Sustainable Competitive Advantage and Information Technology - Case Study Example

Running Header: Information Management Student’s Name: Instructor’s Name: Course Code: Date of Submission: Table of Contents Table of Contents 2 Introduction 3 Information Technology use in the Company 4 Sustainable Competitive Advantage and Information Technology 4 E-commerce and Information Technology 5 Supply Chain and Information Technology 8 Conclusion 9 References 11 Introduction Information technology is a key factor in improving the performance of companies. Sustainable competitive advantage, electronic commerce, and supply chain of the company have relationship, which can aggressively turn around the current performance to higher levels. Information technology includes all tools that capture, store, process, exchange, and utilize information. Information system includes IT, people, and procedures and enables a firm to meet essential goals (William, 2004). Information Technology is a set of tools, methodologies, processes, and assorted equipments for collecting, processing, and presenting information. Methodologies include programming/coding, storage and retrieval, systems control, and system design and analysis. However, for the IT to be introduced, managers have a crucial role towards enabling effective IT adoption and introduction. This is through identifying suitable chances to apply IT, ease the way for its successful introduction and adoption, and mitigating its related risks. It is crucial for an organization to realize that IT organization and resource play a key role on projects that sustain the main objectives of the business or company. When IT/IS is used effectively, maximum value is obtained that align with the organization’s strategic needs as well as ensuring processes are well managed and executed. The three types of IT that managers need to adapt towards ensuring efficiency of their organizations include function IT, network IT, and enterprise IT. Information Technology transforms the swiftness of competition of the organization. Information Technology adds value to the organization through cost reduction or revenue increment (Armstrong, 2001). Information Technology use in the Company Sustainable Competitive Advantage and Information Technology Sustainable competitive advantage is the extended gain of putting into practice some special value-creating strategy that are based on special combination of internal organizational resources and capacity that cannot be imitated by competitors. Sustainable competitive advantage is the central position of your company strategy that allows maintenance and improvement of the competitive advantage of the enterprise in the market. This advantage enables or allows organizations survive against its competition over a long period. This is a crucial aspect for our organization that should be adopted. Therefore, managers should undertake all the necessary steps and efforts in ensuring the organization adopts this strategy. In the new economy era, hyper-competition is a key feature whereby new customers want goods and services in a quicker, cheaper, and in their own ways. In the current business world, sustainable competitive advantage requires to be based on corporate capabilities and should be reinvented frequently (Articlesbase, 2009). At Microsoft, Bill Gates built his territory on technological products. He emphasized on the importance of business mastery rather than technical skills. Bill’s competitive urge is a major driving force; Microsoft’s early success was founded on the 7-part competitive strategy of Microsoft. Competitive advantage as the capability of offering better quality customer value on an enduring basis whereby competitors are unable to replicate easily the company’s capability for creating value. However, it is vital to note that competitive advantage arise when the organization’s resources are rarely accessible by its competitors, as they are valuable and inimitable (Gareth & Paul, 2004). Information Technology is an outstanding part of modern business world. It plays a key part in contributing to sustainable competitive advantage through outperforming competitors. However, this has to be incorporated by E-commerce and supply chain of the company. Information Technology has become every organization’s backbone. Information Technology is not only a computer application; however, every organization is aware of its benefits and its implications towards creating sustainable and maintainable competitive advantages. In any organization, Information Technology is utilized through the value chain of activities. This assists the organization towards optimizing and controlling functions of operations for quicker decision-making. However, it is important to note that the capability of the firm to add value is different from its capacity as a source of sustainable competitiveness. For example, Wal-Mart gained a competitive advantage over its rival K-Mart when it adopted purchase/inventory/distribution system. However, this system will be a source of temporary and not sustainable competitive advantage (Njuguna, 2009). E-commerce and Information Technology IT is a major drive towards the success of E-commerce (Electronic commerce) sector. E-commerce has become a key drive towards successful operations of an organization. E-business can also refer to as E-commerce and it can be defined as the conduct of operating business on the internet (Agarwal & Sajan, 2003). However, E-commerce