Sustainable strategic advantage is also known as sustainable competitive advantages. They are required for a company to thrive in today’s global environment.
Sustainable competitive advantages are company assets, attributes, or abilities that are difficult to duplicate or exceed and provide a superior or favourable long-term position over competitors.Creative use of Information system helps organizations to create and maintain better position in marketplace and maximize their strength. Strategic use of Information system as it enables organizations to get competitive advantage and increase it’s market share.
So, I don’t agree with the above statement.Information system is a source of competitive advantages. The advantages of sustainable strategies advantage to be gained from the use of information system are low-cost leadership, product differentiation, focus on market niche, and strengthening customer and supplier intimacy. The well-structured strategic information systems would create a flexible framework to support the organizational capabilities and improve the organizational performance. In addition, the strategic information system offers the opportunity to renovate the current operating environment and create a reliable and flexible platform to obtain the sustainable competitive advantages, get the brand differentiation, optimize the risk management and improve the decision-making efficiency of the company. The use of information system allow organizations to achieve the lowest operation cost and the lowest prices. The classic example is Walmart.
Walmart used a legendary inventory replenishment system called Automatic Store Replenishment (ASR) to operate to send the orders for new merchandise directly to suppliers as soon as consumers pay for their purchases at the cash register. It promises to decrease the number of out-of-stocks while simultaneously reducing store handling costs At the heart of ASR systems lies software that automatically places an order to replenish stocks. It is also an example of an efficient customer response system. Consumer behaviour to distribution and production and supply chains will directly link to an efficient customer response system.
A differentiation strategy delivers products or services that customers perceive to be valuable and different, even unique. Here a company targets customer in smaller, well-defined segments who are willing to pay premium prices. It takes a low volume, high margin approach. The strategy is dependent on products with unique attributes, for example, in terms of quality, sophistication, prestige or luxury. For instance, unique search services by Google such as Google Map. It is a way that makes customer much easier and convenient. The use of Information systems enables a specific market focus, and serve this narrow target market better than the competitors.
Here a company concentrates on serving the needs of a segment or niche of an industry such as a geographical market, type of customer or product line. Focusing is particularly successful when a company possesses intimate knowledge of a market segment. For example, Japanese shipbuilders tend to build high quality vessels at high prices, and at premium prices for the global market. Scandinavian shipbuilders tend to narrow their focus to building icebreakers, cruise ships and other.
Also, Hilton Hotel’s customers information system ( OnQ system ) can analyse detailed data collected on active guests in all its properties to determine the preferences of each guest and each guest’s profitability. A company can also develop strong ties and loyalty with customers and suppliers using information system. Companies use information systems to facilitate direct access by suppliers to production schedules, and even permits suppliers to decide how and when to ship suppliers to specify factories. For example, Amazon will keep tracking of user preferences products purchases, and recommend titles purchased by others to its customers. Strong linkage to customers and suppliers increase switching costs so the consumers will loyal to your firm. However, there are still some shortcomings that need to be improved.
The strategy of low-cost leadership has weakness. A relentless drive to cut costs might compromise value that customers desire. Only competing on price leaves little room for competitive manoeuvrif a competitor finds ways of reducing their own costs e.g.
innovating in its supply chain or finding a substitute product. Also, others company may likely to catch up with uniqueness. As we can see that it will lost its market demand and customers.
To sum up, no company can generate competitive advantage by relying only on primary resources. Information systems is a great driving force that helps a plethora of companies to be globalized. There might be some defectives, however the advantages it provides is indisputable and cannot be disregarded.