Shape Strategy Essay Example | Topics and Well Written Essays - 1250 words

Shape Strategy - Essay Example This kind of technology helps to improve effectiveness, efficiency, productivity, cost, elasticity and service quality of the business entity. IT enabled facilities of the organization help to build up the competitive advantage of the company by providing consumers with superior services. The successful deployment and adoption of IT will enable the company to accomplish success more easily. Five specific areas where IT represents a risk to a company’s competitive advantage: The five risks that the company has to consider during the course of its business are: â€Å"the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products or services, and threats from new entrants† (Mishra, 2012, par. 1). Threat of Entry: The entry of new firms to an industry bring new ability and a need to gain market share that puts stress on costs, prices and the price of investment essential to compete in the market. Microeconomics justifies that profitable industries attract new competition until the downward pressure on costs has forced our all financial profit from the industries. The most obvious sign of a company deteriorating is its failure to address to IT communications, which is the foundation for the break of the efficiency of IT generally. This vulnerability most frequently manifests itself in insufficient environment management tools, unreliable? old hardware etc. The power of suppliers: Powerful suppliers play a significant part in controlling the price of their products and services by charging high cost for limited services, high costs in general, or changing costs according to different customers. Suppliers are powerful if they are capable of charging differentiated price. Leading IT risk units have performed extensive research and have reached the conclusion that organizations which proactively deal with IT risks reap the most profits and benefits. The power of buyers: IT risk most frequently occurs during the breakdo wn of the enterprise business management to help with oversight of IT in some rational governance structure. The threat of substitutes: A substitute product functions similarly to that of the organization’s products but only by a different means. Positive IT risk management creates three competitive advantages for an organization. First, there is fewer firefighting. This permits the enterprise to concentrate on more strategic and productive work. Second, the base is better prepared thus freeing personnel, resources and dollars to focus more on efforts that can increase the price of the product. Third, the project is located in a stronger location than others to charge risk and? therefore? potentially employ chances that others would think too risky. Rivalry among existing competitors: Risk both downside and upside may happen from globalization, emerging technology, data growth, vendor chain complexities, economic ebbs and flows, client expectations as well as compliance suppl ies. Five specific areas in which IT may support or promote a company’s competitive advantage. Threat of new entrants: The increased usage of Information technology globally has many sides to it? one of which makes the threat of new entrants high. Mainly the entry of new firms has been made possible from the transition of wired technology to wireless? and such related facilities. The power of suppliers: Strategic systems have been used to give new facilities to