Changing the Nature of Competition
After surveying a wide range of industries, we find that information technology is changing the rules of competition in three ways. First, advances in information technology are changing the industry structure. Second, information technology is an increasingly important lever that companies can use to create competitive advantage. A company’s search for competitive advantage through information technology often also spreads to affect industry structure as competitors imitate the leader’s strategic innovations. Finally, the information revolution is spawning completely new businesses. These three effects are critical for understanding the impact of information technology on a particular industry and for formulating effective strategic responses.