In this topic we will discover about using information system for gaining competitive advantage. The learning objectives are also to identify basic competitive strategies and several strategic uses of IT. The role of information system in order to gain competitive advantage is IT plays a major role in reengineering most business processes. IT can substantially increase process efficiencies, improves communication and facilitates collaboration.
COMPETITIVE ADVANTAGE WITH INFORMATION SYSTEM
In order to gain competitive advantage with information system, there are several strategies that can be use. Firstly, cost strategy can make producers become low-cost and also help suppliers or customers reduce costs. Secondly, differentiation strategy is use to differentiate a firm’s products from its competitors. Thirdly, innovation strategy is the products, services or markets that have their own unique. Next, growth strategy is to expand company’s capacity to produce and also into global markets. Then, alliance strategy is to establish linkages and alliances with customers, suppliers, competitors, consultants and other companies.
Besides that, other competitive strategies that can be use such as lock in customers and suppliers which means it deter them from switching to competitors, build in switching costs by make customers and suppliers dependent on the use of innovative information system, erect barriers to entry, build strategic IT capabilities means improve efficiency of business practices and lastly leverage investment in IT.
According to Michael E. Porter and Victor E. Miller in the article How Information Gives You Competitive Advantage, they go on to identify three specific ways that the technology affects competition which are it alters industry structures, it supports cost and differentiation strategies and it spawns entirely new businesses. Information technology has a powerful effect on competitive advantage in either cost or differentiation. The technology affects value activities or allows companies to gain competitive advantage by exploiting changes in competitive scope.
In conclusion, the activities that we have done in class really help me in order to understand well about this topic. The topic is about how we want to conduct business and at the same time gain competitive advantages according to the strategies that have been giving.
Resource: ME Porter… - Harvard business review, 1985 - ida.liu.se. How Information Gives You Competitive Advantage
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