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THE COMPARISION AND CONTRAST OF THE SOURCES OF COMPETITIVE OF COMPETITIVE ADVANTAGE BETWEEN THE SOFTWARE & COMPUTER SERVICE INDUSTRY AND THE BANKING INDUSTRY IN THE UK

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Introduction

THE COMPARISION AND CONTRAST OF THE SOURCES OF COMPETITIVE OF COMPETITIVE ADVANTAGE BETWEEN THE SOFTWARE & COMPUTER SERVICE INDUSTRY AND THE BANKING INDUSTRY IN THE UK AN ESSAY ON STRATEGIC MANAGEMENT(1B0 3014) PREPARED BY DECEMBER 2008 INTRODUCTION The general environment in which a firm operates is extremely complex. The general environment consists of interrelated elements or forces that can have an impact on a firm's strategic plans of gaining competitive advantage over its competitors. In order to gain strategic position, there must be an in-depth understanding and analysis of the general environment which should be matched with a critical evaluation of a firm's internal capabilities without which opportunities cannot be utilised and threats adequately managed. THE INDUSTRY An Industry can be defined as a group of firms on the same side of the market, which produce goods which are close substitutes and compete for the same markets This essay will be looking to compare and contrast the sources of competitive advantage between the software/computer service industry and the banking industry in the United Kingdom. THE SOFTWARE AND COMPUTER SERVICE INDUSTRY According to the culture UK government website, the activities of firms in this industrial sector consist of the development of system software; contract/bespoke software and turnkey solutions, systems integration, system analysis and design, software architecture and design, project management and infrastructure designs. An example of firm in this industry is ORACLE CORPORATION which specialises in providing Information Technology solutions and advice on Information Management. ...read more.

Middle

The current take over bid proposition by Lloyds TSB of HBOS is a good example because this has resulted in share price appreciation and improved image for the organisation. This explains the fact that every business leans on the growth of the economy. SOCIAL: This relates to the beliefs, values and norms that guide actions and behaviour in the environment in which a firm operates. Failure to pay attention to what the society in which a firm operates belief in and value, will seriously hinder the ability of the firm to gain completive advantage in the market. This explains why most banks are introducing some products to suit some belief. Example is the introduction of Islamic banking by most banks. TECHNOLOGICAL: This has been the most dynamic aspect of today's changing world. A firm that is not up to date with technological innovations, changes and development will be faced out of the market environment (threats) while opportunities will be created for firms that is up to date with technological changes. EVALUATING THE FIRMS INTERNAL CAPABILITIES The resource based theory perspective looked at the company from inside-out. It emphasises that a firm utilizes its resources and capabilities to create a competitive advantage that ultimately results in superior value creation. This perspective highlights the need for a fit between the external marketing context in which a company operates and its internal capabilities. RESOURCES: Resources are the firm specific assets such as capital useful for creating a cost or differentiation advantage and that few competitors can easily acquire. ...read more.

Conclusion

It is not only important for a firm to gain competitive advantage; it must ensure that is sustained. This is the focal point of competitive strategy Sustaining competitive advantage allows the maintenance and improvement of the business competitive position in the market. It is the ability to sustain the competitive advantage gained that will allow the firm to survive over a longer period of time in today's world of active competition. In order to continue to be competitively positioned, a firm should build its sustainable competitive advantage on its corporate capability which represent its strength and must constantly reinvent it to eliminate any threat which may develop thereof. CONCLUSION In conclusion, It can be seen that the activities of both firms to focus on customers satisfaction and exploiting opportunities in the volatile market environment has brought about new forms and sources of competitive advantage in terms of: * Offering greater differentiation through product innovation * Altering competitive scope through providing increased focus upon customer relations * Lower cost in a number of areas through focused customer service (e.g. Marketing, Segmentation, etc) It is therefore important that the firm wishing to gain competitive advantage engage in constant innovation and heavy investment in research and development because marketing activities in today's world has shifted from product or service oriented to customer oriented. Customers are more interested in the ability of the product or service to satisfy their desire than what the product or service is. ...read more.

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