A Competitive Advantages In The Global Business

Published Date: 02 Nov 2017

Introduction

IT as a competitive advantages in Global business

In this vast growing business world, competition is something that oraganization cannot avoid. Many business is either make profit or going bankrupt due to a very high level of competition among business in it industry. So organization must have it own competitve advantages in order to survive and sustain in this high competition world, one of the importance element to achieve a competitive advantages is by implement Infomation technology in the business . the world is moving rapidly and firm or organization must move with this rapid moving world.

Organization may have different style and startegies in cempetitive advantages among their competitors, some may have a high resource, some may have different style of management, some may acquire a good material. All of this are a to maximize their profit, reduce the cost and overhead. Acccording to thomas friedman the world now is going flat, we are now in the world is flat 3.0 where the size is from size small to the size tiny, and globalization has cause a high competitive. Firm are force to downsizing and outsourcing in order for the to survive in this high competition global business world. The chairman of general motor stated that the size of General motor in 1990s is half the size of General Motor in the 1980s. This show that many organization have go to downsizing in order for them to survive this high competition.

So for firm to gaining the competitive advantages they have applied information technology as one of the element for compete with the high globalization competition. By applying information technology they have the advantages to compete with their competitors.competitive advantages is one of key factor for organization to suceed, they must have their own competitive advantage, startegies in oder for them to outperformed their competitor "In 1992 the IT and communications sector had grown to close to 10 percent of the gross domestic product in the United States. The computer equipment and services sector alone was larger than auto, steel and mining, petrochemical and natural gas combined." (Don Tapscott, 5). From the statement we know that IT has grown very fast in this global business. The uses of IT in the business world are really important for any organization. With market and their players constantly changing, the possibility of enterprises establishing a sustainable competitive advantage no longer exists. No organization can afford to rest on its laurels, each must constantly innovate to compete.

Objective

To make sure that IT is a main key drive to the organization key success

To develope information technology as a competitive advantages in the global business

IT as a competitive advantages in Global business

To make sure that IT is a main key drive to the organization key success

In this vast moving world where the world is flat or in other world the world become boderless the competiton among organization is high. The level of competiton nowday are different in the early 1980s. The bottom line to a business is profit and the topline is providing value to it customer. A comepetitive advantages is gained by a company providing value to its customers. Each organization using Infomation technology differently, they dont have the same startegy so from the management, the size , the way infomation are use is different. This determines the competitive advantage of each organization. Infomation technology have the potential to improving the customer value either by product or by service. They can improve the customer service, improving communication, improving quality and increasing the number of global reach( Caroline 2007:pg 60)

Information technology can ensure the organization success, this is due to infomation system can help organization in many aspect, for example the Airline Reservation system. In the late 1960s, American airlines develope a rudimentary computerized reservation system called the Semi-Automated Business research Enviroment(Sabre). Sabre capitalized on the advance third-generation computing equipment available at thet time from IBM. American Airlines made an investment of $350 million in sabre but it did not achive profitability intil1983. Today is the wold largest travel agency reservation system, serving 14,000 agent. The system enable agent to provide its customer with airlines,hotel and automobile reservation. This show that infomation technology can help business to improve globally. It help the business to make profit and reduce the overhead and cost. This system help American Airlines to maximize their profit and sabre become one of the valuable asset to american airlines, it becomean importatant marketing force for them.

To develope information technology as a competitive advantages in the global business

IT as a competitive advantages in the global business. Organization nowadays want to go globalize must have a knowlegde in the information technology. IT have become one of the key ingredient for oganization to success. With the world have change dramatically, the cahnaging in the IT have become larger that it suppose to be. It can help organization to gaining it competitive advantage. According to Porter the tool to develope the competitive advantage is the Porter Five Force Model .

According to (Baltzan 5th editon) Porter 5 Forces Model can be divided into 4 items that is bargaining power of supplier, Substitute new product or service, bargaining power of buyer and Potential new entrants. The rivalry of the competitor is at the centre of this 4 item because competition stimulate all the power of all forces within the industry. If we use the porter 5 force model in the retailing industry in america where we refer to the wal-mart. The retail induswtry in america exceed $2 trillion a year. This represent everything that sold directly to customer..

When we talk about the threat of the new entrant in the case of retail industry in America, a new entrant such as discount store start-up is very remote. The start-up would have to compete with the establish stores that have develope the cost efficiency, service and merchindise selection that would make extremely difficult for a new entry to compete. Establish retailer could shift their maket could also give a threat. They could expand their mecrchandise and increase their service level could pose a threat to the discounter. The establish foreign companies such as carefour and tesco also can pose a threat where they decide to invade the U.S market. So thousand of competition exist from day to day that could pose threat to retailing companies in U.S.

When there are many competitors in market the bargaining power of buyer also increase. When they are many competitor exist in the retail market it can cause the increasing of power of the buyer. The buyer will buy from the business that could offer them a better price and value added-service. Individually buyer have minimal power over retailers other than to decide to take their business to another store, they behaviour will determine wheather the retailer will prosperous or falls. Buyer are demanding the righ t combination of quality merchandise, low price,convinience and service. Retailer must deliver what their customer want or they will risk losing them to the competitor that does care about the customer.

The subsitute product also one of the element in the porter 5 forces. As substitute product become available the demand will become elstics. The emerge of home shopping networks and electronic shopping using personal computers at home gives consumer more choice as to waht to buy and where to buy it. They have capture a large percentage of retail market in U.S.

Finally is the bargaining power of supplier. The collaboration between suppliers and customers can be synergized by providing unique and valuable information that require changes to customer’s organization and make the switching cost to other competitor more costly. Organization must understand better on how and when information technology creates dependency between customer and supplier. Oraganization like wal-mart and Kmart are gaining more control toward their supplier. They are demanding and gaining concession in negotiating price, delivery and term from their suppliers. Retailer are demanding that suppliers accept inventory responsibility while providing quick response and short lead-time product delivery.

Conclusion

From the discussion we can see that IT is an important role that can help business to prosper. It help business in every aspect. It can help business gaining its competitve advantage.

Information technology is particularly important because it is pervasive in the process leading to advances in the most other activities. All activities create, transport, disseminate, or use information. Advances in IT have a compounding effect on technological advances everywhere. Accordingly, information technology is exerting a remarkable and profound effect on worldwide competition.

Advancing technology is important because it alters industry structure, shapes and molds competitive forces within and between companies and industries, and thereby changes forever the behaviour patterns of billions of individuals. Technology for its own sake is not important. What is important is its dramatic impact on society as a whole.

As a conclusion, we can conclude that IT as a competitive advantage in global business because it help business to cooperate and to growth a business rapidly fast. Without the help of IT in global business, it is hard for any organization to operate very well. In order to maintain their company, they must fully utilized the available function of IT.