Strategic Positioning
On the contrary, strategic positioning is very critical to firm to create sustainable advantage and unique approaches. Strategic positioning can be defined as performing different activities from those of rivals or the same activities in a different way (Gallaugher 2010).
IT is critical to the firm’s success and strategic positioning has to be tech-enabled to deliver success. The firm has to build up a set of strategic assets that not only address specific needs of a market but should be extremely difficult for any upstart to compete against (Gallaugher 2010). Therefore, investment in IT can raise barriers to entry for other firms in the competition (O’Brian & Marakas 2009).
A firm can recognize whether it’s strategic differences are special enough to yield sustainable competitive advantage. The resource-based view of competitive advantage can help. According to this view a firm must control a set of exploitable resources that have four critical characteristics:
- Valuable,
- Rare,
- Difficult to imitate, and
- Difficult to substitute (Gallaugher 2010).
Resourse-based strategy can help a firm to avoid entering market carelessly simply because growth is spotted. The telecommunications industry learned this lesson in a very hard and painful way. Telecommunications industry used long-haul fiber-optic cables to transfer data over the internet. However, to meet growing demand some telecom firms began digging up the ground and laying webs of fiberglass. But problems arised when rivals started to doing exact same thing and used another technology called dense wave division multiplexing (DWDM) enabled existing fiber to carry more transmissions than ever before. As a result, these new assets weren’t rare and each day they seemed to be less valuable. True sustainable advantage comes from assets and business models that are simultaneously valuable, rare, difficult to imitate, and for which there are no substitutes (Gallaugher 2010).
Although technology alone cant achieve sustainable compatitive advantage, but a firm can develop some strategies to encounter the threats of five forces. O’Brien et al (2009) pointed out five strategies, such as, Cost Leadership, Differentiation, Innovation, Growth and Alliances strategies. These strategies describe how IT can be used efficiently in a firm to gain competitive advantage. For example, Dell have used cost leadership strategy to build online ordering system and established itself as lowest-cost producer of PC in the market (O’Brian & Marakas 2009).
Apart from above five strategies a firm can use some other strategies and can invest in IT to lock in customers and suppliers, lock out competitors, create switching costs and raise barriers to entry in the market (O’Brian & Marakas 2009).
IT can also be used in a firm to build a customer-focused business, reengineer business process, create a virtual company, build a knowledge-creating company and become an agile company (O’Brian & Marakas 2009).
Conclusion
Although a firm can enter in the market quickly with the help of IT, but it will not sustain in the market without ‘right’ model or competitive strategy. If a firm is not armed with right competitive strategy to counter the threats of five forces , then “IT doesn’t matter” (Carr 2003).
References
Carr, N. (2003),“IT Doesn’t Matter,” Harvard Business Review 81, no. 5.
Gallaugher, J. (2010), Information Systems: A Manger’s Guide To Harnessing Technology, Flatworld Knowledge.
O’Brien, J. A., & Marakas, G. M. (2009), Management Information Systems (9th ed.). New York: McGraw-Hill Irwin.
Part C - Case Study
Read Real World Case 4: "Best Buy, Medstar Health and Unifi: The Challenges and Benefits of Wireless mobile applications" from pages 258-259 of the O'Brien & Marakas text and answer the three case study questions. It is important that you draw from the literature in your discussion.
Question 1
Best Buy Geek Squad is a 24 hours service unit that offers technical support for home or business PC users nationwide. Each Geek Squad agent has a wireless Pocket PC cell phone (“Sprint PCS Vision Smart device PPC-6700”, 2005) that is loaded with Windows Mobile 5.0 and other business software to serve their customer efficiently (O’Brian & Marakas 2009). However, Pocket PC mobile device has some following advantages and limitations (O’Brian & Marakas 2009):
Advantages:
- Each Geek agent can access wealth of information, such as, customer information, computer manuals, etc through Pocket Pc cell phone.
- This phone connects agents to the Head offices’ IT system wirelessly using Internet Explorer. Agent can log on to the Best Buy order system using their mobile from either Sprint or Verizon wireless.
- After serving the customer, agent can update customer information, pricing information, adjusting or quoting new price, process payment, update or enter credit card information, credit card processing for payment, create payment invoice and complete all other transactions on the spot if necessary.
- Obviously Geek agent can also do the customer service using Pocket PC by receiving or answering calls.
- Pocket PC phone is compatible with third generation cellular network (Sprint’s EV-DO) and web-browsing. Therefore, each agent has fast Internet access with high bandwidth (Gallaugher 2010).
- Pocket PC helps each agent to serve up to 3 customers per day.
- Agent can use Yahoo or Google maps on the Web for directions to customer’s home. This way agent can save huge time. They don’t need to ask customer for step-by-step directions anymore.
- Best Buy IT department develops software for Pocket PC mobile phone that specifically supports their business. Company can save huge money and time by not using off-the-shelf software packages available in the market.
- Application for the Pocket PC cell phone is simple and cost-effective.
