Using information system to gain competitive advantage

Companies that are able to gain competitive advantage normally have access to resources or use certain resources more efficiently than their rivals which result higher, profitability and growth in efficiency. The use of information systems can be combined by various strategic strategies in the management of competitive forces and thus gain a higher ground in the market than rival companies.  Low-cost leadership is such a strategy where the information systems are intended for achieving lower costs of operations and thus lowest market prices for product and services (Oz, 2009). For instance, a company can incorporate a customer response system that is efficient into the supply chain management system with an aim of connecting the customer behavior to the production, distribution and supply chains. In so doing, it will be possible to reduce the distribution and inventory costs. Another strategy includes product differentiation where information systems can be used to greatly change the convenience of the customers while using the company’s product and services (Oz, 2009). For example, mass customization can be used to offer products that tailored for individual use. This can be done using the same resources for mass production and custom-tailor cloths as per specifications of individual clients.

The information system can also be use to focus on a particular market niche. This can be done through production and analysis of data for sales and marketing techniques that are finely tuned. An information system for a customer with active guest’s detailed data can be used in the provision of tailored services and thus offer loyal customers with more attention and privileges. The information system can also help in strengthening the relationship between the supplier and the customer.  The system is capable of enhancing direct access to schedules of production from the suppliers, and allows suppliers to determine when and how shipping to clients will be done. This gives allowance for better lead times in production process. The strong relationship created brings about higher switching costs and thus increase loyalty to the company’s products (Oz, 2009). Moreover, the internet can be used to access new markets and form a basis for penetrating the new grounds. The internet provides firms with an opportunity to build brands and strong bases for loyal customers, and allows the reshaping of products and services’ package and thus creates buyers’ value. The value chain technique defines certain business activities where a company can apply competitive advantages and the adoption of information system can have the intended strategic impact.  In addition, the company can achieve strategic advantage by collaborating with other firms to come up with standards across the industry for electronic business transaction and exchange of information so that all the participants in the market such standards. The result is increased efficiency which in return reduces the likelihood of product substitution and may also raise the entry costs (Oz, 2009).

Staples

Staples.com is one company that has managed to form a functional business by use of the information system.  The company resulted to online platform for retail business and this has increased intention to close down many of its stores. With the closure of so many stores, the company strategy is to dominate the online business for office supply market (Marks, 2012). By the mid-year 2014, the orders from the online platform had made up about half of the company’s business. The company was providing about 500,000 products on this platform as compared to 100,000 offered in the previous year. The company strategy involved acquiring Runa, a tech firm that deals e-commerce personalization. The company was able to successfully marry its physical stores with its website which enabled using technology to enhance convenience, choice and speed. This has enable the company to focus away from the traditional brick-and-mortar retail business and adopt a massive online expansion strategy whose benefits are evident in its fivefold increase in the volume of sales (Soni, 2014). The company used information technology to achieve price competitiveness in the industry of office supply which is highly competitive.

Speed of transaction seems to be a major achievement of the company which allowed customers to order office supplies as soon as stock is depleted even where they had not planned on replenishing the stock. The log-in in the company’s website enables a customer to re-order using their last orders which allows for quick click for another purchase. It also allows for keyword searches for other products and encourages the customers to buy more so that they can be provided with free shipping services. The customers get their purchases credit to a certain award program and are frequently given coupons for exchange before they complete any transaction. This sets a standard that ensure speed in transaction and allows Staples to remain competitive in the industry (Marks, 2012). The company also ensures that the website uses the same inventory database with the accounting system. This ensures that the site constantly keeps a check on local stores stock levels in order to maintain a coordinated delivery. A very critical aspect of this is how the information system has helped convenience which ensures that instant ordering goes hand in hand with quick delivery. Anything that customers can get from the stores, they can easily find it in the company’s website and will possession almost as fast.  Quick delivery is thus a key for successful integration of the website with the store.  This is helped by Runa a software company, an e-commerce enhancement which tracks the behavior for online shoppers, and offers personalized deals in real time (Marks, 2012).  

The Staples Company developed its policy for Information Management and global Privacy whose purpose is governing how the handling and protection of business, associate and customer information to achieve maximum security (Staples, 2011). The company has in particular taken steps to guard the customer information which include contact information and numbers of their credit cards. To achieve this there is normally an inclusion of sign off and scenarios for information protection policy whose focus is the privacy of customers. This is part of the company’s training program for online code of ethics. The firm also has a committee for Information Protection and Privacy Steering to assist in guiding the development of the program and integration into the business operations.  Since the systems in the company cannot perfectly secure, there is an incorporation of a plan for an all-inclusive crisis response. This plan ensures that in case there is a breach of security so that information falls in the wrong hands, the situation can be handled quickly and in a responsible manner (Staples, 2006).

References

Oz, E. (2009). Management information systems. Boston, Mass: Thomson/Course Technology.42-45

Soni, P (2014). Unlocking Value? Starboard Invests In Staples and Office Depot. Retrieved from: http://marketrealist.com/2014/12/starboard-interested-staples-office-depot/

Marks, G. (2012).Staples' Successful, Uncomplicated Strategy. Retrieved from: http://www.forbes.com/sites/quickerbettertech/2012/05/14/staples-successful-uncomplicated-strategy/#4be46c6cfa56

            Staples, (2011). Our commitment to making a difference for customers, associates and planet. Retrieved from:         http://www.staples.com/sbd/cre/marketing/staples_soul/documents/staples_soul_2011.pdf

Staples, (2006). Staples soul report. Retrieved from: https://www.staples.com/sbd/img/content/soul/pdf/ethics_2006_staples_soul.pdf