Creating competitive advantage
In any company, information technology has a powerful effect on competitive advantage in either cost or differentiation. The technology affects value activities themselves or allows companies to gain competitive advantage by exploiting changes in competitive scope.
Lowering cost. As we have seen, information technology can alter a company’s costs in any part of the value chain.8 The technology’s historical impact on cost was confined to activities in which repetitive information processing played a large part. These limits no longer exist, however. Even activities like assembly that mainly involve physical processing now have a large information-processing component.
Canon, for example, built a low-cost copier assembly process around an automated parts-selection and materials-handling system. Assembly workers have bins containing all the parts needed for the particular