Chapter 2: Discussion questions

1)      Suppose you are a manager being asked to develop e-business and e-commerce applications to gain a competitive advantage in an important market for your company. What reservations might you have about doing so? Why?

Using e-business and e-commerce applications to gain a competitive advantage is a very good idea. Doing this I can help my organization grow globally as well as increase the market of our products and services. But if it’s the first time I am using it in the business then I need to be alert and should undergo proper feasibility study of the marketplace because it may backfire. Big markets are not good to experiment at. It takes a huge risk to do so. And also e-commerce and e-business policy may be effective but it might not be the best option for the business I am into. Use of this information technology is profitable for the promotion of those products whose focused customers and users are within the reach of internet and computing facilities. Place and nature of product is very important to consider in order implementing best information technology to implement in order to get the competitive advantage.

As a manager I would have certain reservations about my product’s nature, my customer’s habit and size as well as nature of the market where I am using e-commerce and e-business as a tool for competitive advantage. Because without considering these things, I would not be able to benefit my organization and increase its competitive strength by the use of this sort of information technology. Analyzing all the sources and implementing the best source to gain competitive advantage would be my main concern.

2)      How could a business use information technology to increase switching costs and lock in its customers and suppliers? Use business example to support your answers.

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competitor’s product or going for less profitable business arrangements. Focusing on quality of a product and services to customers and suppliers in a firm’s distribution, marketing, sales and service facilities is the main concerns of this aspect.

For example by maintaining unbeatable quality and providing numerous facilities in its PCs, MAC has been able to lock in its customers and suppliers. This has been possible due to high investments in information technology which facilitates in developing wonderful technology with high quality very distinct features.  Effective communication networks within its user’s, suppliers and organization have also helped the organization to be on top.

3)      How could a business leverage its investment in information technology to build strategic IT capabilities that serve as a barrier to entry by new entrants into its markets?

Information technology helps in making a strong organizational influence in market. Organization makes investment in information technology as per the financial status and necessity of the organization. The benefit of using information technology should always be higher than cost of deploying it so that organization can make the best out of what is used. Organization can use information technology to ensure strategic capabilities of organization which serves as a barrier for new entrants. By making investment on information technology to improve its operations or promote innovation a firm could discourage or delay other companies from entering a market.

 When an organization is doing very well focusing on its costumers and making them happy by using information technology to monitor and backup each and every aspects of organization it becomes hard for others who wants to join the same business. When the one playing in the field is very strong with everything managing so smoothly willing to be players find it hard to prepare themselves with all those sorts of things, so there’s very few chance for new entries. Besides, by using information technology organization can develop new products and services that would not be possible without strong IT capability.

4)      Refer to the Real world case on IT leaders and reinventing IT in the chapter. How would these ideas about the strategic positioning of IT apply to a small company? Do you think a small business would have a harder or an easier time aligning its business and IT organizations? Use an example to illustrate your answer.

IT leaders and reinventing IT is about broadening the scope of information technology from a specific subject matter to inclusive of every aspects of organizational understanding in order to facilitate the managerial process. This is a very fruitful concept which can help organization to increase productivity but it is also very hard to implement because it’s very tough to train everybody about every single procedure and functions of organization.

 Especially in small organizations where budget is minimum and which doesn’t have any definite pattern of performance, it becomes hard to go through this and manage everything as per this concept. For small skill based organization like handicraft business where production as well as sales is limited and there are different small procedures to be performed in order to complete a process. It becomes very hard for manufacturing department to learn about every other aspect, from marketing to service. And such organizations also can’t sustain the high cost of technology, which keeps on changing every next day. Generally in specialized business which is based on human skills it is very hard to apply this emerging concept of reinvention of Information Technology.

5)      What strategic role can information technology play in business process reengineering?

Business process reengineering is about rethinking and radical redesign of business process to achieve dramatic improvements in cost, quality, speed and service. Business Process Reengineering is also about making a strategy of promoting business innovation by making major improvements to business process so that company can become much stronger and successful.

Information technology plays major role in Business Process Reengineering. The speed, information processing capabilities and connectivity of computers and internet technologies can substantially increase the efficiency of business processes, as well a communication and collaboration among the people responsible for their operation and management. Through the use of information technology all the process of business can be brought together in a systematic structure, each process facilitating another process for efficient and effective results.

6)      How can internet technologies help to make a business from strategic alliances with its customers, suppliers and others?

