Description
Kyle Wong, our guest speaker, speaks to how his organization integrated differentiation, innovation, and the Internet to gain competitive advantage (INF220 Week Two Information Systems – For Competitive Advantage). Using Michael Porter’s Model of Competitive Advantage, analyze how you feel Pixlee uses information systems for its customers’ competitive advantage. Hint: See the Competitive Advantage Strategies in the “Business Use of Information Systems” chart in the Weekly Lecture. Give examples to illustrate your answer. Provide justification and citations for your points.
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Information Systems – For Competitive Advantage
Competitive advantage is what distinguishes a business from the competition from the
perspective of the customers.
Michel Porter’s Model of Competitive Advantage provides a simple perspective for
assessing and analyzing the competitive strength and position of a corporation or
business organization (Porter, 2004). Porter acknowledged technology’s role as one of
the principal drivers of organizational competition. He positioned that technology plays a
major role in both the structural changes in existing industries as well as in the creation of
new industries (Porter, 1985).
Knowledge Check
Q: Successfully using information systems to achieve a competitive advantage simply
requires purchasing the right technology.
A. True
B. False
A: False. A firm must go beyond just purchasing current technology. The organization’s
business strategies must first be identified and understood. The organization then must
determine how information systems can help achieve business goals.
Applying Porter’s Competitive Strategies to the Use of Information System Strategies
How can information system strategies transform business and impact competitive
advantage?
Michael Porter suggested that businesses can secure a sustainable competitive advantage
by adopting one of four generic strategies:
•
Cost Leadership Strategy – aim to be the lowest cost producer and/or
distributor within the industry.
•
Differentiation Strategy – stand out from the crowd.
•
Niche (Focus) Strategy – cater to the specific needs of a particular segment
(niche) of the market.
•
Stuck in the Middle – no clear business strategy and attempting to do
everything. This strategy is unlikely to a competitive advantage (Porter, 2004).
These very same strategies can be applied in determining how information systems can
support competitive advantage for the organization. Examples of accessing competitive
advantage are identified in the following chart:
You can apply these strategies and examples of using information systems in accessing
competitive advantage in integrating database management systems,
telecommunications and networks, and other information system solutions in your
assignments this week.
Conclusion
Obtaining competitive advantage in using information systems goes well beyond just
purchasing the most current technologies. An organization’s information systems must be
aligned with the organization’s strategic goals. Michael Porter’s generic competitive
advantage strategies provide a good method to assess competitive advantage from the
integration of information system strategies.
References
Porter, M. (1985). Technology and competitive advantage. Journal of Business
Strategy, 5(3), 60-78.
Porter, M. (2004). Competitive advantage: Creating and sustaining superior
performance. Florence, MA: Free Press.
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