Computer-Based Information Systems Are Critical to an Organisation’s Survival in the Modern Competitive Environment. Discuss This Statement with Reference to Porter’s Competitive Forces Model (1980), the Basic

2196 WordsMar 13, 20139 Pages
Computer-based information systems are critical to an organisation’s survival in the modern competitive environment. Discuss this statement with reference to Porter’s competitive forces model (1980), the basic strategies that can be used to gain competitive advantage, and how computer-based information systems can support these strategies. Computer-based information systems (CBIS’s) are critical to an organisations survival in the modern competitive environment. CBIS’s are information systems that make use of information technology in order to create management information (Bocij, et. al., 2008). They help organisations with general activities of gathering, processing, storing, using and distributing information within an organisation.…show more content…
Through external databases for example, businesses can identify the cheapest suppliers and therefore reduce the bargaining power of existing suppliers (Bocij, 2008). The use of CAD/robotics and CBIS automation can also reduce the power of suppliers in the form of reducing the need for human labour (Robson, 1997). Such CBIS’s in the shape of computer-integrated manufacturing can also be used to speed up the development of new products, and reduce the threat of competitors being able to offer acceptable substitutes. In addition, integration of organisations CBIS’s with that of its buyers can help strengthen the business relationship, and reduce their relative buying power. Such information resources ‘can be used to build switching cost that make it less attractive for customers to purchase from competitors’ (Pearlson, 2004: 44). Amazon.com’s ‘one click’ policy for example, uses CBIS’s to store buyer information, to make future purchases easier for the buyer, and increasing the costs of switching suppliers in terms of both time and effort (Pearlson, 2004). With CBIS’s being able to increase entry barriers and decrease the strength of suppliers, buyers and substitute product, competition among existing competitors is likely to remain relatively stable, and based on differentiation of products and services. The ability of CBIS’s to influence the five forces of industry profitability demonstrates how critical such systems are

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