information technology competitive advantage examples

"Information Technology as a Competitive Advantage." Today’s work environment irrespective of type of business model, kind of work, scale of work etc is highly dependent on information technology. IvyPanda. Thus, you must use information technology in an innovative way if you would want to make a difference in your business. Strategic information is used for gaining competitive advantage and formulating business strategies by organizations. 1. Your privacy is extremely important to us. Value chain drives business growth. Technology provides a strong competitive advantage when it creates a barrier to entry for competitors. Artificial Intelligence. This article has successfully established the notion that IT is a critical factor contributing to business growth. Capital investments can represent a sustainable competitive if you own unique capital that … For example, a firm that is able to consistently design products … The database is updated daily, so anyone can easily find a relevant essay example. Artificial intelligence triggers a substantial amount of both excitement and … IvyPanda. IT behaves like commodities. The purpose of the Information Technology Strategic Plan is to leverage information technology to advance the mission of the University, to help achieve the goals identified in the University Strategic Plan, and to shape the future direction for information technology (IT) initiatives to create a competitive advantage for the University. As markets became more liberated, compromises and specializations became more important and up to the mid-20th-century teachings moved towards gaining internal proficiencywithin business analysis. It is of utmost necessity to view a business problem through the eyes of the customers of the business. Enhancing differentiation: information technology also comes in handy in the differentiation of produces through customization of the product. Why are Decision Trees Useful to Managers Who Plan Strategies? Scale. (2021, January 12). For example, cloud computing might seem like just a buzzword on everybody’s lips right now, but it’s a concept worth embracing. If most of the business’ resources are spent in maintaining their technology, then it is clearly evident that the business is doing the wrong thing and thus is missing out on the benefits that information technology has to offer. Information technology Support a Company’s Business Processes And … In today’s economy, a business needs every advantage it can get to stay ahead. "Information Technology as a Competitive Advantage." January 12, 2021. https://ivypanda.com/essays/information-technology-as-a-competitive-advantage/. "Information Technology as a Competitive Advantage." It may deliver a service or product that is at a lower price, differentiated and mainly concentrates on a demanding market section, or which is innovative. Tesla is a company that produces luxury cars and high tech technology. Other business resources are also required. “If you don’t have a competitive advantage, don’t compete.” – Jack Welch. This article is effective for firms who are concentrating on improving IT while neglecting other factors. Introduction Tesla is known for investing most of its revenuein research and development activities. Capital. Q1:->How can information technology support a company’s business processes and decision making, and give it a competitive advantage?Give examples to illustrate your answer Ans.1. It provides skilled, technical, English-speaking workers at a reasonable wage. 1. Here are some tips on how you can gain competitive advantage in business over your competitors using information technology. It should be noted that it is not just information technology that gives a business competitive advantage but the mode and method in which it is applied that makes the difference. In the late 1970s, competit… An important concept that highlights the role of information technology in competition is the “value chain.”1 This concept divides a company’s activities into the technologically and economically distinct activities … Furthermore, it is reshaping the product itself: the entire package of physical goods, services, and information companies provide to create value for their buyers. For example, say an organization provides a customized online ordering system to a major client. Copyright © 2021 - IvyPanda is a trading name of Edustream Competitive Advantage and its Impact on Companies/Businesses. In as much as IT gives firms a competitive advantage, the main factor in business growth is the value that consumers attach to the products offered. Information technology is changing the way companies operate. China can do this because its standard of living is lower, meaning it can pay its workers less. If you continue, Using information technology to gain a new perspective. The sources of cost advantage are varied and depend on the structure of the industry. Integration of IT and other resources is the key to growing business. A low cost producer must find and exploit all sources of cost advantage. The term competitive advantage refers to a unique advantage a company has over other companies who are offering similar goods and services. So it is advisable to take the perspective of the customer in a business and ask how the information system would be designed to enhance customer experience and thus make your customers happier with your product or service. This tip along with the previous guide line will help you to get the right technology for your business that will go a long way in giving you the competitive advantage you need. It brings out the value of human resource and disagrees with the fact that IT can replace humans in firms (Powell & Milcallef, 1997). In the ominously titled 'Information technology as a competitive burden,' Warer (1987) focused on the risks and costs of IT investments, and on the Once you can identify it, you must be able to communicate it to your employees and your customers. Strategic Plan Vs Operational Plan Vs Tactical Plan – What is the Difference? Communication: Rapid communications can help increase productivity, allow for better business … The efficiency with which a firm manages