Strategic Information System: Competitive Advantage Essay

Question:

Discuss about the Strategic Information System for Competitive Advantage.

Answer:

Introduction:

“Competitive advantage is defined in terms of organization is that it focuses on developing better value products and services offered to the customer than the similar products offered by the competitors” (Johnsons, 2009). “The business should take step forward to develop new competitive advantages because this will help the firm to remain ahead of the competition” (Senay, 2011). This process helps in attracting new customers towards the business. There are five competitive forces which should be analysed by the organization to develop competitive advantage. They can be categorised as feeling of rivalry among the competitors in the world of industry, developing of threats due to the new entrant in the competitive world, developing of threats due to the availability of substitute of the product and service within the market, customer bargaining power over the goods and services, ad lastly, the bargaining power of the supplier. To survive in the market of competition, the management should focus on developing the strategies which helps in overcoming the five competitive powers in effective manner.

Examples of successful use of Information system and technology:

The customers can be stick to the organization by providing them better quality services, enhancing relationship. The Rosenblatt international is the travel agency company. They transformed their business by making use of information system and technology. The company use management tools, proprietary application for travel management, and front line support for services. “This service provides the facility to the customer that they can book their ticket at any time and from anywhere” (Belokar, 2012). The result of implementing IT innovation within the organization helps in the growth of sales from $40 million to $ 5billion. The use of information technology not only helps the organization to overcome the situation of threats but also becomes the third largest travel agency of the world.

Success factor:

The strategies which are developed in accordance with the five competitive forces are categorised as cost leadership strategy, innovation, differentiation, alliance, and growth. The description of the strategies and the role of information system is illustrated in the table below:

S. no.

Success factor

Description

1.

Cost leadership strategy

The business makes use of information system to develop the cost effective program in relation with the cost of the product and services. The reduced cost and high quality product attracts the new customers towards the business which results in maximizing the profit of the company. The information system also helps in reducing the cost of business processes implemented in the firm, making use of e-business online program, and reducing the operating cost of the product by introducing the e-procurement system within the organization.

2.

Differentiation strategy

“The information system helps in developing differentiated features in the organization which helps in gaining competitive advantage” (Perkins, 2015). The features which can be introduced within the organization are program of live chatting with the customer, making use of social networking, providing better services program to the customer, the customers get attracted towards the business by getting value added offers, the business should provide services to customer both online and offline medium, and efficiency and effectiveness of the advertising should be measured periodically.

3

Innovation

The information system works on identifying and creating new strategies for development of new products and services which helps in bringing automation in the business processes by making use of digital modelling program and simulation in the design of the product to reduce the cost of the product. New initiative can be taken to transform the business into e-business. The innovation can be bringing in the organization by making use of opportunities and capabilities of internet and telecommunication. For example: combinational innovation and open innovation. In today’s era, the world is transforming their working tactics by making use of innovative trends and technologies by making use of mobile phones, tablets, and laptops.

4.

Growth (Depends on merger and acquisition)

Diversification, expansion, and integration of domestic and international operation in developing product and services. It focuses on building platform for carrying out global operation and establishing of global intranet. It works on developing strategy for both online and offline support.

5.

Alliance

The relationship can be enhanced with partners, suppliers, and customer by making use of information technology.

6.

Niche Strategy

Selection of narrow scope segment in terms of cost, quality, and speed.

7.

Strategy regarding operational effectiveness

The internal business processes should be improved satisfaction of the customer, quality of the product, decreasing time limit, and others. The efficiency can be improved by improving decision making practices.

Examples of Unsuccessful use of Information system and technology:

The Rosenblatt international is the travel agency company. They transformed their business by making use of information system and technology. The company faces many problems of competition in changing the tactics of the organization. The external focus makes the selection of technology tough to be implemented within the firm. “The organization gets associated with the higher risk” Mark, 2011). “The innovation required use of management tools, proprietary application for travel management, and front line support for services” (Andrew, 2009). The use of information technology can creates the situation of threats in gaining competitive advantage.

