CHAPTER 2: INFORMATION AND COMPETITIVE ADVANTAGES

Thursday, 25 October 2012 

What is actually meant by competitive advantages? Based on McLeod et al (2007), they classified competitive advantages as the used of information to make sure they are standing at the same level as other competitors in the marketplace area. Nowadays, the use of technology has become wider and we can say that everybody is relying on the technology to gain any information. 

According to O’Brien (2003), when the company uses information technology, they need to plan a strategic role of information system in order to make sure that the company is able to get the competitive advantage in terms of developing the product, services and capabilities. Below are five competitive forces mentioned by O’Brien that influences the competition structure:

• Rivalry of competitors within its industry
• Threat of new entrants
• Threat of substitutes
• The bargaining power of customers
• The bargaining power of suppliers

So, in order to make sure that the company can achieve the competitive advantage, they must ensure that all of these aspects are followed: 

• Cost leadership strategy –put the product and services in the lower price.

• Differentiation Strategies – develop new IT features to differentiate the product and services 

• Innovation Strategy – create and develop the new product and services that related to the IT components other than putting the quality as the important things that must be acquired. 

• Growth Strategies – to expand the management of regional and global business by using IT and also must always aware on the demand of current market level. 

• Alliance Strategies – to gain the relationship between the important people like customer in order to develop the information system. 

All of this I have learnt in the HRIS class, but it will be much easier to understand and apply if we can observe it in the real situation. So, it is recommended to have a discussion about the issues that happened in nowadays world as we will be able to identify whether there is any different competitive advantage or not. Besides, by learning about history, we will not repeat the same mistakes that have been done because we already know the negative impact of doing it. (361 words)

References

• McLeod. R, Jr., Schell, P. (2007). Management Information System, Prentice Hall, Inc

• O’ Brien. J. A (2003). Introduction to Information Systems: Essentials for the e-Business Enterprise. New York