Impact of Information Technology on Porter's Five Forces Model

The assignment discusses the application of Porter's Five Forces Model to understand the competitive dynamics of the fast-food industry, focusing on McDonald's as a case study. It examines how information technology affects the bargaining power of suppliers, buyers, competitors, new entrants, and substitutes, and explores the implications of future strategies on the company's competitiveness.

Running head: STRATEGIC MANAGEMENT
Strategic Management
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Analysis of impact of information technology on Porter’s Five Forces Model of Apple
McDonald’s is one of the American fast food organization that was founded in the
year 1940. There is a huge impact of information technology on the five forces model of
McDonald’s as with the help of different technological advancements, this will help in
analysing the different bargaining power of suppliers, power of buyers, competitive rivalry,
new entrants and power of the substitutes in an effective manner (Yunna and Yisheng 2014).
The respective company needs to understand the different techniques used by them in
gaining competitive advantage in the market. McDonald’s need to analyse the strategies that
has helped Burger King and KFC in gaining competitive parity and reputation in the entire
market globally (Mathooko and Ogutu 2015).
The respective company has to apply different technological advancements in an
effective manner as this will help them in solving the different issues. The issues relating to
analysis of the other new entrants as this will help McDonald’s in implementing innovative
strategies to increase the sales of the business in an effective manner.
The online networking is required to be used by McDonald’s in attracting more
customers towards their products and services effectually. The technological advancements
will be done wherein the company can apply online ordering services for the customers as
this will help the company by in gaining competitive advantage in the entire market. The
information technology will help McDonald’s in analysing the bargaining power of the other
suppliers as this will be threat to organization wherein the suppliers are able to forward
integrate with usage of IT (Zhao et al. 2016).
The IT creates huge impact on substitutes of McDonald’s with creation of direct
product-to-product substitution. With the implementation of IT software packages, the
spending of the customers helped in growing percentage of the generic substitution in an

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effective manner. With the implementation of IT, the consumers have become knowledgeable
regarding the different offerings that will differentiate them from the competitors.
Furthermore, McDonald’s need to create inertia for the different changes.
Therefore, it can be concluded that McDonald’s need to implement the information
technology in such a manner that will help them in understanding the five forces of Porter’s
in an effective manner. The information technology will help the respective company in
creating social impacts on the buyers of McDonald’s.
Implications of future strategies of McDonald’s
There are different implications of future strategies of McDonald’s wherein the
different functions of company will become automated after implementation of information
technology. There are different positive and negative implications of advancement of IT in
McDonald’s. The company will be terminated and this will be impact the company in a
positive manner. However, the termination of the employees will be creating negative impact
on the employees as they will be losing their jobs (E. Dobbs 2014).
Furthermore, it has been seen that the company will be gaining huge competitive
advantage as when the services will be automated that will help in providing the customers
proper and accurate kind of service within specific time. The customers will be satisfied as
they will be receiving all the services in an effectual manner (Rothaermel 2015). The
automated services will help the business to grow faster in an effective manner. The
management of the company will become easy and this will help the management people to
perform the tasks in an effective manner. The positioning strategy of the company will help
them in positioning their products in such a manner that will help the company effectually.
The supply chain management will be improved in an effective manner as this will
include improvements in the business of McDonald’s effectually. There will be

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diversification in the different kind of products in the market as this will help them in gaining
competitive advantage and improve their business operations effectively. Similarly, the
company will introduce different kind of automated services wherein the customers can
directly order and they do not have to wait in the queue for the food items (Sölvell 2015). The
automated services will help the business in an effective manner as this will help the
company in distributing the different services. However, the employees will be affected in a
negative manner as they will be losing their jobs and this will affect their reputation in an
ineffective manner.
Therefore, it can be concluded that there are different kind of implications of the
future strategies on the future of McDonald’s as they will be generating automated kind of
services in an effective and effectual manner, this will help the company in solving the
different issues that has affected them in the past.

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References
E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), pp.32-45.
Mathooko, F.M. and Ogutu, M., 2015. Porter’s five competitive forces framework and other
factors that influence the choice of response strategies adopted by public universities in
Kenya. International Journal of Educational Management, 29(3), pp.334-354.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Sölvell, Ö., 2015. The Competitive Advantage of Nations 25 years–opening up new
perspectives on competitiveness. Competitiveness Review, 25(5), pp.471-481.
Yunna, W. and Yisheng, Y., 2014. The competition situation analysis of shale gas industry in
China: Applying Porter’s five forces and scenario model. Renewable and Sustainable Energy
Reviews, 40, pp.798-805.
Zhao, Z.Y., Zuo, J., Wu, P.H., Yan, H. and Zillante, G., 2016. Competitiveness assessment of
the biomass power generation industry in China: A five forces model study. Renewable
Energy, 89, pp.144-153.