Information Technology as an Element of Competitive Advantage Term Paper

Information Technology as an Element of Competitive Advantage - Term Paper Example Another example of a company that uses IT as an element of competitive advantage is Amazon. Management thinks that it should insert new services to its Web site to draw the interest of customers habitually. Amazon constantly enhances the appearance of its Web pages and the range of products/services it offers. It advances from being a simple book seller to a sophisticated provider of â€Å"best-seller lists, readers’ reviews, and authors’ interviews† (Oz, 2008, 57); offering a remarkably wide array of consumer products/services. The continuous developments help Amazon sustain its leading position and competitive advantage in Internet retailing. Yet, every one of these features has been copied by competitors. Amazon then decided to add Web hosting services into their list of offerings.   There are two ways of exploiting information technology to attain competitive advantage: first, as an important product/service offered to customers; and, second, as an organiza tional backup for product/service which is imperceptible to the customers. With highly technological products/services, it is usually very tricky to sustain a competitive advantage, because, as repeatedly mentioned above, competitors are good imitators. This may be specifically factual in the field of IT (Zoephel, 2011). For instance, the life expectancy of products/services in numerous technology-based companies, like laptops or semiconductors, is brief. High-tech companies aim to develop a new product or a modified one.... Information technology can help an organization maintain competitive advantage if it continually changes and improves the system, building a dynamic and inimitable target for competitors (Oz, 2008). A perfect illustration is an online airline reservation site—American Airlines’ Sabre. In the 1950s, the system was created. But in the latter part of the 1970s, the system was re-created to provide a more convenient service for travel agents, online reservation. However, the company developed the Agency Data Systems-- an office computerization system for travel agents (Oz, 2008, 236). The reservation site currently includes limousine rentals, train tickets, car rentals, hotel reservations, and theater schedules. When the Internet eventually became widely accessible, the reservation site was redeveloped to give travelers the option to log in to Sabre from the comfort of their own homes or workstation. The site has been very profitable that in several years Sabre generated mo re profit from IT than from its airline services. Another example of a company that uses IT as an element of competitive advantage is Amazon. Management thinks that it should insert new services to its Web site to draw the interest of customers habitually. Amazon constantly enhances the appearance of its Web pages and the range of products/services it offers. It advances from being a simple book seller to a sophisticated provider of â€Å"best-seller lists, readers’ reviews, and authors’ interviews† (Oz, 2008, 57); offering a remarkably wide array of consumer products/services. The continuous developments help Amazon sustain its leading position and competitive advantage in Internet retailing. Yet, every one of these