Management of Information Technology Research
Every company is informed about the special benefits, effects, implication, and the role of information system in its capacity to acquire competitive advantage. Indeed, in any business, information technology is applied through various value chain activities that assist the company to control and optimize functions of operation in the company. This makes the process of decision making easier. In addition, companies use information system as a competitive weapon to influence their performance and the processes that guarantee smooth coordination of corporate, technological advancement and business strategies. The current report will use the Microsoft Company to illustrate the impact of information system on businesses and their relationship to globalization. In addition, the report will describe and identify imperative features of Microsoft company used by the managers use and build information systems successfully. The report also shows the SWOT analysis of Microsoft Company basing on the frame of Porter’s five forces model.
William Gates founded Microsoft in 1975. The company has a mission of enabling individuals globally to realize and make use of their full potential. The company has worked towards achieving this mission by innovating technology that influences the way organizations and people play, work, and communicate. Their products deliver very many opportunities to corporate enterprise and individual businesses. In addition, the company’s businesses are even distributed all over the globe. Indeed, it has established offices in more than 100 nations.
The company makes profits through various ways. It licences, develops, and offers support to services, software and hardware parts globally. In fact, its windows division provides the window operating system (Michael 2009). The company also provides web services and applications such as windows service suites, among other services. Their products are sold to businesses and consumers. The main products of the company are operating system of ubiquitous window PC and Office application suits. The latter suits are sold to customers through companies that make personal computers such as Lenovo, Acer, Hewlett-Packard, Dell, and Toshiba.
The aforementioned companies pre-install the Microsoft software on the personal computers before the customers buy them. In addition, the company also sells its services and products online by use of resellers and other middle traders. Other products offered by the company include company applications such as Microsoft dynamics, Xbox (which is a video game console), storage and server software, and Zune (a digital music player). Furthermore, the company produces software for phones. In fact, the company is acquiring the business of Nokia’s handset (Michal & Eleonora 2006).
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Microsoft Company is aware of its competitors. It faces the threats of other companies joining the industry and setting up similar business, which can pose competition to the company. This may result into reduced profit margins. The company, therefore, makes use of the porter’s model to enhance its competitive strategy by identifying the major forces that influence its profitability index in the information system industry.
The information system industry has various companies that influenced by the Michael Porter’s five forces. Microsoft Company uses the framework to know the strategic move to be put in place by the managers of the company. This is done to maintain an edge over their competitors. Through the model, Microsoft Company understands better where it lies in the industry of information system. It can, therefore, adjust and fit itself effectively in the industry. As a result, the company has developed their information systems that offer competitive advantage, but still maintaining the core concepts of porter’s five forces model.
- Firstly, the company makes uses of the concept of rivalry among its competitors. It takes various forms such pricing of its products, introduction of new services in the market, advertising of their services and differentiation of its products such as the Window suits. The higher the rivalry, the lower the profits received by companies (Frederik, 2009). Therefore, Microsoft incurs expenses in a bid to achieve a competitive edge over its competitors. As a result, the company has adapted different types of computer programmes and software to enhance the overall customer services offered.
- Secondly, the company uses the concept of threat to entry. The company hinders entry of other firms through increasing investment and developing efficient strategies of pricing. This is done to prevent new entries of other companies in the market. For instance, the company has developed massive systems of e-businesses to hinder entry of other firms.
- Thirdly, the company makes use of the buyer’s bargaining power. For the company to keep the power of the buyers low, it implements information systems that solidify their position among the buyers. In furtherance to the latter mentioned concepts, the company makes use of bargaining power of the suppliers. High Supplier power a flipside of buyer’s power that is low. The company makes use of Just in time (JIT) strategy to make sure that services are delivered to the consumer within the shortest time possible. Through its integrated and faster system, the buyers can alert the Microsoft service providers when a service is over (Diez &McIntosh 2009).
- Finally, the company creates a competitive advantage over the other companies. Information system in the company has influenced the way the company prices its goods and how it differentiates them. It uses information system to change the scope of its competitors.
Role of information system in the Microsoft Company
Through information system, the company is able to differentiate itself through product innovation, pricing, and customer services. This gives the company an advantage over the other competitors. Through E-mails, and customer’s communities, the company receives feedback from its clients on how to improve on its products. By differentiating, the company gets information on how to establish its brand (Pita, Cheong & Corbitt 2008).
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Reduction in cost
The company uses IT in reducing its costs of processing, transmitting, and obtaining information. This has changed the way the company engage in business. Information systems reduce the cost of business operation, marketing, and advertising. Through IT, the company gets cheaper channels of distribution and effective means of promoting its products.
IT helps the company experiment with new services, products, and processes in the market. Furthermore, IT reduces the distribution time of information (Bhatnagar 2006). This leads to less product cycle of time.
Information system used in the company has enabled it expand its customer share and market share base. The latter has led to its quick development of geographical market globally and nationally. Moreover, information system has assisted the company to enhance its relationship with customer through effective marketing strategies, shorter time of delivery and innovation of new channels.
Conclusion and analysis
Microsoft Company makes use of information system to vary and differentiate its products and services from its competitors. Through IT, the company has achieved a strategic edge over the competitors. The company still obtains superior returns over its competitors who are less adept. In terse, despite the fact that, every company can purchase IT services in the market place, IT has numerous advantages to companies. Companies should make use of information system to differentiate, price, and innovate new technologies and products in the market. This enhances their growth and development globally.
Bhatnagar, A 2006, Strategic information systems planning: Alignment of ‘IS/IT’ Planning and BusinessPlanning, Unitec New Zealand.
Diez, E &McIntosh, B. S 2009, A review of the factors which influence the use and usefulness of information systems. Environmental Modelling & Software, Vol.24, No. 5, pp. 588-602.
Frederik, A 2009, Towards a conceptual reference model for project management information systems.International Journal of Project Management, Vol. 27, No. 1, pp. 19-30.
Michael, P 2009, Value chain framework of Michael porter, [Online] Available: http://www.valuebasedmanagement.net/methods_porter_value_chain.html, last access 4/2/2009.
Michal, G & Eleonora, B 2006, Strategic Information Management, Comenius University, E-Leader, Slovakia 2006
Pita, Z Cheong, F & Corbitt, B 2008, Approaches and Methodologies for Strategic Information Systems Planning, an Empirical Study in Australia, 19th Australasian Conference on Information Systems, 3-5, Dec 2008, Christchurch