Porter five forces model, developed by Michael E. Porter of Harvard University in 1979, holds the purpose to analyse theindustry in order to determine the level of intensity regarding the competition and attractiveness of the industry. Theattractiveness of an industry is measured in terms of profit; more profitability means a more attractive industry and lowprofitability means a low attractive industry. Porter’s Five Forces model is a powerful management tool for analysing thecurrent industry profitability and attractiveness by using the outside-in perspective. Within the last decades, the model hasattracted some criticism because of the developing Internet economy. Due to an increasing significance of Digitalization,Globalization and Deregulation, the industry structure of the ‘Old Economy’ changed fundamentally. The ‘New Economy’ isnot comparable with the ‘Old Economy’, which is the basis of the Five Forces model. Moreover, the last decades haveshown that Information Technology became more and more important. Nowadays, Technology is one of the most importantdrivers for change and not only important for the implementation of change. The outcome of this critical literature reviewshows that the three new forces changed the industry structure, but they do not restructure the model. Porter’s Five Forcescannot be considered as outdated. The basic idea that each company is operating in a network of Buyers, Suppliers,Substitutes, New Entrants and Competitors is still valid. The three new forces just influence each of the Five Forces. Anexample is that the Bargaining Power of Buyers increased due to the access to much more information because of theInternet. Furthermore, the Threat of New Entrants decreased since companies have to make high investments inTechnology which has a deterrent effect on new potential market entrants.Source: https://essay.utwente.nl/65339/1/D%C3%A4lken_BA_MB.pdf Question 3Provide a comprehensive explanation of each of the following terms in the context of Enterprise-wide Information andCommunication Technology. 3.2 Centralised Architecture
Porter five forces model, developed by Michael E. Porter of Harvard University in 1979, holds the purpose to analyse the
industry in order to determine the level of intensity regarding the competition and attractiveness of the industry. The
attractiveness of an industry is measured in terms of profit; more profitability means a more attractive industry and low
profitability means a low attractive industry. Porter’s Five Forces model is a powerful management tool for analysing the
current industry profitability and attractiveness by using the outside-in perspective. Within the last decades, the model has
attracted some criticism because of the developing Internet economy. Due to an increasing significance of Digitalization,
Globalization and Deregulation, the industry structure of the ‘Old Economy’ changed fundamentally. The ‘New Economy’ is
not comparable with the ‘Old Economy’, which is the basis of the Five Forces model. Moreover, the last decades have
shown that Information Technology became more and more important. Nowadays, Technology is one of the most important
drivers for change and not only important for the implementation of change. The outcome of this critical literature review
shows that the three new forces changed the industry structure, but they do not restructure the model. Porter’s Five Forces
cannot be considered as outdated. The basic idea that each company is operating in a network of Buyers, Suppliers,
Substitutes, New Entrants and Competitors is still valid. The three new forces just influence each of the Five Forces. An
example is that the Bargaining Power of Buyers increased due to the access to much more information because of the
Internet. Furthermore, the Threat of New Entrants decreased since companies have to make high investments in
Technology which has a deterrent effect on new potential market entrants.
Source: https://essay.utwente.nl/65339/1/D%C3%A4lken_BA_MB.pdf
Question 3
Provide a comprehensive explanation of each of the following terms in the context of Enterprise-wide Information and
Communication Technology.
3.2 Centralised Architecture
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