18th March Class, Week 4

In Chapter 2, there were 3 learning objectives. Identifying IT responses to different kinds of business pressures, describing strategies that organizations typically adopt to encounter Porter's 5 competitive forces and describing the characteristics of effective business IT alignment. We learnt about competitive advantage and what it is, which refers to when a business stands out in their industry from other competitors, finding a balance between cost, quality and speed. In the business world, there are pressures from different aspects of society which may contribute to how an organization chooses to operate, treat their employees, achieve their objectives, plan their strategies, approach issues(environmental/social), contribute to change, distribute their products, collect information, and adhere to ethical considerations. These pressures can be Business Pressures, Economic Pressures, Technological pressures, Ethical Pressures and Societal or Legal Pressures. Porter's 5 competitive models are:

1. New Market Entrants

2. Supplies(bargaining power)

3. Customers(bargaining power)

4. Substitute products/services 

5. Established Competitors

There are strategies which have been created to help an organization remain competitive in their industry, gain a competitive advantage and overcome the different pressures;

• Cost leader (provide their product for lowest costs)

• Differentiation (offer different products, goods, services)

• Innovation (add new features to existing products and being innovative)

• Operational Effectiveness (more effective methods  in productions services)

• Customer Orientation (Organization is more focused on customers and how to provide better services than their competitors and offer the best experience). 

With the different types of pressures an organization experiences and its different strategies to remain competitive, it is important for the business to align Information technology with these strategies. They can do this by viewing IT as an engine of innovation and  emphasizing to employees that IT is an important part of their culture in order to remain competitive. As an  individual, IT helps one work together with another to respond quickly to business pressures and assists you in contributing to the alignment of the business strategy with the mission, vision, and goals with the IT function. 

Reference 

Gray, H., Issa, T., Pye, G., Troshani, I., Rainer, R. K., Prince, B., & Hugh, J. W. (2015). Management information systems. Wiley.