Internet is a very wide network expanded around the world. If an organizations registers its site in an internet and informs all its concerned bodies about the registration, providing them the instructions to enter into it. All of them can come together at one time for the common discussion from the different parts of the world, together forming strategic alliances by sharing ideas and information’s, accessing and retrieving documents stored in internet. An organization can form separate as well as common alliance with its costumers, suppliers and others as per the policy of organization. Such kinds of alliances are very useful to maintain the organization with changing time and scenario.

7)      How could a business use the internet technologies to form a virtual company, or become an agile competitor?

Virtual company is an organization that uses information technology to link people, organizations, ideas and assets. Business organizations develop their virtual companies, and these virtual companies form virtual workgroups and alliances with business partners that are interlinked by internet, intranets and extranets. Through virtual company business organization develops alliances with suppliers, customers, subcontractors, competitors and all the external and internal bodies related with organization, making information sharing more smooth and easy. Business organization can form a virtual company through a strategic alliance of all its major business partners’ facilitating the communication process within the network of internet. Here all the parties get registered in internet and they share their ideas and values to provide a world class solution for customers in order to capture the market opportunity. In today’s growing market it may not always be possible to quickly exploit a new market opportunity by arranging resources to develop the manufacturing and distribution infrastructure, peoples and information technologies so during then virtual company helps an organization to make a quick effort.

Information technology helps an organization to become an agile competitor by supporting the mass customization, offering individualized products while maintaining high volumes of production. Agile companies are so very dependent in internet technologies to integrate and manage business processes, while providing the information processing power to treat masses of customers as individuals.

8)      Refer to the Real world case on Wachovia Corporation and Others in the chapter. How much of the competitive advantage described in the case come from the technology, and how much from the underlying processes developed by the organizations described there? Is one source of competitive advantage more important than other? Defend your answer.

Information technology cannot be effective if it is not synchronized with managerial functions and decisions of organization. Overall productivity of the organization depends upon the performance of all the factors of business process including information technology. Technology does makes the process go fast and reliable, reducing cost of production and increasing quality of products and services, which is very important to gain the competitive advantage but technology alone can’t help organization to take lead in market competition because technology is only one aspect to gain competitive advantage so all the other aspects should be equally strong and competitive to gain competitive advantage in market. Organization comprises of several departments, process and procedures so for an organization to be successful all these things should be managed and functioned effectively.

Actully, all the sources of competitive advantage are linked with each other. One source supports the existence of other. There is nothing like one is important and another is less important. But they could be used differently by different organizations as per the nature of the business. For example for consumer goods producing organization cost leadership may be the important source but for organizations like HP and Sony which deals with technology innovation might be the most important source.

9)      Information Technology can’t really give a company a strategic advantage, because most competitive advantage don’t last more than a few years and soon become strategic necessities that just raise the stakes of the game. Discuss.

When a successful thing comes into the market and when our competitor realizes that our technology is working they soon deploy that technology in their business as well, as a result the next day there comes several products in market similar to ours to replace our products. Copying is a human nature, we can’t avoid this. But it doesn’t mean that technology cannot give competitive advantage to the organization. There is always a privilege of being first. Whatever may come tomorrow but people will always remember the first product as a trend setter. There are several brands of iPods but apple is the synonym to it. And in case of technology, technology keeps on growing everyday. It doesn’t have the end. If others follow our current technology to imitate we can always go for the advancement and develop something new. There is always something new coming up. Partly it is true that after sometime it becomes the necessity that just raise the stake of games but that what is development about. If our folks had thought the same thing after inventing typewriter then today we wouldn’t have been using laptops.

10)  MIS author and consultant Peter Keen says: “We have learned that it is not technology that creates a competitive edge, but the management process that exploits technology.” What does he mean? Do you agree or disagree? Why?

Technology is a human invention. It runs as per the instructions provided by us. There are several technologies available and it’s the management that decides which one to go for by analyzing the need and requirement of the business. Management decides what to use, where to use and why to use so that everything happens systematically in a process. Use of technology enhances the productivity, quality and availability of good and services. Management governs the functioning of information technology in every ways. Sometimes simple technology makes a great impact and sometimes costly and huge technology makes no impact at all. The reason for this is the decision of management about the use of technology. If management understands the technology and provide instructions of operation as per the nature of technology in a right place and right time then the technology becomes useful, if not technology becomes failure. It’s management’s decision that makes a technology effective or useless so I agree with the authors saying.

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