- Since Pocket PC cell phone can access fast Internet and other applications, an agent doesn’t require carrying Laptop. Obviously this is more convenient and ultimately Pocket PC mobile phone made Best Buy Geek Squad much more efficient.
Limitations:
Pocket PCs feature with small slide-out keyboard which may be numeric or completely qwerty. Keyboards are rubberized and key combinations are required to access certain keystrokes (“Sprint PCS Vision Smart device PPC-6700”, 2005). Another way of entering data is called ‘Stylus’. It’s a software input panel to enter alpha-numeric data. (“Mobile Device Selection Guide”, n.d.). However, both options for entering/typing data on the device is not as easy as on a full-size keyboard. Using such keyboard is very time consuming and Geek agents found this small keyboard is very inconvenient for them (O’Brian & Marakas 2009).
Overcoming Limitations: Best Buy encounters above mentioned challenges by using following strategies:
- The Pocket PC mobile phone is equipped with handwritten recognition software and transcription application (“Mobile Device Selection Guide”, n.d.).
- Geek agents often use handwriting recognition application instead of keyboard or stylus to take notes on their Pocket PCs and input the notes directly into company’s order system (O’Brian & Marakas 2009).
- Geek Squad is trying to develop voice recognition application to over come keyboard problem. This application would open and close orders and auto-dial phone contacts through voice commands. Geek agent will be able to save a great deal of time if Best Buy is able to develop this software successfully (O’Brian & Marakas 2009).
Question 2
Software Challenges: Software that comes with wireless mobile devices typically doesn’t meet company’s needs and requirement and they are often basic software. Therefore company needs to develop their own software that fits in the mobile devices. It’s not so easy to develop software that can access customer records, order systems, inventory management system or videoconferencing through wireless mobile devices. Software must be formatted for display on a mobile device and should have user friendly interface and less need to use small keyboard. Desktop computer has the standard size, but mobile devices come with different shapes and sizes. Therefore software that work efficiently on a mobile device with a keyboard may not work on other wireless mobile phone with a touch screen. Some companies (such as MedStar Health) have policy to let their staffs to pick their own mobile devices. Since there is not technology leader, that is why these companies adopt ‘freedom-of-choice’ approach for mobile devices. This approach is another challenge for their IT department to keep up with new models. Therefore, IT staff need to update, adjust or modify software to keep up with new shape or sizes of mobile devices (O’Brian & Marakas 2009).
Solution to these challenges: MedStar Health and Unifi textiles manufacturer encounter above challenges. Both companies have enough motivation and resources to meet these challenges. They encounter these challenges by following strategies:
- MedStar collaborated with Siemens Medical Solution (Software vendor) to develop mobile software PDAccess. This software can be used in PDA and doctors or nurses can access patient information from a Siemens Invasion mainframe (O’Brian & Marakas 2009).
- Unifi adopted another approach to overcome these challenges. A mobile software may not require all features and functionalities. So they developed mobile application only with those parts that drive the most value. They ported custom-built IT services and support application to staffers’ PDAs (O’Brian & Marakas 2009).
Question 3
Windows Mobile 5.0 operating system supports almost off-the-shelf software available in the market. Although thousands of software packages are available for the wireless mobile devices, but most companies prefer to use their own developed software. The reason is most of the available software simply don’t meet company’s requirements or needs and require lots of customization and patchwork before porting into mobile devices. Almost off-the-shelf software packages are often very basic and are just foundation. Business software vendors offer variety of mobile software, but they hardly meet company’s business needs and lack of the functionality of the desktop versions. Most of RIM (Research in Motions) business partners have their own software to run on their BlackBerry (O’Brian & Marakas 2009).
Using some of the thousands of software packages available for wireless mobile device has following advantages and limitations.
Advantages:
- Off-the-shelf software typically doesn’t require middleware for data synchronization between back-end systems and the devices. But developing mobile software that can access company applications typically requires middleware, such as, RIM’s Mobile Data System or Sybase’s iAnywhere division’s Mobile Solutions. Therefore company who choose to purchase off-the-shelf software can avoid middleware applications and can save some dollars (O’Brian & Marakas 2009).
Limitations:
- Purchasing thousands of third party software can be very expensive for the business and it will not give competitive advantage for the business.
- This third party software will require on going service support from the vendor regular basis that will not be cost effective for the business.
- The functionality of these off-the-shelf applications doesn’t match with the company’s requirements and is often just the foundation (O’Brian & Marakas 2009).
- Third party software may require customization, patchwork and integration that can be done by company’s IT staff. However, its usually a big effort and very time consuming to make an application small (O’Brian & Marakas 2009).
References
Gallaugher, J. (2010), Information Systems: A Manger’s Guide To Harnessing Technology, Flatworld Knowledge.
Mobile Device Selection Guide. (n.d.). Retrieved September 02, 2010, from
O’Brien, J. A., & Marakas, G. M. (2009), Management Information Systems (9th ed.). New York: McGraw-Hill Irwin.
Sprint PCS Vision Smart device PPC-6700. (2005). Retrieved September 08, 2010, from
