2. Determine the role of information technology in industry structure. Managers should predict the likely impact of information technology on their industry’s structure. They must examine how information technology might affect each of the five competitive forces. Not only is each force likely to change but industry boundaries may change as well. Chances are that a new definition of the industry may be necessary.
Many companies are partly in control of the nature and pace of change in the industry structure. Companies have permanently altered the bases of competition in their favor in many industries through aggressive investments in information technology and have forced other companies to follow. Citibank, with its automated teller machines and transaction processing; American Airlines, with its computerized reservations system; and USA Today, with its newspaper page transmission to decentralized printing plants, are pioneers that have used information technology to alter industry structure. A company should understand how structural change is forcing it to respond and look for ways to lead change in the industry.