The Role of IT in Generating Competitive Advantage - Pfizer - Case Study Example

The Role of IT in Generating Competitive Advantage al Affiliation) Table of Contents Table of Contents 2 0 Introduction 3 2.0 Analysis 4 3.0 Recommendation & Conclusion 7 4.0 References 9 1.0 Introduction Today, the modern society is characterized by the rapid expansion and development of information technology (IT). In addition, the world is depending on information technology on a daily basis to run their activities. Therefore, IT covers all forms of technology that are used to create, use, exchange and store information in various forms. In the field of IT individuals use computers, storage and networking devices and infrastructure to create, exchange, process, store and secure all types of electronic data. In addition, it is common for people to use the term information and communication technology (ICT) as people use and communicate to other people through a network connection (Laudon, & Laudon, 2010). Most organizations use ICT to interact with clients and become competitive in the market. The computer is made up of the hardware, which is the visible and physical part of a computer and the software that includes a set of commands that are understandable to the computer as well as the provision of instructions expected to be done by the computer. The basic principle of the computer is that information or data enters through the computer through an input device that is then processed and transmitted through an output device. Some of the output devices include interfaces like the screen or other electronic device like a storage device or computer network. For businesses to be successful and be effective, it is important for organizations to install information technology. Some of the business applications include databases, transactional systems like the real time order entry, web servers for example, the Apache. In addition, there are systems that manage customers and enterprise resource planning systems. Moreover, computer servers run business applications by interacting with client users and other servers across different networks (Kangas, 2003). In an organization, the IT department is tasked with the management of the organizations IT infrastructure and assets. The IT team relies on the specialized IT knowledge and skills to support the equipment and organizational activities. This paper will look at how Pfizer pharmaceutical company located in New York and spread across the globe is using IT to have a competitive edge over other pharmaceutical companies. 2.0 Analysis Industry Profile Two cousins, Charles Pfizer and Charles Erhart, incorporated Pfizer pharmaceutical in Brooklyn New York in 1849. The company is dedicated on improving the lives of human beings. Moreover, it is dedicated to do research and revolutionary processes and products to meet the customer needs. It is operational in more than twenty countries in the world. In addition, it operates in three business segments that include the healthcare, the animal care as well as the consumer healthcare. The company continues to trade successfully across the globe and recent accounts show the expansion of the business as well as an improved profitability. The company has also enjoyed an increase in the market share. This is seen through the products that are marketed in more than 150 countries around the world. In 2013, the operating profits increased by over 21% of the turnover which is the best result in the recent years. The company is the biggest research based drug maker in the world. This research is what makes the company grow, as they are able to manufacture drugs that are used in hospitals to heal the sick. Pfizer has more than ninety thousand employees worldwide who are committed to working for a healthier world. Strategic goals The strategic goals of the organization include marketing their products in the new international markets by looking at the competitive developments across the world and coming up with products that satisfy customers. In addition, generic drugs are becoming popular therefore making Pfizer manufacture them as they are cheap and are fast moving products. Therefore new products are discovered and developed to improve the health of humans. Consequently, Pfizer has a consumer health care group that aims at making the company to be the most trusted brand in the market. Their products include the over the counter brands used to treat medical conditions that not need a prescription thus Pfizer manufactures a number of prescription drugs available over the counter. Additionally, though Pfizer continues to grow through research and development, the company is in the process of conducting cost effective programs that are effective to counteract the losses the company gets through the expiry of drugs. Moreover, the company is partnering with some companies like GlaxoSmithKline and Bristol to develop the research and development activities. Porter’s five forces model Porter’s five forces model helps companies manage their business operations. This occurs through aiding in the determination of what the companies can do to have a competitive advantage over the existing competitors. For instance, the threats of entry by new or a potential competitor at Pfizer is low as the entry barriers to the industry are high due to the high costs associated with the research and development of new drugs. In addition, the government regulates the industry and the drugs to be manufactured therefore making it difficult for new entrants as the process is tedious and involving and also requires money. Consequently, the degree of rivalry among the existing firms is high. This happens when pharmaceutical companies claim that their products work faster than the competitors. This makes the rivalry between the existing firms to be high due to competition. In addition, the bargaining power of buyers is medium. This is because the medical centers and other health care facilities buy medicine in bulk and apply pressure on pharmaceutical companies to control their prices. Patients have lost the bargaining power of drugs due to the frequent increase in prices. Likewise, the bargaining power of suppliers is low this is because the pharmaceutical industry is only concentrated by a handful of large players therefore decreasing the bargaining power of suppliers. Lastly, the closeness of substitute products is high as the demand for generic products has increased as compared to the original products and this is due to the high costs associated with the brand name. Additionally, the companies that produce generic products do not have a high cost associated with the research and