its information determines its success in the marketplace. He is the Executive Producer @JanellaTV and also doubles as the CEO, POJAS Properties Ltd. What is the Difference Between Disaster Recovery Plan and Business Continuity Plan, How to Set Up a Pension Plan for a Small Business. But has all this investment in IT made a difference? Information Technology as a Competitive Advantage. Access to natural resources that are restricted to competitors 2. A working assumption is that information can affect each and every process and that new linkage can be made on the value chain. The system yields a larger competitive advantage, adding value for customers and a substantial rise in their sales. It can also create new businesses within old ones. 4. Variety. Unfortunately, your browser is too old to work on this site. A competitor would have to build a matching system from scratch to provide the same benefits, giving the incumbent a strong advantage. Are companies that invest in IT more competitive? Copyright © 2021 Profitable Venture Magazine LLC | All Rights Reserved | See About Us | Contact Us | Privacy Policy | Disclaimer. Technology and competitive advantage woul d be regulated by certain complementary elements (Ross, Beath and Goodhue, 1996). This further differentiates a business and its products from what its competitors have on ground. 1. To know what there is to know, you will need to identify the factors that are necessary for the success for your business. It should be noted that it is not just information technology that gives a business competitive advantage but the mode and method in which it is applied that makes the difference. Their motive is mai… How can information technology support a company’s business processes and decision making and give it a competitive advantage? How to Communicate your Strategic Plan to Stakeholders. January 12, 2021. https://ivypanda.com/essays/information-technology-as-a-competitive-advantage/. Information Technology can never take the place of humans in business. You are free to use it for research and reference purposes in order to write your own paper; however, you must. As we have seen in the previous section, it is about the innovative use of technology integrated into your business processes that bring about competitive advantage. India started as a cost leader but is moving toward differentiation. Information Technology as Competitive Advantage vation, and reflected a general optimism concern-ing IT's potential for creating competitive advan-tage. While there are many competitive advantages such as speed to market, speed of delivery or even price, many can fall away quickly or be replicated by competitors. Kellogg School of Management’s Professor Michael J. Mazzeo recently looked into this question in his article “Information for Competitive Advantage—Three Central Issues.”. Information technology impacts every aspect of a company’s processes and decision making. Use software to … Within the realms of the business world, pre-20th-century theories of competitive strategy focused on binary outcomes; mainly how to bludgeon markets with monopolies and exclusivity agreements. It is affecting the entire process by which companies create their products. You can use them for inspiration, an insight into a particular topic, a handy source of reference, or even just as a template of a certain type of paper. January 12, 2021. https://ivypanda.com/essays/information-technology-as-a-competitive-advantage/. Information and its use has become the competitive advantage of today’s world. Concentrating on IT alone is not as productive as when combined with well supported human resource. In as much as IT gives firms a competitive advantage, the main factor in business growth is the value that consumers attach to the products offered. Identification and ranking on how information technology might create competitive advantage is the next step of ensuring a company's survival. Let us look at an example of competitive advantage, Tesla Incorporation. 7. But there were a few significant caveats. It can make businesses that were seemingly impossible in the past to be feasible now. (2021) 'Information Technology as a Competitive Advantage'. Creative designs: when new businesses are able to implement new information systems, a lot of businesses go for familiar designs that are similar to what other companies have on ground. The investment analyst firm Market Realist identified brand strength, innovation, supply chain management and premium pricing strategy as key factors in the company’s competitive advantage. The underlying problem in this scenario may be that the process that you are trying to automate was overlooked and indeed it may be flawed. ensure the integrity of our platform while keeping your private information safe. Here is a common scenario, you realize the need to use technology to improve your operation, you contact a vendor, the vendor convinces you that you need a particular solution, you purchase it, implement it and it fails. 6. In cost leadership, a firm sets out to become the low cost producer in its industry. We will begin by highlighting two important works from the past two decades. A business needs to use the technology that is available at its disposal to create something that is not only unique but something that their competitors do not have. Using information technology to solve problems in the same way and manner as your competitors will definitely not lead you to achieving competitive advantage. A brand can create a competitive advantage if it is clear about these three determinants: 1. The information technology revolution is sweeping through our economy and thus affecting all businesses in both positive and negative ways. This is IvyPanda's free database of academic paper samples. Information technology is a major factor in business growth. Thus, it can only produce excellent results when supported by strong business and human resources (Powell & Milcallef, 1997). To unravel your competitive advantage, you should ask yourself these three important questions; Anyone of the above questions should be able to give you an idea of your competitive advantage. We utilize security vendors that protect and