(7) The competitive forces model : is used to describe the interaction of external influences , specifically threats and opportunities

, that effect an organizations strategy and ability to compete. It also provides a general view of the firm , its competitors and the firm's environment

The impact of the internet on the CFM (a) substitute products and services enables new substitutes to emerge with new approaches to meeting needs of and performing functions

(b) customer's bargaining power availability of global price and product information shifts ; bargaining power to customer

(c) suppliers' bargaining power procurement over the internet tens to raise bargaining power over suppliers ; suppliers can also benefit from reduced barriers to entry and from the elimination of distributors and other intermediates standing between them and their users

(d) threat of new entrants the internet reduces barriers to entry , such as the need for sale force , access to channels, and physical assets it provides a technology for driving business processes that makes other things easier to do

(e) positioning and rivalry among existing competitors widens the geographic market, increasing the number of competitors and reducing differences among competitors , makes it more difficult to sustain operational advantages , puts pressure to compete on price

(8) Value chain model : highlights specific activities in the business where competitive strategies can best be applied and where information systems are most likely to have a strategic impact.

Identify activities : the value chain model views the firm as a series or chain of basic activities that add a margin of value to a firm's products or services these activities can be categorized as either primary activities or support activities primary activities : are most directly related to the production and distribution of the firm's products and services , which create value for the customer . They include inbound logistics , operations, outbound logistics , sales and marketing and service. Inbound logistics includes receiving and storing materials for distribution to production. Operations transform inputs into finished products. Outbound logistics entails storing and distribution finished products. Sales and marketing includes promoting and selling the firm's products. The service activity includes maintenance and repair of the firm's goods and services support activities : make the delivery of the primary activities possible and consist of organization infrastructure (administration and management) human resources ( employee recruiting , hiring and training ) technology ( improving products and the production process ) and procurement ( purchasing input )

The model applied to IT : This model identifies specific , critical leverage points where a firm can use information technology most effectively to enhance its competitive position. The model attempts to link IT solutions to business strategy. It is based on a simple economic theory. Its strategies must be based on counter forces that erode these advantages. IT is considered a key factor in being able to deal with these forces. However, there are no existing formalizations of the value-chain model either by industry, market structure, or organizational structure. By using such a model, an executive can also analyze technology and resource requirements required to transform one set of business processes into another more desirable state.