Lesson Learned:

  • To survive in the world of digital economy, it is necessary to take a step forward in changing the business model and strategies according to the digital innovation, trends and technologies.
  • The information system and technologies helps in gaining competitive advantage to overcome the threat of the organization.
  • Global competition emphasises on price, quality, and service provided to the customer.
  • IT focuses on doing large investment for longer period of time
  • The requirement of establishing large global system is the establishment of infrastructure support for extensive networked computing.
  • The customer can get good quality service for goods and product purchased by making use of information technology

External Factors:

The rapid growth of the dependency on the innovative technology results in the development of innovative processes and technologies. “The systematic innovation in the processes requires the interaction between suppliers and services provided to the customer” (Christini, 2011). The three assets which play a major role in making sustainable competitive advantage are people, sharing of risk and responsibility, and technologies. “The critical factors which are associated with the information system are initiation, collection of the data, formulation of the strategy, and development of short term plan” (Brown, 2011). The external factors are listed in the table below:

S. no

External Factor

Description

1

Market Growth

The collaboration with the opponents results in the development of new knowledge and open paths to the new market

2

Increasing and deficiency of market share

The innovation in the processes helps in suppressing the new competitors arises in the market.

3

Competitive intelligence

The business should take step forward to develop new competitive advantages because this will help the firm to remain ahead of the competition. This process helps in attracting new customers towards the business. IT helps in analysing and collecting information regarding changes required in product, competition, market, and environment.

Internal Factors:

The internal factors which are responsible for implementing information system within the organization are listed below in the table:

S. no.

Internal Factor

Description

1.

Innovation

The innovation can be bring in the organization by making use of opportunities and capabilities of internet and telecommunication. For example: combinational innovation and open innovation. In today’s era, the world is transforming their working tactics by making use of innovative trends and technologies by making use of mobile phones, tablets, and laptops.

2.

The innovation culture for sustaining success

The sustainable program designed for making the organization gained competitive advantage for some period of time. The three assets which play a major role in making sustainable competitive advantage are people, sharing of risk and responsibility, and technologies.

3

Premises needed for increasing the potential of innovation within the organization

IT provides support to change business process for gaining competitive advantage. It also helps in providing better control management to the remote store of the organization. Computer aided engineering tools can be used for streamlining the product design.it also provides information report to the manager or owner of the company in time.

4

New Business models

Creating and applying new business model which can helps in gaining competitive advantage

5

New Market

Innovation opens the path for new market i.e. development of e-business

6

New Product

Requirement of new product to being ahead in the world of competition

7

Extended Product

The existing products should be added with the additional features which are innovative in the market and helps in satisfying the customers requirement

8

Differentiated Products

The information system helps in developing differentiated features in the organization which helps in gaining competitive advantage. The features which can be introduced within the organization are program of live chatting with the customer, making use of social networking, providing better services program to the customer, and others

9

Super-system

Competitive barriers can be overcome by developing the strategies which helps in overcoming the competitive powers in effective manner

10

Inter-organizational system

The organization can be linked with the partners, government organizations, suppliers, customer, and others to remain in contact with them

The internal factors are more important in developing strategies to remain ahead in the competition because it focuses on developing the infrastructure regarding accounting, human resource management, research and development in the developing technology, and procurement. The primary activities which are associated with developing information system in the organization are inbound logistics, manufacturing and testing operations, storage and distribution outbound logistics, marketing and sales and in maintaining the quality of services provided to the customers.

