Information technology（IT）正在深刻改变我们的生活，已经是大家的共识，在商业领域同样是如此。IT或者information system（IS）正在渗透进入商业的每个角落。它们是如何影响商业活动的？如何运用这些技术获得竞争优势？EssayPhD团队中来自UC Berkeley的CS专业大神，为某位客户订制的information system论文代写，为这个问题做出了解答。
MNG03218 Managing Information Systems-Assessment 1
A Critical Review on Strategic usage of IT/IS to Achieve Competitive Advantage
As we live in an era filled and connected with technologies, we have taken the Information Technology (IT) and Information Systems (IS) for granted for years. Most of the time, we don’t even realize the capabilities of IT and IS than can enable for our daily lives and business activities. There are numerus research and reports from practitioners and academia on the topic of strategic usage of IT and IS to achieve competitive advantage (Bhatt, Grover & Grover 2005, Powell & Dent-Micallef 1997). Especially recently, more researches emerged in the strategic usage of IT and IS among different industries from supply chain industries (Prajogo & Olhager 2012), hotel companies (Bilgihan et al. 2011), outsourcing industries (Lacity & Hirschheim 2012), to cloud computing industries (Garrison, Kim & Wakefield 2012). As discussed in the lecture, competitive advantage means the scarcity of resources that a firm has while the competitors usually do not have.
This paper provides a critical review on different factors that may or may not lead to the completive advantage throughout the usage of IT and IS. Serval examples are given, including Apple, Kodak, Amazon, eBay as examples and cases in successful and unsuccessful usage of IT and IS. By reviewing those cases, serval success factors and failure factors will be introduced. The report later considers other external and internal factors, including culture differences and organisational factors, as key factors that would help achieve competitive advantage. Finally, the paper tends to answer the question how can competitive advantage gained via IS/IT.
Examples of Successful usage of IT/IS
Apple is identified as an example of successful usage of IT/IS.IT Innovation of Apple in Entertainment Industry
As one of the most valuable firm, Apple Inc. (NASDAQ: AAPL), which was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976, has been an innovator in entertainment industry. Even failures like Newton, which was the first PDA made by Apple, and Apple Lisa, which was a personal computer designed by Apple were observed at the early stages of development of the company, Apple has made tremendous innovation, research, and development by applying strategic usage of Information Technology. Among those innovations, the invention of iPod and iPhone completely changed the market share in entertainment industry. iPod shaped the music industry history by digitizing the music and protecting the copyrights (Miller 2011). iPhone changed the way people communicate. The iPhone is so successful that people started to use “iPhonenomics” to describe the market and economy behind the smart phone (Economist 2014). More recently, Apple applied the big data analytics to conduct more personalized recommendation on audio, video, book, and games to targeted customers (Kwon, Lee & Shin 2014). Also, Apple introduced the Apple pay recently, which is a new mobile payment solution. The wearable device Apple Watch is also another way of applying Information Technology strategically. Even Apple receives criticism in labour practices like poor treatment of employees in manufacturing and safety issues (Dean 2007), in environmental destruction (Watts 2011), and other areas, it is still widely considered as one of the most successful firms in the entertainment industry. As of May 2015, Apple is the world most valuable company, which is about $750 billion in USD.
Examples of Unsuccessful Usage of IT/IS
Sony is identified as an unsuccessful example of using Information Technology.
IT Innovation of Sony in Entertainment Industry
Sony Corporation was founded by Masaru Ibuka during the World War II as an electronic store in Japan. Similar with Apple, Sony received global attention after the globalization. As a multi-player in electronics, entertainment, and finance, Sony is also ambitious in dominating the entertainment industry. For example, the television and film production unit of Sony, Sony Pictures Entertainment, Inc. owns 8.3% box office market share in 2015 (Box Office Mojo, 2015). On the other hand, the PlayStation consoles are still very popular among the gamers.
However, as an entertainment industry perspective, Sony was not successful. Sony was the first company who introduced the MiniDisc (MD), which was an advanced data storage device for the music industry, aiming to replace the well-known Compact Disc (CD). However, it appears that it is a “forgotten format” (Faulkner 2012) since not so many customers chose to use that. On the other hand, the digital music, represented by MP3, and Apple’s format, known as ALAC, won the competition. Ironically, it is not because the MD is too simple, it is too complicated to use because the technology was too advanced and customers can get confused sometime (Faulkner 2012). Sony also introduced the well-known Walkman system in the late 1970s. As an iconic system in the 80s and 90s, the Walkman system was a great success at that time. However, Walkman lost the competition again to Apple’s iPod. In my opinion, Sony is still a great company with great intention and dedication to IT innovation. However, they lost the competition with Apple due to the lack of strategic usage of Information Technology. It appears that Sony is fighting for itself (Tabuchi 2012).
Porter's Five Forces Analysis
As a powerful tool to identity the competition between Apple and Sony, Porter’s five forces analysis is provided to further understand the success factors and failure factors of Apple and Sony after the brief introduction. A detailed comparison table is provided in the appendices.
Threat of new entrants
As a leader in music industry in the 80s and 90s, Sony was facing the forces from new entrants, including Apple. As described above, Sony also introduced new service like MD. But the threat of Apple continued to exist. Threat of substitute products or services
There were lots of substitute products or services for both companies, not only thirty years ago, but also nowadays. For example, people can choose to enjoy different formats of music, like Long Play (LP), tape, CD, VCD, DCD, MiniDisc, and Hard Drive, offered by different companies. Nowadays, users can even enjoy the freedom of ubiquitous music screaming service like Google Music, Amazon Music, Pandora, Spotify, and Apple Music. Fierce competition was observed in the industry, and it is a monopolistic competition where there are giants described before, but there are also small service provider who can provide similar service.
Bargaining power of customers
For the music and entertainment industry, the bargaining power of customers are very high due to the competition. Most of the service described above follow a freemium pricing strategy where basic service is provided free of charge, but customers have to pay in order to receive additional service.
Bargaining power of suppliers
The suppliers in both cases, can be identified as the music itself, and the hardware. In terms of the music, the musicians will be the suppliers. Most of the time, we don’t have a lot bargaining power to either Sony or Apple since they set the fixed price for each song or episode. In terms of the hardware, as most of the time they are outsourced to counties in East Asia due to the lower cost, suppliers usually do not have a lot of bargaining power as well. It appears that Sony and Apple usually dominate the value chain in the process of delivering the service and product to the customers.
Intensity of competitive rivalry
Similar to threat of substitute products or services, the competition is fierce in the music industry after the digitalization of the music. Both Sony and Apple are facing local and global competitors.
Five Competitive Strategies
The five competitive strategies for both companies are discussed in the following section.
In this paper, based on the comparison between Sony and Apple by utilizing the Porter’s five forces analysis and five competitive strategies, different level of strategies were observed. Success factors including being agile enough, applying differentiation strategy, and applying the innovation strategy are identified for Apple. On the other hand, lessons learnt from Sony include the importance of IT alignment and being able to change based on the environment.
As the business environment is as complicated as our daily life, we need to consider the IT alignment as a key factor in order to achieve the competitive advantage. Usually it is the technology that fits the business, not the most advanced technology that can bring the sustainable development of the firms. After comparing the Apple and Sony, it appears that making the service and product unique can be another way to achieve that.
Finally, as we live in a world where the usage of technology becomes more and more affordable, we have to be careful in choosing the appropriate technologies to best suit with the business activities.
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