we will assume that you agree to our January 12, 2021. https://ivypanda.com/essays/information-technology-as-a-competitive-advantage/. if a firm can achieve and sustain overall cost leadership, then it will b… So for a business to get a competitive advantage over its rivals, it has to either perform these activities at a cheaper cost or perform them in such a way that the business will stand out to the extent that customers will not mind paying a premium price in order to get it. According to Croteau and Bergeron (2001); Kearns and Lederer (2000); Zhang and Lado (2001) cited in Garg, Joubert and Pellissier (2005) p.33, mentioned that applications which are support to achieve the competitive advantage referred to as the strategic management information technology and it helps to achieve the best business performance for the organizations. Information Technology as Competitive Advantage vation, and reflected a general optimism concern-ing IT's potential for creating competitive advan-tage. 6. As markets became more liberated, compromises and specializations became more important and up to the mid-20th-century teachings moved towards gaining internal proficiencywithin business analysis. For example, say an organization provides a customized online ordering system to a major client. While there are many competitive advantages such as speed to market, speed of delivery or even price, many can fall away quickly or be replicated by competitors. 4. This is because the customers are the most important people in a business, without them a business will not exist. 1. So what do you need to know in order for your business to succeed? Tesla is a company that produces luxury cars and high tech technology. Competitive Advantage Examples. 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If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda. 2. India started as a cost leader but is moving toward differentiation. Today’s work environment irrespective of type of business model, kind of work, scale of work etc is highly dependent on information technology. "Information Technology as a Competitive Advantage." In as much as IT gives firms a competitive advantage, the main factor in business growth is the value that consumers attach to the products offered. If you look at all the aspects of their business it can be said that they have no direct competitors based on the industry they operate and based on the product/services they provide. An important concept that highlights the role of information technology in competition is the “value chain.”1 This concept divides a company’s activities into the technologically and economically distinct activities … Network effect, economies of … If most of the business’ resources are spent in maintaining their technology, then it is clearly evident that the business is doing the wrong thing and thus is missing out on the benefits that information technology has to offer. The underlying problem in this scenario may be that the process that you are trying to automate was overlooked and indeed it may be flawed. "Information Technology as a Competitive Advantage." What to Do When Disaster Renders a Business Location Unusable, How to Develop a Competitive Strategy Using SWOT Analysis, How to Test and Implement your Business Continuity Plan, How to Be a Successful Trucking Dispatcher, 20 Tips for Buying Medical Transportation Vehicles for Sale, What is that unique thing only your business can offer. Here is a common scenario, you realize the need to use technology to improve your operation, you contact a vendor, the vendor convinces you that you need a particular solution, you purchase it, implement it and it fails. Like all assets, intangible assets are those that are expected to generate economic returns for the company in the future. IT behaves like commodities. Capital. Competitive advantage is a favourable position a business holds in the market which results in more customers and profits. Things that you can do. Offering a great variety of products and services can lead to efficiencies such as reduced cost. We will begin by highlighting two important works from the past two decades. You are free to use it for research and reference purposes in order to write your own paper; however, you must. The database is updated daily, so anyone can easily find a relevant essay example. 5. In today’s economy, a business needs every advantage it can get to stay ahead. Concentrating on IT alone is not as productive as when combined with well supported human resource. Information technology impacts every aspect of a company’s processes and decision making. You can use them for inspiration, an insight into a particular topic, a handy source of reference, or even just as a template of a certain type of paper. The efficiency with which a firm manages its information determines its success in the marketplace. Use software to … Technology provides a strong competitive advantage when it creates a barrier to entry for competitors. To obtain a competitive advantage with information technology requires more than just simply using the technology. A competitor would have to build a matching system from scratch to provide the same benefits, giving the incumbent a strong advantage. Using information technology to gain a new perspective. It provides skilled, technical, English-speaking workers at a reasonable wage. 1. Capabilities. Strategic information is used for gaining competitive advantage and formulating business strategies by organizations. The term competitive advantage refers to a unique advantage a company has over