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INFORMATION AND THE COMPETITIVE ADVANTAGE-Nueronic.com

INFORMATION AND THE COMPETITIVE ADVANTAGE-Nueronic.com

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Published by Andreas
Information technology, has changed in many ways how business conduct day today transactions, how they collect knowledge from their industry, how they market their products and moreover how they integrate technology into their business in order to gain the competitive advantage
Information technology, has changed in many ways how business conduct day today transactions, how they collect knowledge from their industry, how they market their products and moreover how they integrate technology into their business in order to gain the competitive advantage

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Published by: Andreas on Mar 09, 2007
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Information technology, has changed in many ways how business conduct day todaytransactions, how they collect knowledge from their industry, how they markettheir products and moreover how they integrate technology into their business inorder to gain the competitive advantage.However there several critics that claimthat Information Technology has not been as revolutionary as once thought. It didnot revolutionise they way business is conducted, the basis is still there, andthe traditional ways of conducting business are still there. Informationtechnology, has evolutionised the way business is conduct, it became moreeffective, more specific, but it is not radically transformed.Nicholas G. Carr’s article on Harvard business review, in 2003, and the later hisbook Does IT Matter?: Information Technology and the Corrosion of CompetitiveAdvantage Does IT Matter?: Information Technology and the Corrosion of CompetitiveAdvantage, shed some light onto these issues. Carr (2004), claims that althoughtechnology can be used effectively to provide and advantage over rivals, today it’fails to do so and has become a commodity. All business use technology, and spendmillions on new IT projects and resources that are not as successful as estimated.Technology, although critical to the success of a business, it is common in allsegments and has lost its core function. Services, software and hardware arereplicated by suppliers, hampering innovation and decreasing the strategicimportance of technology.Carr however does not deny that Information can and hasbeen evidently used to provided the competitive advantage, but notes that it’s notwhat technology a business has in its arsenal but how that technology is used, andintegrated into the business processes to create a framework in which IT providesadded value to the company’s business processes.So it is possible for a company touse information technology to gain the competitive advantage as long as itinnovates and embeds information into its business processes and managesinformation as a corporate asset rather than an external resource.Althoughinformation has not changed or revolutionised the way business is conducted, itdid however alter the way businesses operate and has transformed enormously, theindustry structure (M.Porter Competitive Advantage).This was also witnessed withe-commerce. E-commerce and the use of information altered the relationship,between competitive scope and competitive advantage (M.Proter, 1985). E-commercehas radically changed the scope of competition by removing barriers andtransforming transaction from local to national and international level. Moreoverwith the computing power, of today, the internet the software and hardware thatare manufactured, individuals can run their own business from home without havinga front-end but rather a virtual organisation which deals with customers andtransactions over the internet. However this does not mean that companies willgain the competitive advantage by ‘going digital’ and ignoring existingtraditional ways of doing business. Porter (2001) argues that , companies willgain the competitive advantage only if the use the internet/Ecommerce tocomplement their existing business strategies, products and bestpractises.Organisations however have to be careful; the competitive advantage ofthe first mover is today non-existent , and the sheer number of dot com’s signal avery low barriers to entry, thus having new technologies in place, and using e-commerce to lower costs and increase profitability does not create value.(M.Porter, 2001)It is a fact however, that the internet and the general use ofinternet technologies if used correctly can offer the competitive advantage tocompanies. Two factors, determine profitability in this case, the effects onindustry structure in which competitors function and the sustainable competitiveadvantage which one company outperforms the other. (M.Porter, 2001)There are anumber of issues however that companies need to take under consideration,especially the effects of technology on the five forces model and the valueitself. The effects are both negative and positive, and every decision needs to bemeasured against these effects .Moreover, the industry is affected by the power ofbuyers and sellers and the products that are involved.This however shouldn’t be aproblem, eCommerce will not change traditional ways of business but it transforms

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