INFORMATION AND COMPETITIVE ADVANTAGES

                 A competitive strategy is a broad-based formula for how a business is going to compete, what its goals should be, and what plans and policies will be required to carry out those goals (Porter, 1985). From competitive strategy, the organization seeks a competitive advantage over competitors in some aspect such as cost, quality, or speed. Competitive advantage is at the core of a firm’s success or failure. A strategic information system helps an organization gain a competitive advantage through its contribution to the strategic goals of an organization to increase performance and productivity.

            Strategic management is the technique that an organization can plans the strategy of its future operations. Information technology plays important roles in the most business process. It is function to substantially to increase process of efficiencies. It also plays major role to improving the communication and facilitates collaboration. Therefore, information technology actually can change the way business is compete. IT contributes to strategic management in many ways such as innovative applications; competitive weapons; change in processes; link with business partners; cost reductions; relationship with customer and suppliers; new products; and competitive intelligence.

A strategic information system is any information system that uses to help an organization gaining competitive advantage; reduce a competitive disadvantage; and also meet other strategic enterprise objectives. In order to succeed, a business must develop strategies to counter these forces such as rivalry of competitors within its industry; new entrants into an industry and its markets; substitute products that may capture market share; bargaining power of customers; and bargaining power of suppliers.

            There five competitive strategies which are cost leadership; differentiation strategy; innovation strategy; growth strategy; alliance strategy; and other competitive strategies. Cost leadership strategy is produce products or services at the lowest cost in the industry. Differentiation strategy offer different products, services, or product features. By offering different, “better” products companies can charge higher prices; sell more products, or both. Niche strategy is select a narrow-scope segment and be the best in quality, speed, or cost in that market. Growth strategy was increasing market share, acquire more customers, or sell more products. Alliance strategy is work with business partners in partnerships, alliances, joint ventures, or virtual companies.

            The concepts of IS is important and IT can be used to support a variety of strategic objectives for achieving success. Thus, organizations must establish all aspects of their planning structures based on strategic planning.

References:     Hemmatfar, M. Competitive Advantages and Strategic Information Systems. International Journal of Business and Management. Vol. 5, No. 7; July 2010.