involves not only buying and selling, but also servicing customers as well as collaborating with business partners. E-commerce can be defined as the buying and selling services and products through an electronic medium mainly internet with no paper documents involvement. E-commerce can be categorized into E-tailing or virtual storefronts, gathering and use of demographic data via Web contacts, Electronic Data Interchange (EDI), email and fax, business-to-business selling and buying, security of business transactions. E-commerce can be subdivided into three categories that involve Business to Consumer (B2C), business-to-business (B2B), and consumer-to-consumer (C2C) (Qin 2009). There is need for the organization to adopt the use of E-commerce in its operations; this is towards sustaining its operations and improving its service delivery to customers. E-commerce is one of the factors that will play a great role towards sustainable competitive advantage among other advantages. In order for an organization to stay in touch with fast growing economy, it needs to make the use of e-commerce solutions. E-commerce enables individuals and organizations to build new streams of revenue while creating and enhancing relationships with business partners and customers. E-commerce has no time barrier; one can log to the internet anytime. E-commerce is one of the affordable methods of undertaking business in the current world. It provides Ready-to-use information concerning the services or products on sale. When an organization utilizes e-commerce, it greatly reduces the cost of promotions and marketing. It reduces labor cost and delivery cost and it is viable in all possible means. E-commerce is on time, this is because it informs the consumers about the new products instantly. It saves time for both the suppliers and consumers. E-commerce as part of advancement in information technology assists organization in the overall improvement of its operating efficiencies. Therefore, managers should understand E-business through understanding customers and market fundamentals in which they operate. Manager should also understand clearly how the internet differs from traditional venues for operating business. He should also utilize business models suitable to the internet (Manishrawat, 2010). It is important to understand comprehensively the types of E-commerce. Business-to-Business (B2B) involves exchange of goods and services between businesses through internet or computer networks. It is crucial to note that B2B transactions generate a lot of revenues than B2C transactions by a factor of more than 6 to 1. Web sites in most instances act as private stores for every customer and can be accessed with customer ID and password. It is through internet that products and services are consolidated into single site making them accessible online from any place anytime in the entire world. Organizations are able to manage purchasing functions through websites with E-procurement software allowing companies to make catalogs with search capabilities. Goodrich enterprise is such one company that manages the purchasing process of their consumers through the internet. It has a well-established enterprise customer portal where customers are able to select the products of their choice. Customers search through the internet and order the part they want while updating their status frequently (Qin 2009). Business-to-Consumer (B2C) involves exchange of goods and services between business organizations and individual consumers. Amazon.com is such a company that has experienced great sales with recent annual net income of $476 million on sales of $14.8 billion based on online shopping. This is expected to increase to 16percent by 2011. Consumer-to-Consumer (C2C) involves the exchange of services and goods among individuals with a third party facilitating the process. EBay is an online and shopping website that connects consumers. PayPal is another that involves sending and receiving payments through the internet (Zongqing, 2004). Therefore, the organization should pit all the efforts towards adopting Information Technology system in order to enhance its E-commerce. This will play a key role in placing its products and services in the face of the world. IT will also allow the organizations to be able to explore new business opportunities and markets easily and instantly. Organizations can gain a sustainable competitive advantage through the implementation of build-to-order processes enabling cheap customization of products and services meeting individual requirements. Online advertising through information systems enables companies target consumers in a more cost-effective way compared to traditional print or TV commercial adverts. Through websites, organizations can be capable of capturing data about their consumers, this can be crucial towards reaching for the targeted market segments as well as supporting customer relationship marketing. Website in most instances can be used as an information tool to draw informed consumers into stores as well as attracting suppliers. There is dramatic reduction of delivery time and cost of items delivered through the websites including games, e-books, music, videos, and software (Zongqing, 2004). Supply Chain and Information Technology Supply chain management is concerned with information and products flow between organization members of supply chain. In Supply chain, information technology is used to collect and analyze information. It captures