Blog 1: Information and Competitive Advantages

Nowadays, many companies are striving to be more competitive in business field. Therefore, information system of the company is one of the key to be successful. According to Pfeffer (1994), an information system can be defined as a combination of people’s activities in organization. The activities are like supporting organization’s operation, management and also decision making in term that people must be connected with the software called system. The information systems are used to connect the people’s activities in the matter of processes, data and technology.

According to A. Taebrejad (2008), Information technology may affect the competitive advantages. This is because information technology is changing the company’s operations. It will change the whole company’s process to create the products. However, organization can achieve sustainable competitive advantages using information technology to fulfill business requirement. Based on survey in Unites State of America, top managers have been asked about the role of information technology in organization success. They believed that more than 79% of information technology had a vital role in organization success.

 

Figure 1 : The Role Of Information Technology Success According To The Top Managers Of Some Companies In The U.S.A

As we know the information technology will affect the competitive advantages. The competitive advantages is one of the strategies in strategic management. These advantages are developed by differentiating an organization in business compared to other competitor’s opinion through stakeholder and customers. From other resource, it stated that the way management manage their people is more important because many sources of competitive success are less powerful. Therefore, companies should develop a different strategy in order to remain the competitive successfully.However, how the companies organize the system to be remain competitive? In business, there are several competitive force that may affect the company’s operations. Thus, company should develop strategies to handle these forces which are:

1) Rivalry of competitors within its industry 
2) New entrants into an industry 
3) Substitute products that may capture market share 
4) Bargain the power of customers 
5) Bargain the power of suppliers 

There are several competitive strategy has been introduced to companies. Which are:

1) Cost leadership
2) Differentiation Strategy 
3) Innovative Strategy 
4) Growth Strategy 
5) Alliance Strategy

All these strategies will help companies to remain their competitive to be more successful by using technology information system. But, it depends on how the companies strategy to organize them either in products, services or capabilities.

References :

1) Jeffrey Pfeffer. (1994). Competitive advantanges through people. American National Standard. USA
2) A.Talebrejad. (2008). The Role and Effect of Organization Technology in the Creation and Maintanance of Sustainable Competitive Advantages. Shahid Beheshti University