The Contribution of Technology to Competitive Advantage

Topics: Strategic management, Value chain, Michael Porter Pages: 5 (950 words) Published: September 26, 2013
THE CONTRIBUTION OF TECHNOLOGY TO COMPETITIVE ADVANTAGE (Theodore W. Schille)

According to Schille..
“An essential component of managing technology is recognizing the role that technology plays in the competitive success of a firm in a free market economy, and acting to ensure that technology decisions and policies contribute to the firm’s competitive advantage.” DEFINING COMPETITIVE STRATEGY AND COMPETITIVE ADVANTAGE

Traditional approach to strategy..
Emphasizing goals and developing means to match the firm’s resources with opportunities in the external environment and deciding where to compete. Three levels
Corporate Strategy
Competitive Strategy
Functional Policies

Corporate Strategy
Concerned with the overall purpose and scope of the business to meet stakeholder expectations. , there is the multi industry-business firm, the conglomerate or the diversified firm, of which there are many examples, such as General Electric. At this level, corporate strategy addresses issues such as choosing which industries or businesses to be in, utilizing portfolio management techniques to achieve a balance among the industries or business chosen, andin the case of diversified firm achieving synergy among the industries or business chosen. •Competitive Strategy

Concerned in the division level of a multi-industry business. •As Michael E. Porter said
Essentially, developing a competitive strategy is developing a broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals. •Functional Policies

Basically the functions of the firm such as engineering, manufacturing and production, marketing, sales, service, personnel and human resources, purchasing, accounting, finance, planning, etc. Concerned on the structure the organization, allocating resources, and rewarding people. CHARACTERISTICS OF COMPETITIVE STRATEGY

Top management responsibility
There must be organization wide participation in both its formulation and implementation. Information must be communicated upward regarding the capabilities and competencies, the strengths and weaknesses, of the firm in order for a feasible competitive strategy to be formulated, and once a competitive strategy has been formulated, it must be implemented through policies and decisions made in all the functional activities of the firm.

Long term phenomenon
“There is a long-term need for stability and a short term need for continual updating in response to evolutionary changes in the environment. But what is long-term can vary from industry to industry, depending on its internal dynamics. “ •Competitiveness

--the ability to get customers to choose your product or service over competing alternatives on a sustainable basis. It include factors of free and fair market conditions, standard of living and maintaining or expanding the real income of its citizens. •For a business to be competitive, it must possess..

Sustainability
a discussion of profits and the tradeoff with growth and market share is useful. Profitability
profits must be maintained at least at some threshold level in order to sustain the competitiveness. Customer Focus
Begin to focus on customers not on the organization for they determine competitiveness. COMPETITIVE ADVANTAGES
A product to be competitive in the market must have:
Low Price
Quality (Reliability and performance)
Availability
Customer Service
Attractiveness
Awareness
Stability
Other socio-psychological or political-ideo­logical factors.

SHOPPING AROUND
Highly applied to customers.
How they chose products based on its competitiveness on the market.

GENERIC COMPETITIVE STRATEGIES
Low Cost Leadership
Achieving the lowest cost position possible in each and every operation of the firm. •Differentiation
Uniqueness of a product or service s perceived by a customer, which leads to prefer it over competing alternatives. •...
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