and conveys information required in making excellent decisions within the companies. Its effective use can have some significant impact on the performance of supply chain. Information technology use by an organization assists in restructuring the whole distribution set up in order to achieve higher levels of service while lowering costs of inventory and supply chain. Information technology assists in coordinating activities towards managing the supply chain. An integrated Supply chain model reveals the accommodation of reverse materials as well as information feedback flows. The transaction and communication based on the paper is slow. The information technology has played a key role in supply chain through excellent satisfaction of customer. It has improved ways in which the customer is served in the most effective and efficient manner. Information technology has greatly improved the capability of the managers to reduce human resource and inventory requirements to competitive levels (Bearnon, 1998). Wal-mart is a good example that share point of sale information from its several retail outlets straightforwardly with its main suppliers. Utilization and development of information technology system for the supply chain has various advantages including productivity, improvement and product/market strategies, and cost reduction. Information technology in supply chain is used for processing transactions management control, strategic planning, and decision-making. Information technology plays a key role in computing freight costs as well as analyzing cost and service effectiveness of carrier. Information technology assists in developing new software programme. Ross systems Inc. developed a software programme referred as Supply Chain planning. This is used for replenishment and manufacturing tools for precise scheduling and planning of activities as well as demand forecasting. IT has assisted in introducing a logitility planning solution or programme that has capability of managing the entire supply chain. The adoption of IT and strategic and technological innovations in supply chain will influence how the company sell and buy in the future. Conclusion Information technology is expected to raise higher the performance levels of various organizations. The organizations will find their supply chain integration being extended past their margins. Better planning through IT utilizes the capabilities of the internet towards maximizing the potential for better supply chain management. The use of IT will play a key role in enhancing e-commerce and chain supply, this will definitely improve sustainable competitiveness. E-commerce, World Wide Web, and internet technology will alter the way company does the business. Use of IT improves the performance of the company through the adoption of best and cost effective method of warehousing and shipping the products to the retailers. Information technology improves communication by providing effective and efficient ways of communication through continued improvement of knowledge acquisition, distribution, and interpretation systems. Information technology improves the internal resources and capabilities of companies, which are uncommon and complex for others to copy. Information technology assists firms in provide a comprehensive and resourceful area of research. This provides valuable knowledge crucial in solving problems of the company as well as strengthening the strategies for company’s competitive advantage. Therefore, the manager of a company should put in place all available measures towards ensuring information technology is utilized towards improving the sustainable competitive advantage through an effective supply chain management and use of e-commerce. Supply chain management and e-commerce results to increased efficiency of the working and operations of a company. It is vital for the managers to note that use of IT increases knowledge management that increases awareness, fostering learning as well as increasing innovation and exchange of ideas among the employees. References Agarwal, N. & Sajan, C. (2003). Information Technology and E-commerce. New Delhi: Raj Publ. House. Armstrong, M. (2001). A Handbook of Human Resource Management and Practices. London: Kogan Page. Articlesbase. (2009). Information Technology and Sustained Competitive Advantage. Retrieved January 15, 2011, from http://www.articlesbase.com/strategic-planning- articles/information-technology-and-sustained-competitive-advantage-925286.html Bearnon, B. (1998). Supply Chain design & analysis: Models & Methods. International Journal of Production Economics, 55(4), pp. 281-294. Gareth, H. & Paul, N. (2004). IS-enabled sustainable competitive advantage in financial services, retailing, and manufacturing. The Journal of Strategic Information Systems, 13(1), pp. 29-59. Manishrawat, H. (2010). Importance of e-commerce for 21st century business. Retrieved January 15, 2011, from http://www.myarticle.com/Internet/Ecommerce/importance-of-e- commerce-for-21st-century-business.html Njuguna, J. (2009). Strategic Positioning for sustainable competitive advantage: An organizational learning Approach. Journal of Business Management, 2(1), pp. 32-44. Qin, Z. (2009). Introduction to E-commerce. New York: Springer. William, R. (2004). Management Information Systems. Encyclopedia of Information Systems, 34(6), pp. 115-128. Zongqing, Z. (2004). E-commerce and information technology in hospitality and tourism. London: Cengage Learning. Read More