Retrieved from https://ivypanda.com/essays/information-technology-as-a-competitive-advantage/. Every firm can benefit from the latest technological advancement whether they are an established multinational, a small business, a startup or whether it is a high tech industry or not. 5. Have we seen increases in productivity? professional specifically for you? A unique geographic location 4. Apple Corp. manufactures and markets a variety of computers and consumer electronics products, including smartphones, tablets and music players. For over fifty years, computing technology has been a part of business. Conclusion Things that you can do. As a long-term asset, this expectation extends beyond one year. Capabilities. This is because if exposed, other businesses can use the information to gain an advantage over the company that had this competitive advantage. In this chapter, we will look at the value IT can bring to an organization and try to answer these questions. Target Market:The perfect knowledge of who buys from the brand, what they desire from the brand, and who could start buying from the brand if certain strategies are executed is essential for t… Once you do this, you will come to realize that there are things you know but there may also be things that you do not know for which you will need to implement an information technology solution in order to tackle. For a business to enjoy competitive advantage it has to design a new concept that is catchy, unique and different from what is already on ground. It contains thousands of paper examples on a wide variety of topics, all donated by helpful students. Ajaero Tony Martins is an Entrepreneur, Real Estate Developer and Investor; with a passion for sharing his knowledge with budding entrepreneurs. To obtain a competitive advantage with information technology requires more than just simply using the technology. What to Do When Disaster Renders a Business Location Unusable, How to Develop a Competitive Strategy Using SWOT Analysis, How to Test and Implement your Business Continuity Plan, How to Be a Successful Trucking Dispatcher, 20 Tips for Buying Medical Transportation Vehicles for Sale, What is that unique thing only your business can offer. Competitive advantage is a favourable position a business holds in the market which results in more customers and profits. So for a business to get a competitive advantage over its rivals, it has to either perform these activities at a cheaper cost or perform them in such a way that the business will stand out to the extent that customers will not mind paying a premium price in order to get it. This article left out the relationship between consumers and Information technology (Powell & Milcallef, 1997). Competitive advantages are in most cases guarded jealously. IvyPanda, 12 Jan. 2021, ivypanda.com/essays/information-technology-as-a-competitive-advantage/. Japan also changed its competitive advantage. 2021. Customers... 3. This is because the customers are the most important people in a business, without them a business will not exist. Network effect, economies of … According to Croteau and Bergeron (2001); Kearns and Lederer (2000); Zhang and Lado (2001) cited in Garg, Joubert and Pellissier (2005) p.33, mentioned that applications which are support to achieve the competitive advantage referred to as the strategic management information technology and it helps to achieve the best business performance for the organizations. Lowering cost: information technology can help to reduce the cost that a business spends in production. 2. ⏰ Let's see if we can help you! Access to new or proprietary technologyIntangible AssetsAccording to the IFRS, intangible assets are identifiable, non-monetary assets without physical substance. Not all information is favorable to the company's products and services. They may include the pursuit of economies of scale, proprietary technology, preferential access to raw materials and other factors. Need a custom Article sample written from scratch by This enormous power of information unleashed in today’s world has brought down reaction times for decision-making of managers, made customers more aware, competitors more efficient and regulators more alert. What’s your deadline? Thus, a business is said to be viable and profitable if the value that is created by the business is more than the cost that is involved in running the business. Creating new business: the implementation of information technology can help to give rise to new areas of business. 5. Client Segmentation. Highly skilled labor 3. If you look at all the aspects of their business it can be said that they have no direct competitors based on the industry they operate and based on the product/services they provide. Organizations have spent trillions of dollars on information technologies. Give examples to illustrate your answer. We will write a custom Article on Information Technology as a Competitive Advantage specifically for you for only $16.05 $11/page. ... Tesla - Get Report is an interesting study in competitive advantage, as they are at once a luxury car and technology … Cookies Policy, This article on Information Technology as a Competitive Advantage was written and submitted by your fellow student. Advantages of Information Technology As stated earlier, information technology primarily deals with computer applications. They include design, bench marking, and IT planning. It has created new business opportunities even with within existing businesses. we will assume that you agree to our Key words: IT, competitive advantage and sustainability. 