be conceived of broadly to encompass the information that businesses create and use as well as a wide spectrum of increasingly convergent and linked technologies that process the information. In addition to computers, then, data recognition equipment, communications technologies, factory automation, and other hardware and services are involved.
The information revolution is affecting competition in three vital ways:
It changes industry structure and, in so doing, alters the rules of competition.
Mr. Porter is professor of business administration at the Harvard Business School. He is the author of the new best-seller Competitive Advantage (Free Press, 1985) and Competitive Strategy (Free Press, 1980), and he recently served on the Presidential Commission on Industrial Competitiveness.
Mr. Millar is the managing partner for practice of Arthur Andersen & Co. and is responsible for the professional practices of the firm worldwide. He has worked extensively with executives to increase their understanding of information in the management function.
Authors’ note: We wish to thank Monitor Company and Arthur Andersen for their assistance in preparing this article. F. Warren McFarlan also provided valuable comments.
Editor’s note: All references appear at the end of the article.