Competitive advantage and strategic information systems

A competitive advantage is statement that identifies business strategies to compete, its goals, and plans and policies that will be required to carry out those goals. Through its competitive strategy, an organization seeks a competitive advantage in an industry.competitve advantage helps accompany control a market and generate larger than average profits.

Most companies use porter’s model to develop strategies to increase their competitive edge.

Now let’s show you porter’s five forces

1)    The threat of entry of new competitors:

The threat that new competitors will enter your market is high when entry is easy and low when significant barriers to entry exist. Like when they open lulu in Nizwa    this leads to loses in small shops like supermarket.

2)    The bargaining power of suppliers:

Supplier’s power is high when buyers have few choices from whom to buy and low when buyers have many choices. So most organization prefer to have more potential suppliers which give them the ability to negotiate price, qulity, and delivery time. For example, lulu and karfour are not friend and they competing in customer satisfaction, each one have suppliers ,they now that to success those  suppliers have to  deliver the products in the right time. This gives suppliers bargaining power.

3)    The bargaining power of customer (buyers):

Buyer power is high when buyers have many choices from whom to buy and low when buyers have few choices.

4)    The threat of substitute products or services

Minds of people changes, your products my substitute with products that have the trend that people want. Today new technologies create substitute products very rapidly.

5)    The rivalry among existing firms in the industry

The threat from rivalry is high when there is intense competition among many firms in an industry. The threat is low when the competition is among fewer firms and is not intense. So you need to watch out, if you see a product that might be substitute for your product .you well need to adjust to the new trend.