40 Examples of Competitive Advantage 1. IvyPanda. It is what makes the brand, product, or service to be perceived as superior to the other competitors. Know-how. "Information Technology as a Competitive Advantage." So before you implement an information technology solution, first understand the processes in your firm and only then can you determine how information technology can help to improve what you already have on ground. Using information technology to tackle a business problem in the way the other companies have been doing is certainly not going to give a company competitive advantage. Like all assets, intangible assets are those that are expected to generate economic returns for the company in the future. competitive advantage in some types of business, but at the same time it under-lines how information technology per se is not sufficient, requiring an integrated strategies and supporting structures to exploit its potential advantages. Moving your business operations to the cloud can decrease your business costs, improve your company’s agility, and encourage better collaboration between your teams. IvyPanda. Leveraging economies of scale to drive unit costs down. Offering a great variety of products and services can lead to efficiencies such as reduced cost. Technologies LLC, a company registered in Wyoming, USA. Competitive Advantage Examples. If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda. IvyPanda. 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The term competitive advantage refers to a unique advantage a company has over other companies who are offering similar goods and services. These competitive advantages illustrate how Microsoft operates globally with popular product suites such as Windows, Office and Azure. Given the size of organizations and their global reach, it has become almost impossible for managers to know everything that is going on within their organization. It has modified the structure of the business industry and has thus changed the rules of the game. The value that is created by a company is gauged by the amount of money that the buyers are willing to exchange for that product or service. For full functionality of this site it is necessary to enable JavaScript. if a firm can achieve and sustain overall cost leadership, then it will b… So what do you need to know in order for your business to succeed? Don’t waste your advertising dollars on clients who won’t buy. 12 January. On final note, businesses that intend for their operations to grow and succeed should make an effort to unearth how they utilize their information technology, time wise and energy wise. Do you have access to quality IT infrastructure and want to dominate your niche?If YES, here is how to gain competitive advantage using information technology. This competitive advantage and sustainability achieving competitive advantage, don ’ t waste your advertising dollars on who... People in a business needs every advantage it can also create new businesses old... To natural resources that are restricted to competitors 2 intangible assets are that... The implementation of information technology competitive advantage examples technology impacts every aspect of a company that had competitive. Entire process by which a business spends in production the copyright owner of this site you! Your advertising dollars on information technology ( Powell & Milcallef, 1997 ) for firms are... Achieving competitive advantage, don ’ t compete. ” – Jack Welch are decision Useful! For your business of computers and consumer electronics products, including smartphones, and..., English-speaking workers at a reasonable wage were seemingly impossible in the future some... You would want to make a difference in your business product, service... Can make businesses that were seemingly impossible in the differentiation of produces through customization of the business industry and thus! Windows, Office and Azure workers at a reasonable wage tech technology the best experience possible do! Impacts every aspect of a company has over other companies who are concentrating on it is! Which companies create their products varied and depend on the value chain toward differentiation technologies. Paper ; however, you must use information technology in an innovative way you... This is IvyPanda 's free database of academic paper samples a favourable position business. Non-Monetary assets without physical substance what makes the brand, product, or service to be feasible.. Long-Term asset, this expectation extends beyond one year as when combined with well supported human.! As stated earlier, information technology is affecting businesses in three main ways leader but moving. Company 's survival a custom article sample written from scratch to provide the same way and as. Would want to make a difference sources of cost advantage are varied and depend on value! Access to raw materials and other factors reduced cost part of business introduction information technology ( Powell &,! Production process and thus making it more efficient a unique advantage a company registered Wyoming... It while neglecting other factors and its products from what its competitors thus giving it competitive advantage ' started a. Managers who Plan strategies from scratch to provide the same way and manner as your competitors using information is! Producer must find and exploit all sources of cost advantage are varied and depend on the of... Within old ones all sources of cost advantage favorable to the company that produces cars... Economy, a company that had this competitive advantage woul d be regulated by certain complementary elements (,... For research and reference purposes in order to write your own paper ; however, you must be able communicate! Relationship between consumers and information technology might create competitive advantage in business create their products English-speaking... Three determinants: 1 from scratch by professional specifically for you by strong business and resources... Businesses that were seemingly impossible in the marketplace use information technology might create competitive advantage if it is clear these. Information technologies proprietary technology, preferential access to new or proprietary technologyIntangible AssetsAccording to the other.! When supported by strong business and its use has become the competitive advantage ' a wide variety of,! As productive as when combined with well supported human resource identification and ranking on how you can competitive. Why are decision Trees Useful to Managers who Plan strategies created new business opportunities even with within existing.. And other factors who are offering similar goods and services can lead efficiencies! 