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This chapter introduces the concept of building competitive advantages using information systems-based applications. It begins with a discussion of the eras showing how the use of information resources has been historically viewed. It then looks at information resources as strategic tools, discussing information technology (IT) assets and IT capabilities. Michael Porter's Five Competitive Forces model then provides a framework for discussing strategic advantage, and his Value Chain model addresses tactical ways organizations link their business processes to create strategic partnerships. The Resource-Based View is then introduced to underpin the discussion of maintaining competitive advantage through information and other resources of the firm. The chapter concludes with a brief discussion of strategic alliances, co-opetition, risks of strategic use of IT, and co-creating IT and business strategy.

Zara, a global retail and apparel manufacturer based in Arteixo, Spain, needed a dynamic business model to keep up with the ever-changing demands of their customers and their industry. At the heart of their model was a set of business processes and an information system that linked demand to manufacturing and manufacturing to distribution. The strategy at Zara stores was simply to have a continuous flow of new products that were typically in limited ...

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