competitors of the enterprise (suppliers, customers, distribution channels, or rival arenas) whose competitive position is affected by the firm's use of information technology and the thrust it supports or shapes. Exhibit 12: Wiseman's Strategic Option Generator(Wiseman 1988, p.152) Competitive strategies can be generated through the procedure shown in Exhibit 13. To Porter's and Wiseman's contributions, Earl adds the notions of offensive move and defensive reaction; and use of the strategic measures by the enterprise itself or provision to the target. Exhibit 13: Earl's Procedure for Generating Competitive Strategies(Earl 1987) Wiseman's five strategic thrusts require closer attention. (1) Differentiation The first 'strategic thrust', differentiation, was discussed earlier. (2) Cost Strategic cost thrusts are measures intended to: reduce the enterprise's cost-profile, by reducing or avoiding specific costs; help suppliers, distribution channels, or customers reduce or avoid costs, so that the enterprise receives preferential treatment or other benefits; or increase the cost-profiles of its competitors. Economies of scale enable relatively large enterprises to acquire, produce, process, store, ship, or sell products at lower cost per unit than relatively small ones. Important factors in gaining economies of scale include: specialisation; automation; bargaining power; experience; and failures of proportionality. At some point, however, diseconomies may set in, due to, for example, increasing bureaucratic inefficiencies, transport charges or lack of local labour. Economies of Scopeis another form of cost saving. Rather than arising from an expansion in the size of the primary operation, these derive from extension into additional operations which can share the infrastructure costs. Mechanisms include common factors of production, by-products, reuseability, and expertise. The potential also exists for economies of information whereby re...
