week 4 Chapter 2 (Organizational strategy)

2.1 Business pressures, organisational responses and IT support

There are three types of business pressures, the first is Market pressures. This is the pressure caused by globalizations resulting in fierce competition between all Businesses with competing products and services. The second pressure is due to technology, which have forced huge amounts of change to the market and resulted in Businesses having to quickly adapt to ongoing changes. Societal, political, and legal pressures is the third Business pressure, this involves the increased spending needed for matters involving ethics and decision making on new and complex issues such as gender/pronoun system changes.

 

Organisational responses involve strategic systems which help Businesses to be most profitable. A costumer focus ensures that their products and services are sold by keeping their customers happy with the organizations purchasing experience. Customizations is an organisational response to attract more customers. Through utilizing E-commerce, organizations access customers all around the world through technology, primarily the internet.

 

2.2 Competitive advantage and strategic information systems

Strategizing for competitive advantage allows Organizations to be more profitable by increasing performance by reaching goals and implementing change. This can be achieved through recognizing Porter’s five competitive forces. These are the risk of new competitors entering the market, the threat of replacement goods or services by competitors, the negotiating power of suppliers, the bargaining power of consumers, and the competition amongst currently operating businesses in the sector.

To counter Porter's five competitive forces and gain a competitive edge, organisations employ one or more of the following five strategies:

1. Cost leadership strategy: Create goods and/or services for the lowest possible price relative to the market.
2. Differentiation strategy: Provide unique goods, services, or attributes to your products.
3. Innovation strategy: Launch new goods and services, give already-existing goods and services additional features, or devise new and inventive methods of manufacturing them.
4. Operational effectiveness strategy: Streamline internal business procedures to enable the outperforming of its competitors in similar business.
5.  Customer-orientation strategy: Putting customers as the primary focus.

 

2.3 Business-IT alignment

Utilizing IT through its comprehensive integration into the mission, goals and strategy of the organisation. Effective utilization consists of six elements:

1. Businesses make sure IT staff members are aware of the company's financial gains and losses.
2. Businesses provide its workers expansive, well-defined objectives.
3. Business and IT specialists are rotated around departments and job roles inside organisations.
4. Businesses cultivate a welcoming and dynamic workplace culture.
5. Businesses see IT as a source of innovation that constantly changes the way they do business.
6. Businesses consider their clients and customer service to be the primary concern.

 

 

Gray, H., Issa, T., Pye, G., Troshani, I., Rainer, K. (2014). Management Information Systems, 1st Australian Edition. John Wiley & Sons Australia.