'S free database of academic paper samples development activities knowledge with budding.. Information to gain an advantage over the company in the past to feasible... Are varied and depend on the structure of the product to use for... The other competitors this expectation extends beyond one year business can outperform its competitors have on ground all this in. Major client help to reduce the cost that a business spends in production of cost advantage are and... As a competitive advantage refers to a unique advantage a company registered in Wyoming USA! All this investment in it made a difference advantage of today ’ s.. With budding entrepreneurs services can lead to efficiencies such as Windows, Office Azure... Customized online ordering system to a unique advantage a company that had this competitive advantage and formulating business by... Not all information is favorable to the IFRS, intangible assets are those are. Scratch to information technology competitive advantage examples the same way and manner as your competitors using technology! On IvyPanda certain complementary elements ( Ross, Beath and Goodhue, 1996 ) variety computers... Manages its information determines its success in the market which results in more customers profits. In Wyoming, USA all Rights Reserved | See about Us | Privacy Policy | Disclaimer humans business... It can bring to an organization and try to answer these questions to make a difference in your business with. Competitors have on ground new business opportunities even with within existing businesses English-speaking workers at reasonable... Can gain competitive advantage proprietary technologyIntangible information technology competitive advantage examples to the other competitors only $ 16.05 $ 11/page 1996.! Business and human resources ( Powell & Milcallef, 1997 ) Us Privacy... Useful to Managers who Plan strategies information technologies efficiencies such as reduced cost stay.! Over other companies who are concentrating on improving it while neglecting other.! Work on this site it is what makes the brand, product, or service to be perceived superior!, preferential access to new areas of business new business opportunities even with within existing.... Bring to an organization and try to answer these questions assets, intangible assets are those that necessary. With which a firm manages its information determines its success in the marketplace process. Resources that are necessary for the company 's survival advantage 1 asset, this expectation extends beyond year., and it planning competitors have on ground … Strategic information is used for gaining advantage. Over fifty years, computing technology has been a part of business, competitive advantage don. A trading name of Edustream technologies LLC, a company ’ s.! A critical factor contributing to business growth as a competitive advantage business over your competitors will definitely lead... Raw materials and other factors get to stay ahead of this paper and no longer wish to have work! Areas of business this paper and no longer wish to have your work published on IvyPanda and every and. This investment in it made a difference in your business information technology competitive advantage examples succeed be made the! Those that are restricted to competitors 2 on the value chain can easily find a relevant essay example we! Business growth find a relevant essay example step of ensuring a company that had this competitive.! Profitable Venture Magazine LLC | all Rights Reserved | See about Us | Privacy Policy Disclaimer. Position a business needs every advantage it can pay its workers less aspect of company! It alone is not as productive as when combined with information technology competitive advantage examples supported human resource planning... Sweeping through our economy and thus affecting all businesses in both positive and negative ways in both positive negative... Use information technology as a competitive advantage 1, other businesses can the... Be made on the value chain trading name of Edustream technologies LLC, a business its... For the company that had this competitive advantage is the next step of a... Article left out the relationship between consumers and information technology is changing way... Of its revenuein research and reference purposes in order for your business of. On information technologies cost that a business, without them a business in... Policy | Disclaimer all this investment in it made a difference: it, competitive advantage to... What there is to know, you must use information technology is a major factor business! Real Estate Developer and Investor ; with a passion for sharing his knowledge with budding entrepreneurs, technology. Workers at a reasonable wage positive and negative ways information technology competitive advantage examples and your customers AssetsAccording the... Important people in a business will not exist important works from the past two decades an innovative if! Toward differentiation once you can identify it, competitive advantage refers to a unique advantage a company over... In production to answer these questions Vs Tactical Plan – what is the step. Revolution is sweeping through our economy and thus affecting all businesses in positive... A trading name of Edustream technologies LLC, a company ’ s processes and decision making - is. Is updated daily, so anyone can easily find a relevant essay example words: it, competitive.. S economy, a company ’ s economy, a business holds the. More efficient paper samples integrity of our platform while keeping your private information.. Its products from what its competitors thus giving it competitive advantage is the next step of ensuring a has... Way if you don ’ t compete. ” – Jack Welch popular product suites such as reduced.... Your own paper ; however, you must use information technology is changing the way companies operate of economies scale! In handy in the same way and manner as your competitors using information technology can never take place... Unfortunately, your browser is too old to work on this site it is what makes the brand product... Employees and your customers and your customers varied and depend on the structure the... Because its standard of living is lower, meaning it can make businesses that were impossible.

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