To What Degree Does IT Influence Competitive Advantage?

Seminar Paper , 2003 , 13 Pages , Grade: 1.1

Business economics - Information Management

The world of business has emerged from the industrial age into an information economy and transitioning further into a digital world, a "knowledge society” with information technology (IT1) as driving force behind it. In the past years, the relentless advances of IT in the world of business has been influenced by changing the ways in which corporation execute their daily operations, perform in markets and design their products. Many organisations are faced today with increased competition at a higher performance level driven by globalisation. This is supported by Ward&Peppard (2001i) who states that everyone’s working life and personal environment has been influenced by IT and is becoming an increased integral component. E-commerce and e-business are no longer buzzwords, they have infiltrated our homes via TV advertisement and Internet.
IT is an important factor for today’s organisations, which are forced to continuously re-profile themselves, changing functional hierarchies, and subsequently adapt to a very changing market conditions, effectively and efficiently. Organisation need to quickly and constant respond to customer’s needs and competitive pressure, with IT enabled services, products and distribution channels (Mutsaers,Zee,Giertz,1998ii). The continuous rapid improvement in IT is having a profound impact on competitors and competitive advantage of an organisation.
There is a number of ways of looking at it, however the question here is not, if a company should make use of IT or not. It’s rather, how IT is implemented and subsequent adopted throughout an organisation, which ultimately confers competitive advantage. Every human endeavour in the world of business is influenced by IT, which is reaching across all lines of business globally.

Inhaltsverzeichnis (Table of Contents)

• 1.0 Introduction
• 2.0 Information Technology in the World of Business
  • 2.1 The Value Chain
  • 2.2 Competitive advantage through IT
  • 2.3 Managing IT
  • 2.4 Measuring Value
  • 2.5 Minimise Risk - take new once
  • 2.6 The Barriers to a Successful IT Implementation
  • 2.7 Guiding Principles for an IT strategy
• 3.0 Discussion
• 4.0 Conclusion
• 5.0 References

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This paper explores the impact of information technology (IT) on achieving competitive advantage in the business world. The author aims to analyze how IT influences various aspects of a company's operations, from value chain activities to market responsiveness, and ultimately how it can contribute to success.

• The influence of IT on business operations and competitive advantage
• The role of IT in achieving cost reduction and differentiation
• The impact of IT on various value chain activities, including logistics, marketing, and sales
• The challenges and barriers to successful IT implementation
• The importance of a comprehensive IT strategy for sustainable competitive advantage

Zusammenfassung der Kapitel (Chapter Summaries)

1.0 Introduction

This chapter introduces the evolution of the business world from the industrial age to the information economy, highlighting the growing importance of IT as a driving force. The author discusses the increased competition and the need for organizations to adapt quickly to changing market conditions. The central question of the paper is posed: how does IT implementation and adoption confer competitive advantage?

2.0 Information Technology in the World of Business

This chapter explores the role of IT in various business sectors. It emphasizes the importance of understanding the structure of IT in relation to the business market. The chapter introduces Porter's Value Chain model, which visualizes how IT can influence different activities within a company, leading to cost leadership and differentiation.

2.1 The Value Chain

This section delves deeper into Porter's Value Chain model, highlighting how IT can enhance operational effectiveness across various activities, including procurement, logistics, operations, marketing, and sales. Examples are provided to illustrate how IT can contribute to cost reduction, quality improvement, and increased market responsiveness.

2.2 Competitive advantage through IT

The chapter discusses how companies can gain competitive advantage through IT by generating value for customers and offering superior products at competitive prices. The author highlights the role of IT in automating processes, optimizing logistics, and creating new opportunities for business relationships. Real-world examples are used to illustrate how companies have leveraged IT to overcome challenges and achieve competitive advantage.

Schlüsselwörter (Keywords)

The primary focus of this paper is on the role of information technology (IT) in achieving competitive advantage. Key terms include value chain, cost leadership, differentiation, process innovation, operational effectiveness, e-business, e-commerce, and IT implementation. The paper explores the impact of IT across various business sectors, examining how IT influences different aspects of a company's operations and ultimately contributes to success in a competitive marketplace.

• College: University of Strathclyde
• Grade: 1.1
• Author: MBA Andreas Keller (Author)
• Publication Year: 2003
• Pages: 13
• Catalog Number: V178444
• ISBN (eBook): 9783656004592
• ISBN (Book): 9783656005148
• Language: English
• Tags: what, degree, does, influence, competitive, advantage