other companies who are offering similar goods and services. The information technology as competitive advantage in the global business could contribute into the capsizing the global market and maximize the profit for the organization. Lowering cost: information technology can help to reduce the cost that a business spends in production. A business needs to use the technology that is available at its disposal to create something that is not only unique but something that their competitors do not have. Within the realms of the business world, pre-20th-century theories of competitive strategy focused on binary outcomes; mainly how to bludgeon markets with monopolies and exclusivity agreements. By answering this question, you will be able to identify the main process that you need to pay the most attention to and the information that is necessary to support these processes. January 12, 2021. https://ivypanda.com/essays/information-technology-as-a-competitive-advantage/. Need a custom Article sample written from scratch by As a long-term asset, this expectation extends beyond one year. Identification and ranking on how information technology might create competitive advantage is the next step of ensuring a company's survival. Q1:->How can information technology support a company’s business processes and decision making, and give it a competitive advantage?Give examples to illustrate your answer Ans.1. IvyPanda, 12 Jan. 2021, ivypanda.com/essays/information-technology-as-a-competitive-advantage/. The system yields a larger competitive advantage, adding value for customers and a substantial rise in their sales. Why are Decision Trees Useful to Managers Who Plan Strategies? The answer comes in … Give examples to illustrate your answer. This article left out the relationship between consumers and Information technology (Powell & Milcallef, 1997). 2021. IvyPanda. Copyright © 2021 Profitable Venture Magazine LLC | All Rights Reserved | See About Us | Contact Us | Privacy Policy | Disclaimer. It brings out the value of human resource and disagrees with the fact that IT can replace humans in firms (Powell & Milcallef, 1997). Creative designs: when new businesses are able to implement new information systems, a lot of businesses go for familiar designs that are similar to what other companies have on ground. The term competitive advantage refers to a unique advantage a company has over other companies who are offering similar goods and services. Once you do this, you will come to realize that there are things you know but there may also be things that you do not know for which you will need to implement an information technology solution in order to tackle. It is affecting the entire process by which companies create their products. IvyPanda. 7. What’s your deadline? Your privacy is extremely important to us. Kellogg School of Management’s Professor Michael J. Mazzeo recently looked into this question in his article “Information for Competitive Advantage—Three Central Issues.”. Thus, you must use information technology in an innovative way if you would want to make a difference in your business. Technology and competitive advantage woul d be regulated by certain complementary elements (Ross, Beath and Goodhue, 1996). Client Segmentation. “If you don’t have a competitive advantage, don’t compete.” – Jack Welch. They include design, bench marking, and IT planning. We will write a custom Article on Information Technology as a Competitive Advantage specifically for you for only $16.05 $11/page. A brand can create a competitive advantage if it is clear about these three determinants: 1. If you continue, Furthermore, it is reshaping the product itself: the entire package of physical goods, services, and information companies provide to create value for their buyers. It may deliver a service or product that is at a lower price, differentiated and mainly concentrates on a demanding market section, or which is innovative. The purpose of the Information Technology Strategic Plan is to leverage information technology to advance the mission of the University, to help achieve the goals identified in the University Strategic Plan, and to shape the future direction for information technology (IT) initiatives to create a competitive advantage for the University. Communication: Rapid communications can help increase productivity, allow for better business … To unravel your competitive advantage, you should ask yourself these three important questions; Anyone of the above questions should be able to give you an idea of your competitive advantage. Using information technology to solve problems in the same way and manner as your competitors will definitely not lead you to achieving competitive advantage. Do you have access to quality IT infrastructure and want to dominate your niche?If YES, here is how to gain competitive advantage using information technology. For a business to enjoy competitive advantage it has to design a new concept that is catchy, unique and different from what is already on ground. Information technology is affecting businesses in three main ways. A working assumption is that information can affect each and every process and that new linkage can be made on the value chain. ⏰ Let's see if we can help you! For example, cloud computing might seem like just a buzzword on everybody’s lips right now, but it’s a concept worth embracing. It gives a means by which a business can outperform its competitors thus giving it competitive advantage. Other business resources are also required. 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