Countering Competitive Forces
To stay in business, almost firms worry about their ability
to compete with other firms by using a series competitive forces, such
as substitute products and services, the bargaining power of customers
and suppliers, and the threat on new competitors entering the market.
This table summarize four basic strategies that firm can
pursue to counter the competitive forces:
Customer service representatives can collect valuable information
for the firm when they respond to customer complains or questions. Information
systems can analyze the data to identify the quality of target products
for a particular market or product niche. On this way they would
serve specific market segments more effectively.
New products and services
Information systems have been used to create new products and services
that cannot easily be replicated by competitors. For example, many firms
use the Web cability with the purpose the boundary between your computer's
contents and the rest of cyberspace will be almost imperceptible. Leading-edge
customers, such as Federal Express Corp., are already taking advantage
of that Web capability. Clients can now contact the shipper's IBM mainframe
via the Web and check on the status of their shipments. The boundary between
your computer's contents and the rest of cyberspace will be almost imperceptible.See the first reference link.
Solidifying Relationships with Customers and Suppliers
Information systems can be used to prevent customers from the competitor,
making it costly or inconvenient for them to switch to a rival. For example:
Electronic data interchange (EDI) is the "emerging technology" that's taken the better part of two decades to crawl into the information mainstream. But ongoing changes in hardware, software and management visionalong with a healthy dose of "information superhighway" hypeare finally helping to make EDI the universal business tool its advocates have long promised. EDI, in its purest form, allows organizations to exchange business documentsinvoices, purchase orders, shipping notices and the likevia an electronic network. The idea behind the technology is to help users speed up everyday transactions with business partners and eliminate the mounds of paperwork that can smother an organization. See the seventh link.
Improved Operations and Internal Management
Companies can also gain competitive advantage by performing their business
task more efficiently by improving productivity, reducing cost, or enhancing
the quality of products and service.For example: "A raft of companies are
developing their own forms of electronic money, known as E-cash. E-cash
is money that moves along multiple channels largely outside the established
network of banks, checks, and paper currency overseen by the Federal Reserve.
These channels enable consumers and businesses to send money to each other
more cheaply, conveniently, and quickly than through the banking system."
See the second reference link.
Value chain
Each organization can be presented as a series or "chain" of basic activities
that add value of inputs at each step. That is the concept of the term "value chain". There are five basic operations: primary (
Information Systems Challenges
The concept of “local business” may become less relevant in a global marketplace where customers can communicate internationally through computing technology at home to obtain the best prices and the best quality. When is created international system it poses three chalenges :
The serious goal for many business is the quality of the firm's production and services. Making quality production, firm have economies and more advantages to stay on the market for a long time.
Ways to enhance quality
Transforming organizations: reengineering
The organization with technology is not competitive efficient, or quality oriented without changes in its business process. Sometimes these changes can be accomplished by adjusting and streamlining procedures, often the organization itself must be redisigned to achieve dramatic improvements in cost speed, See the eight link)
Strategy
Problem to be Solved
Solution
1. Low - cost leadership
Competition from firms with comparable products and services at the
same is taking away customers.
Produce products and services at a lower price than competitors without sacrificing quality and level of service.
2. Focus on market niche
Multiple firms are competing for the same market.
Identify a specific focal point for a product or service. The firm
can serve this narrow target area better than competitors and attract a
specific buyer group more easily.
3. Product differentiation
Customers have no brand loyalty, and competitors can lure them away
with lower prices.
Create brand loyalty by developing unique new products that are distinct form competitors' products.
4. Linkage
Customers can easily switch to another firm. Suppliers deliver late
or at unfavorable prices.
Lock in" customers and suppliers, making it difficult for customers
to switch and trying suppliers into a price structure and delivery timetable
shaped by the firm.
)
and support (
) operations:
Inbound logistics (a warehouse) receives and
stores incoming raw materials.
Production (or operations) transforms the raw
materials into products and services.
Outbound logistics (again a warehouse) holds
the inventory of completed products or services.
Sales and marketing sell the product or service.
Service (usually a part
of the production unit) supports the product and keeps in touch with customers.
Underlying these basic
activities are support activities, like administration, human resources and information systems. Both suppliers and customers also have their own value chains.
Quality
Quality like a term have many definitions:
The conformance to specifications of the product. Customer definition
From everyone within an organization - Quality improvement the responcibility of all members of an organization.
Questions
Suggested Essay Topics
References