Competitive Advantage Information Technology

Posted by Isharose on February 24th, 2018

Competitive advantage is an advantage over competitors that gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices.

Information technology revolution is affecting competition in three ways; It changes industry structure and alters the rules of competition, It creates the competitive advantage by giving companies new ways to outperform their rivals, It spawns whole new businesses, from within a company’s existing operations. There are three types of competitive advantages that companies can actually use. They are cost, product/service differentiation, and niche strategies.

There are some factors on the use of information technology in competitive advantage. The use of information technology to bridge a gap between business people and technical people. The business people should understand about the use of information technology to gain competitive advantage. An information system that can gives the competitive advantage needs at least two things; the system requires an understanding of the business problem and it requires knowledge to use in designing a creative solution of the business problem. A creative design can solve the business problem in a new effective way.

There are four types of strategies used to manage competitive forces such as strengthen customer and supplier intimacy, product differentiation, focus on market niche and low-cost leadership. Information technology can be used to achieve strategic advantage at the industry level for exchanging information or business transactions electronically.