enablers