J. Xu and M. Quaddus, Managing Information Systems, DOI: 10.2991/978-94-91216-89-3_2, Ó Atlantis Press 2013 27 Chapter 2 Information Systems for Competitive Advantages This chapter will review competitive forces and competitive information systems strategies for gaining competitive advantages, explain concepts of value chain, value web and business eco- systems & co-opetition, and discuss innovation strategy. 2.1 Competitive Strategies Gaining competitive advantage is critical for organisations. Baltzan and Phillips (2010, p. 16) define competitive advantage as ‘a product or service that an organization’s cus- tomers value more highly than similar offerings from its competitors’ (in other words, you have something useful (i.e. products, services, capabilities) that your competitors do not have). Competitive advantages are typically temporary as competitors often seek ways to duplicate the competitive advantage (Baltzan & Phillips 2010, p. 16). In order to stay ahead of competition, organisations have to continually develop new competitive advan- tages. This section discusses how an organisation can analyse, identify, and develop com- petitive advantages using tools such as Porter’s Five Forces, three generic strategies, and value chains. Michael Porter’s Five Forces Model is a useful tool to assist in assessing the competition in an industry and determining the relative attractiveness of that industry. Porter states that in order to do an industry analysis a firm must analyse five competitive forces (Baltzan & Phillips 2010, p. 17): • Rivalry of competitors within its industry • Threat of new entrants into an industry and its markets • Threat posed by substitute products which might capture market share • Bargaining power of customers • Bargaining power of suppliers.