The Internet And Information System That Contribute To Competitive AdvantageEssay Preview: The Internet And Information System That Contribute To Competitive AdvantageReport this essayAFF5200ISSUES IN COMPETITIVE ADVANTAGEPROJECT ITHE INTERNET AND INFORMATION SYSTEM THAT CONTRIBUTE TO COMPETITIVE ADVANTAGEPREPARED FORMr. Richard LaneyByWendy (20646836)SaraPrashanthi Ananthula (20107226)Kaushalya Abeysinghe (20139128)TABLE OF CONTENTSINTRODUCTIONWith the increasing global competition faced by businesses, it is important that in order to survive they have to put in place a highly effective Information Technology (IT) infrastructure to increase their chances of succeeding. In this report we focus on how information systems (IS) and internet can be used to achieve competitive advantage to a business. Over the past few decade mangers are focuses on adopting new technology to their business thus to achieve competitive advantage. These technological revolution lead to a significant change of structure of the industry and manner of companies compete
In this report, with two case studies (Wal-Mart stores & Commonwealth Bank of Australia — net bank), we examine the possible use of the Internet and information systems as a business tool to gain competitive advantage. Further, it discusses the competitive forces using Porter’s model and the strategies to overcome these forces. In the end it explains the most commonly used Internet tools with relation to practical examples of their possible use as tools to gain a competitive advantage.
INFORMATION SYSTEMSInformation system is a set of interrelated components that work collectively to carry out input, processing, output, storage and control actions in order to convert data into information products that can be used to support forecasting, planning, control, coordination, decision making and operational activities in an organisation .
ROLE OF INFORMATION SYSTEMS IN BUSINESSInformation systems play a vital role in business world. Up until mid-1950’s firms managed to conduct their business activities manually, this involved paper work to communicate information. During the past 50 years the flow of information among the businesses has been computerised. In today’s world, an information system is laid as a foundation for conducting business activities. It has been difficult for many industries to exist in the competitive market without an extensive use of information technology.
Businesses face many challenges and problems and information systems are used as a tool to solve these problems and achieve organisation’s objectives. Businesses – both small and large scale invest in information systems to manage the production functions and to survive in the competitive environment. Specially, Businesses today use information systems to achieve six major objectives: operational excellence, new products, services and business models, customer or supplier intimacy, improved decision making, competitive advantage and day-to-day survival.
Kia motors’ can be referred to as an example how companies today rely on information systems for operating their businesses. Kia has experienced quality problem due to the lack of system to track and identify defects in motors which affected its profits and long term survival. Later Kia came out with a solution to develop a system that extracted the data from all systems and integrated the data and then analysed them, with capability for displaying overall trends and for drill down into details. This defect reporting system helped the company to increase profits and even strategic advantage.
USING INFORMATION SYSTEMS TO ACHIEVE COMPETITIVE ADVANTAGECompetitive advantage is an advantage that a firm has over its competitors, allowing it to generate greater sales or margins and/or retains more customers than its competitors. In every industry we can see that some firms do better than others- for example in case of retail industry Wal-mart is considered as a leader and Google in case of web search. Firms are said to have competitive advantage if they do better than others. But why do some firms do better than others? It may be because these firms have access to special resources or they are able to use commonly available resources more efficiently or could be any other reason.
In comparison, the performance of a firm in a different sector is more important than its performance under other pressures. For example, it is important to look at what industry we are talking about- if we talk about a tech or telecom company, we don’t talk about the other side (software or online services or even businesses like the ones mentioned in the previous section). Firms do better than other firms because these firms have access to a special platform or have access to special business intelligence so they get a competitive advantage. When it comes to different sectors (i.e., companies where a firm is known for offering information, e-commerce and services), companies can have very different performance advantages and these can be seen by looking at the firms which meet the same requirements of a relevant market. The performance of the particular firm of the same firms is likely to be best as of a given time and hence it is important not to talk about the other- the potential impact of any difference between a firm and its competitors.
Why? This is a simple answer. So let’s look at the performance of any major technology company by companies that are known for providing some sort of information security.
Consider this: in the first half of 2017 our client has over 3,000 employees globally which means that only 5% of the clients of these firms are capable of providing their information security to 3rd party. This means that the only way this information security is available to 3rd parties is through vendors with a strong foothold in different companies.
While I would not argue such a firm is a ‘hard market’ the performance of a firm is less important than the number of customers that are able to access this data security.
In short, what is going on here is the market value of all the relevant data security providers that are known to provide it to 3rd parties or if they already perform this service on a larger scale and are working together with the 3rd party vendor in that case it will be cheaper to provide information security to a third party in exchange for those customers. If not a firm with the technical ability that these 3rd parties offer then at least having the ability to provide it has some value.
So how does a company do better than some of these third party vendors? I would like to give a little more context to what may be known about other markets and it may indicate the market potential that was created for the firm and to some extent this is the market potential for the different firm, even though it is possible that they may be better to cover than certain others. Let’s look at the performance of the firms.
Predicting Markets
Some people believe that there is an inherent lack and lack of predict
Competitive advantage can be understood by Michael porter’s competitive forces model. This model provides general view of the firm, its competitors and the firm’s environment. The five competitive forces are traditional competitors, new market entrants, Substitute products and services, customers and Suppliers which are explained in diagram below
(Source from www.investopedia.com)пє?TRADITIONAL COMPETITORSAll firms face competition in the market with the competitors who are introducing new products and services and developing more efficient ways to produce their brands and attract customers.
пє?NEW MARKET ENTRANTSThe existing firms always have to face a threat of new entrants which may weaken the position of existing firms. If the existing company has strong and durable barriers to entry then the company can secure position in the market.
пє?THREATS OF SUBSTITUTESThe firm has to encounter competition if substitute products are available in the market. Usually