People Innovation Excellence

How Five Competitive Forces and Resource-Based View Can be Used to Provide a Winning Position for a Global Airline ?

5’s Competitive Forces Model

 Using the 5’s Competitive forces model to describe how information technology might be used to provide a winning position for “a global airline :

  • Potential threat of new entrants: Barrier for new entrants can be done by switching cost of plane suppliers, so the new entrants can’t have access to respectable suppliers.
  • Bargaining power of buyers: by doing a market research, knowing what customers want from a plane trip, and showing the strength of the products offered based on the knowledge.
  • Bargaining power of suppliers: having a good selection of multiple suppliers of planes and other resources, so when one fails to be bargained with, there are still a set of selection
  • Threat of substitute products: promote how an airline is more efficient than travelling by automobile and ships.
  • Industry competitors: keep observing the competitive actions the rival airlines might pull and doing something to counter it with cost effectiveness, getting more market access, and differentiating services.

Resource-based View 

Use resource-based view  to describe how IT might be used to provide and sustain a winning position for “ a global airline” :

First, we must identify the firm’s potential key resources: the people, the technology, the information, and the process.

Then, the following criteria of VRIN and VRIO must be fulfilled.

  • Valuable: the company must give a more valuable service for the customer than it’s competitors, for example better safety or faster landing and takeoff.
  • Rare: the company must have a rare resource that can’t be found in it’s other competitors, for example a faster computing system, qualified human resource, or the latest model of plane.
  • In-imitable: the firm must have a structure, process, or service that is hard to be imitated by other companies at any circumstances. For example here is by designing a hidden complex conveyor system for briefcases that is effective, unique, and hard to imitate.
  • Non-substitutable: The services offered must not be able to be substituted by other kinds of services. For example, people take bus in travelling because it’s cheaper even though it would take longer than plane, so lower the cost of plane trip to prevent people from using the substitiute of bus.

Reference :

Keri E. Pearlson& Carol S. Saunders. (2013). Strategic Management of Information Systems. 05. John Wiley & Sons Singapore. . ISBN: 978-1-118-32254-3. Chapter 2

Published at : Updated
Written By
Tri Pujadi, S.Sos,MM dan Ricky Juniarto
Research Coordinator | School of Information Systems

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