Case Study :Xero and Mcdonald's Essay

3377 Words Jul 23rd, 2013 14 Pages
Introduction

Xero and McDonald’s are two objects that will be analyzed in this essay. In terms of Xero, an online accounting software company, the essay will focus on Xero’s business strategy by using Porter’s five forces model and Xero’s sources of competitive advantages by using Porter’s value chain model. Also, the roles and competencies of CIO, CTO and CPO will be discussed in the case of Macdonald’s Australia. Finally, based on Macdonald’s, it will analyze the importance of information system and information technology.

1. Competitive Forces Model

With rapid development and increasing acceptance of the internet, Drury established Xero, an accounting software company that listed on the NZ stock exchange within a year. To
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Furthermore, outsourcing the accounting work to accountants or accounting firms may lead to privacy risks and developing an internal accounting system is infeasible to small enterprises in respect of costs and human resources.

Thus, there are few outside threats to accounting software in terms of substitute products at the present.

1.5 Intensity of rivalry among competitors

Intensive rivalries are common in industries with many equally balanced companies. According to the research of accounting software, there are at least 20 free and open source software and 60 proprietary accounting software in worldwide, which means more firms have to compete for the same customers.

Top Ten Reviews website illustrates top rated accounting software of 2013. Xero ranks ninth overall although its price per month is the lowest in top ten. More specifically, visible dimensions on which rivalry is based are not only price, but also switching costs. Low switching costs (i.e. low levels of product differentiation) is another significant factor associated with higher levels of rivalry. Buyers frequently purchase the product or service loyally when they find a unique product that satisfies their needs. Although Xero intends to differentiate itself from others by providing related services, focusing on small businesses and being web-based instead

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