development of new drugs therefore making it possible for them to sell drugs at a cheap price (Burgess, 2002). Generally, this industry is not attractive for new entrants, as it requires a lot of resources in the initial stages. Information system in support of the company’s strategic goals Computers play a vital role in the business environment and information technology will support the strategic goals of Pfizer as well as achieve its competitive advantage by helping in the automation of the industry as well as the business systems. This is because of the extensive use of information system in the manufacture and processing of the drugs. In addition, the use of computers makes it easy for sales person to sell products as they have all the information they need by the click of a button. The kinds of information that can be used include having the knowledge of the discounts to give to customers, the products that are in stock and out o stock as well as the prices of the products. This is an effective way to work as it is easy and effective to communicate to clients at the same time giving them the information they need instantly. Pfizer can also use information system to be competitive as the use of computers has a better cost benefit analysis as the company will have a wider choice of suppliers thus making the company to be competitive in terms of pricing. The use of the internet and the presence of the middlemen can make it easier for the company to buy and sell their products directly to the customer (Laudon, & Laudon, 2010). In addition, Pfizer can engage in electronic marketing, which can help in the creation of brand awareness therefore creating new avenues for the promotion of their products. Moreover, the company can also offer after sales services to their clients. Consequently, the company can also get competitive advantage by offering a reliable and cost effective way of doing business electronically. This is because routine work can be automated and customers can be assisted 24 hour a day. Likewise, the company can use IT to spread business around the world therefore increasing the awareness of the company and the entry into new markets. Moreover, Pfizer may use information to achieve its goals by storing large amounts of information and data. For instance, the company can store and maintain volumes of records and later use them for inventory control, sales analysis, scheduling of resources, payroll accounting as well as the generation of reports to the management. This is because computers are made in such a way that they can keep, maintain, file, sort and arrange as well as update all the important information of the company. This therefore helps the organization in working effectively thus achieving its set objectives. Consequently, information system can improve the productivity of Pfizer. As the office administration tasks and procedures are automated therefore improving the productivity of administration assistants as well as the office clerks. For instance, the administrators can regulate the consumption of the resources in the organization as they can create a tracker to control how resources are used in the office. The company can also use information system to share data and information. The emergence of computer network has made it possible to share information from one person to another. For instance, the employees at Pfizer can use email and the internet to communicate to fellow workmates. In addition, Pfizer can achieve its set objectives through the creation of a website where they can advertise their products; they can make people know the various products they produce and sell (Preston, 2001). Moreover, Pfizer can send personal e-mail to their prospect clients and receive feedback on the company’s products. They can also ask their clients to give feedback on the kind of service they received from the company as well as the challenges they face while using Pfizer’s’ products. It is easy to reach to a wide range of people through the internet as people transact businesses online. This is because today, people use technology to buy and sell products. In addition, the use of information technology provides security to the office information thus unauthorized persons are unable to access the information. In addition, the company can have some security programs to enable the organizations information be confidential and integrity and can only be accessed with the authorized persons (Shin, 2003). 3.0 Recommendation & Conclusion In conclusion, Pfizer is a pharmaceutical company that manufactures and sells drugs to consumers. In addition, the company has diversified and deals with the manufacture of animal medicines. The company does a lot of research to be able to be competitive in the market thus making the company supply medicine to a number of countries in the world. I would recommend organization to embrace and use information systems to be on a competitive edge. Moreover, the use of IT is one of the best tools that organizations can use to advertise and sell its products. It is a good thing that information technology came around because it has made companies become effective in the provision of their services. Employees can use information system to interact with their customers and clients. In addition, the company can get feedback from the customers on the challenges they are facing while using the company’s products. In addition, the creation of a website is an effective tool to make clients aware on the kind of products that the company is dealing with. Information regarding the prices, discounts as well as the products that are available can be gotten from the company’s website. Information technology has made it possible for organizations to meet their goals and objectives. It is therefore important for organizations to embrace technology because it has made organizations become more efficient. Organizations that use information technology have become more successful as they are able to cut down on costs of resources as well as improve the working conditions of employees thus achieving the set goals. 4.0 References Burgess, S. 2002. Managing information technology in small business challenges and solutions. Hershey, PA: Idea Group Pub. Kangas, K. 2003. Business strategies for information technology management. Hershey, Pa.: IRM Press. Laudon, K and Laudon, J 2010. Management Information Systems: Managing the Digital Firm, (11th edn) Prentice Hall Preston, P. 2001. Reshaping communications technology, information and social change. London: SAGE. Shin, N. 2003. Creating business value with information technology challenges and solutions. Hershey, PA: Idea Group Pub. Read More