IS and Competitive Advantages in Organizations
Northern Alberta Institute of Technology
Information systems can help organizations gain competitive advantages in many ways. This paper examines the principle of competitive advantage and how they apply to a particular organization, for example the NAIT bookstore.
There are eight principles of competitive advantage that organizations can use to counter the competitive forces working against them. These different principles are: create a new product or service, enhance products or services, differentiate products or services, lock in customers and buyers, lock in suppliers, raise barriers to market entry, establish alliance, and reduce costs. These principles can be divided by whether they affect the products and services, or via the development of business processes that an organization has. (Kroenke, Gemino, and Tingling, 2010).
The first three principles concern products or services. When attempting to gain a competitive advantage through the product, a company can choose to “create a new product or service, enhance products or services, or differentiate products or services from those of their competitors”. (Kroenke, Gemino, and Tingling, 2010). The company could choose to create a new product or service entirely. If they would like to continue with their current product, they can choose to enhance it; perhaps by lowering the price or improving the quality of the product. Lastly, they can choose to differentiate their product from other comparable products on the market; maybe through better customer service.
The remaining five principles concern the competitive advantage created by the implementation of business processes. Aside from gaining a competitive advantage from alterations to a company’s products and services, they can choose to alter their business processes. They can attain this by locking in their customers and suppliers through contracts, to ensure sustained sales and consistent...