Strategic evaluation of a company requires managers to consider the reasons why one company has a competitive advantage over another. When managers make decisions to compete, they also need to reflect on ethical implications. Competitive advantage can be created when information technology is used to collect and interpret data.
Read the following article:
Digital Transformation – How to Differentiate and Create Competitive Advantage in the Digital Era
Please answer the following questions:
Explain what a company’s highest priority should be when creating a competitive advantage?
What is an example of a competitive advantage that is created by using information technology?
In your opinion, what are the ethical considerations when using information technology to create a competitive advantage?
Full Answer Section
- Focusing on continuous improvement: Cultivate a culture of innovation and adaptation to stay ahead of evolving trends and competitor actions.
Competitive Advantage with Information Technology:
Examples of IT-driven advantages include:
- Advanced data analytics: Leveraging customer data to personalize offerings, optimize pricing, and predict trends.
- Enhanced operational efficiency: Utilizing automation and digital tools to streamline processes and reduce costs.
- Superior customer experience: Creating seamless online interactions and omnichannel engagement.
- Supply chain optimization: Utilizing IT for real-time inventory management, improved logistics, and faster delivery.
Ethical Considerations of IT-based Advantage:
It's crucial to address ethical concerns when using IT for competitive advantage:
- Data privacy and security: Implement robust measures to protect sensitive customer and business information.
- Algorithmic fairness: Ensure algorithms used for decision-making are free from bias and discrimination.
- Transparency and accountability: Be transparent about data collection and usage practices, and be accountable for potential negative impacts.
- Competitive behavior: Avoid unethical practices like data scraping, cyberattacks, or manipulating search results.
Remember, sustainable competitive advantage often goes beyond short-term gains. Building trust, acting ethically, and focusing on creating genuine value for customers are key elements in the long run.
Sample Answer
Highest Priority for Creating a Competitive Advantage:
While there's no single "highest priority" applicable to every company, there are key considerations:
- Understanding your target audience: Identifying their needs, preferences, and pain points is crucial for developing relevant offerings and strategies.
- Leveraging your unique strengths: Analyze your resources, capabilities, and market position to identify areas where you excel and create differentiation.