The high flexibility, autonomy as well as profitability of information service industries have been playing an important role in Taiwan industry and economy transformation. While information service businesses in Taiwan tend to be small scale and have limited funds, a range of industries, such as semiconductor and communication industry, have relied on powerful software to enhance the value added. In effect, information service industry also has become the leading industry in the knowledge-based economy. More specifically, its market size and growth rate of global software industry have exceeded hardware industry. As a result, we expect that the Taiwan information service industry which is based on co-opetition business model can enhance the industrial upgrades and further lead to economic growth in Taiwan. There is some superiority of Taiwan in terms of information industry developments, including well-developed information infrastructure, superior global logistic ability and geographical position, highly qualified and experienced human resources and so on. Furthermore, the information digitalization, economy globalization as well as the rising of Asia Pacific region also provide Taiwan with a great deal of new business models and opportunities for its information industry developments. Due to small market size and the decreasing growth rate of GDP in Taiwan, near half of the information service firms have experienced decline in profitability. However, many of the information service companies reinforce their ability to make a profit by adjusting operation models as well as constructing value net. For instance, according to MIC (2006), the exportation of system integration will grow over 30% by 2009, and 70% of the growth will come from China. Therefore, the information service firms in Taiwan should carefully analyze their internal core resources and uniqueness to develop core competency which can sustain their competitive advantages. Based on resource based theory, game theory, and the value net concept proposed by Brandenburger & Nalebuff (1955), this research used case studies and secondary data which collected from some professional institutions to analyze how do firms take the interactions between customers, suppliers, and substitutes into account when they are making strategies, changing or expanding value net as well as innovating operation models to create uncontested market space. Our research suggest that as the investments of Taiwan information service industry are more likely to be firm specific, due to their products and services characteristic. Consequently, the information service firms in Taiwan need to ally themselves with hardware manufacture industry to obtain competitive advantages in the global market. Specifically, we need to gain resources through constructing dynamic value net which in turn increase productivity, and adjust strategies flexibly to create more preferable business environment. By outsourcing and strategic alliance, companies are able to obtain partners¡¦ competitive advantages, and create a win-win business environment. Also, those companies that adopt the concept of game theory to build vale nets can create a win-win strategy that is beneficial for companies and industry¡¦s future developments. Key workds¡GInformation service industries in Taiwan, Resource based theory, Game theory, Value net