Information technology（二）

ACCA P3考試：Information technology

THE STRATEGIC USE OF IT

Generic strategies

The value chain explains why profits are earned, but all businesses seek competitive advantage, that is, the ability to make above average profits in the long-run. Michael Porter suggests that competitive advantage can be obtained in two main ways:

• cost leadership

• differentiation.

Additionally, each of these generic strategies might or might not make use of a focus strategy. However, the use of IT will not necessarily generate competitive advantage. For example, if the IT being used is package software, almost by definition this will mean that many competitors are likely to be using the same package. It is difficult to see how a package will of itself give a particular company any advantage over its rivals and such IT is likely to be the starting point (threshold capability) rather than a provider of strategic capability.

‘Ordinary IT’ is likely to be everyone’s starting point and the successful company needs to do more – either by using non-standard IT (a unique resource) or by using their IT in a better way (a core competence).

In addition to the generic strategies set out above, IT developments can also offer the possibility of an organisation discovering and setting up an entirely new business opportunity. For example, the internet enabled

Apple to ‘invent’ iTunes, and now legitimate mp3 downloads have overtaken high street CD sales. Similarly, Skype allows very cheap phone calls to be made over the internet and this is a major challenge to traditional telecommunication companies.

The 6‘I’s of e-business

This model is particularly useful when analysing the downstream side of businesses (the marketing, distribution and sales functions) but can also be relevant elsewhere. The 6‘I’s are:

Intelligence	Every click a website visitor makes can be recorded and analysed. If the website asks users to log-in, then a user history can be created
Individualisation	Previous purchases and areas of interest can be recorded and used to give value to the user. For example, travel sites allow users to look up the trips they have booked. Each user gets a tailored service.
Interactivity	For example, website users can browse different products and adjust their purchases （shopping cart） until they are happy.
Integration	Once ordered, the purchases, production and dispatch systems can be triggered automatically.
Independence	It does not matter where the website is physically located. Businesses have become independent of location.
Industry	Industry structures can be changed. Look at how the music business is still trying to come to terms with mp3 technology