Competitive Advantage
September 7 – September 13
Introduction to Competitive Advantage :
oOrganizations may use information technology in creative ways to gain a competitive
advantage. A company gains a competitive advantage by providing a product or service
in a way that customers value more than what the competition is able to do.
oThe textbook reiterates a point it made in the first chapter. Technology is not nearly as
important as what you do with it.
oTo gain a competitive advantage, you need to:
understand the business problem.
understand the available technologies capable of solving a problem.
oA temporary advantage simply means that whatever you do, sooner or later the
competition duplicates what you’ve done, or even passes you with a better system.
oThe fist mover is the company who is first to market with a new IT-based product or
service, may well capture new customers it never gives up, and it often gains additional
benefits by being viewed as an innovative market leader.
Gaining Competitive Advantage with IT Applications:
oBusinesses use four types of important IT applications to gain a competitive advantage
(p. 72):
Supply chain management (SCM)
Customer relationship management (CRM)
Business intelligence (BI)
Integrated collaboration environments (ICE)
oSupply chain management (SCM) tracks inventory and information among business
processes and across companies. An SCM system is an IT system that supports supply
chain management activities by automating the tracking of inventory and information
among business processes and across companies (p. 72).
A well-designed supply chain optimizes the following (p. 74):
Fulfillment – ensuring the right quantity of parts for production or
products for sale arrive at the right time.
Logistics – keeping the cost of transporting materials as low as possible
consistent with safe and reliable delivery.
