The data and information revolution continues to sweep across the business landscape. Over the recent years with advancements in technology, the automation of Business Intelligence and the fact we have access to more data than ever, successful businesses are using data and information to continue to improve their business, understand their customers’ needs to greater detail and to monitor their competition.
With effective capture of data and having the ability to turn this data into useful information business are ever increasing their ability to use this to their advantage.
We are able to analyse BIG data to understand customer influences, buying habits and their experiences with the products and services they are buying. We can use this to increase efficiencies, adjust pricing points and our marketing to suit our target markets.
Technology is continuing to change the way businesses operate. It is influencing the way businesses produce their products, the markets they can access in terms of new sectors or even new businesses, human requirements and the potential to save on costs and increase profits.
Through technology there is continuing change of industries themselves. It continues to bring opportunities to change each of the Five Forces affecting an industry which can be seen below:
- Threat of New Entrants
- Customer Bargaining Power
- Competitive Rivalry
- Threat of Substitutes
- Supplier Bargaining Power
Below are some examples of how technology can influence these five forces.
- Technology can increase the power of buyers in industries assembling procured components. Automated order processes for materials and quick / automated vendor quotation files make it easier for buyers to evaluate sources of materials and make-or-buy decisions.
- With the ever increased access to and the flexibility of computer aided design and manufacture has meant that established firms are able to make their products faster and cheaper than before thus increasing the barriers for any substitute products entering their markets.
- With the ever changing landscape of online access to products and services, customer bargaining power is ever increasing and the easy of changing to another supplier is easier than ever with the rise in comparison sites.
- In many industries the threat of new entrants are reduced due the potential investment in capital equipment to compete efficiently with existing providers. However it has had an adverse affect on some industries where starting a business is easier than ever with advertising and marketing at everyone’s finger tips with ‘free’ social media exposure.
- Competitive rivalry is ever increasing and business have to use technology to obtain competitive advantage wherever possible.