Role of implementing information system within the organization:

The information system helps in supporting changes and innovation in the strategy of the organization. Strategic information system is used for managing information and developing strategic decision for the betterment of the company. The critical factors which are associated with the information system are initiation, collection of the data, formulation of the strategy, and development of short term plan. The factors which are responsible for developing information system for the organization:

  • Development of innovative technology for the organization: The innovative techniques can be developed for achieving strategic and competitive advantage for the business.
  • Competitive weapons: The Information system can play the role of competitive weapon because this can be the tools for developing new technology to remain ahead of the competition.
  • Changes offered in processes: IT provides support to change business process for gaining competitive advantage. It also helps in providing better control management to the remote store of the organization. Computer aided engineering tools can be used for streamlining the product design.it also provides information report to the manager or owner of the company in time.
  • Developing links with business partner: IT provides better connection facility with clients, suppliers, customers, and others from all over the globe.
  • Reduction of the cost: IT helps in reducing the cost of the product. The reduced cost and high quality product attracts the new customers towards the business which results in maximizing the profit of the company. The information system also helps in reducing the cost of business processes implemented in the firm, making use of e-business online program, and others.
  • New Products: IT helps in creating new products. The information system works on identifying and creating new strategies for development of new products and services which helps in bringing automation in the business processes by making use of digital modelling program and simulation in the design of the product to reduce the cost of the product. New initiative can be taken to transform the business into e-business.
    • Competitive intelligence: The business should take step forward to develop new competitive advantages because this will help the firm to remain ahead of the competition. This process helps in attracting new customers towards the business. IT helps in analysing and collecting information regarding changes required in product, competition, market, and environment.

Sustaining Information system in relation with Competitive advantage:

The problem which is faced by the companies is of sustaining of competitive advantage. The strategic Information system is the solution to make the company profitable and sustainable against the competitive forces and threats raises in against of uplifting the company. The sustainable program designed for making the organization gained competitive advantage for some period of time. The three assets which play a major role in making sustainable competitive advantage are people, sharing of risk and responsibility, and technologies. The implementation of information system and technology helps in developing inward system which is not visible to the competitors of the organization, the outward system should be done patent to remain sustained in the competitive world, the company should focus on developing comprehensive, expensive, and innovative system which is difficult to be copied by others and making use of modified approach.

Conclusion:

The business should take step forward to develop new competitive advantages because this will help the firm to remain ahead of the competition. This process helps in attracting new customers towards the business. The business makes use of information system to develop the cost effective program in relation with the cost of the product and services. The reduced cost and high quality product attracts the new customers towards the business which results in maximizing the profit of the company. In today’s era, the businesses is transforming their working tactics by making use of innovative trends and technologies by making use of mobile phones, tablets, and laptops. The internal factors are more important in developing strategies to remain ahead in the competition because it focuses on developing the infrastructure regarding accounting, human resource management, research and development in the developing technology, and procurement. The information system helps in supporting changes and innovation in the strategy of the organization. Strategic information system is used for managing information and developing strategic decision for the betterment of the company. The sustainable program designed for making the organization gained competitive advantage for some period of time.

References:

Johnsons, S. (2009). Strategic information system for competitive advantage. 1st ed. [ebook] Available at: [Accessed 6 Dec. 2016].

Senay, A. (2011). Competitive advantage and strategic information sytem. 1st ed. [ebook] Available at: [Accessed 6 Dec. 2016].

Belokar, R. (2012). Strategic environmental scanning and organization performance in competitive business environment. 1st ed. [ebook] Available at: [Accessed 6 Dec. 2016].

Perkins, J. (2015). Internal and external factors influencing the implementation of information system. 1st ed. [ebook] Available at: [Accessed 7 Dec. 2016].

Mark, S. (2011). IT and competitive advantage. 1st ed. [ebook] Available at: [Accessed 6 Dec. 2016].

Andrew, L. (2009). A review of the strategic use of IT application in achieving and sustainable competitive advantage. 1st ed. [ebook] Available at: [Accessed 6 Dec. 2016].

Brown, V. (2011). Information system for competitive advantage. 1st ed. [ebook] Available at: [Accessed 6 Dec. 2016].

Christini, O. (2011). Competitve advantage and strategic information system. 1st ed. [ebook] Available at: [Accessed 7 Dec. 2016].

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