TOPIC 2: INFORMATION SYSTEM FOR COMPETITIVE ADVANTAGES

Assalamualaikum =)

Hi! For this part, I will explain about Competitive Advantages (CA) and how IS can gain Competitive Advantages. A competitive advantages is about have two organizations or more organizations producing similar products, must compete for profits, increase sales and customer satisfaction. This means that they want to perform than other organizations in the same industry or market conditions appear to be better at higher levels. Other opinion said competitive advantages is defined as the strategic advantage one business entity has over its rival entities within its competitive industry. It will occur when the organization wants to develop or wants to perform their output more than the competitors. So, they will compete to be the best organization and is able to satisfy the customer.

 “IS to support or change enterprise’s strategy (wiseman, 1985)”. The potential usefulness of different kinds of Information System (IS) for environmental management is well recognized (Diez et al, 2009). A competitive advantage is a combination between HR and IS. These components need each other to increase organization profit, reduce problem in task, to improve communication among them (organizations connection with supplier, distribution or customer) and to achieve their objectives.

There are five competitive strategies can be used by organization :

•  Cost leadership
•  Differentiation strategy
•  Innovation strategy
•  Growth strategy
•  Alliance strategy

These strategies must be following by all organization to achieve their goal and profit and also to ensure their survival in the business/market.

Examples such as automobiles company PROTON and PERODUA. They compete for customers. They have the advantage that they use to dominate the local market. For example, the company prefers the comfort of Proton vehicle. So they created a comfortable car to drive with plenty of space. While the preferred PERODUA price than comfort. Prices for PERODUA vehicles is cheap compared PROTON. So, they use their skills to compete with each other for customers and increase the demand for their vehicles. Although different goals but they create a healthy competition.
 According to Horward et al (1999), “believe that if the design and development strategies addressed at the same times, competitive advantages can be obtained”. 

As conclusion, with the competitive advantages, company can measure their performance, can reduce their cost and increase profit, can make long term relationship and network with customer and can get other advantages. It also will make them improve the performance and improve relationship among organizations and workers.

References :

1) H. Russell Johnston, Michael R. Vitale (1988). Creating Competitive Advantage With Interorganizational Information Systems. MIS Quarterly. JSTOR.

2) Daniel Serbanica, 2008, Competitive Advantages by Integrated e-Business in Supply Chains: a Strategic Approach.

3) Chris Laszlo and Nadya Zhexem bayeva, 2011 Greenleaf Publishing Limited, Embedded Sustainability The Next Big Competitive advantage.

4) Michael E. Porter. The Free Press 1985, revised 1998, Competitive Advantage: Creating and sustaining superior performance.

5) Smith, Howard L & Bullers, I Jr William. (1999). A study of strategic information systems design in home health agencies. The Journal of Computer Information Systems, Vol. 6 Issue 2, pp. 10-19.