Discussion—Technology and Strategic/Competitive Position Apple Inc. is known for

Question

Discussion—Technology and Strategic/Competitive Position

Apple Inc. is known for its state-of-the-art designs for products such as the iPhone, but most are unaware that Apple has used technology to streamline its supply chain management and operational systems to provide competitive pricing. This use of technology has allowed the company to under price its competitors and yet maintain a 25 percent margin on their products. The use of IT has provided Apple with a strategic and competitive position which most of their competitors find difficult to match or exceed.

Using your company or a real-world example from your research, analyze how information systems affect the firm’s strategic and competitive position.

Using the assigned readings and library resources, explain how information technology:

Impacts competitive rivalry, such as pricing, promotion, and distribution

Enables or dissuades new entrants

Enables customers to achieve greater bargaining power

Enables suppliers to gain more bargaining power

Gives rise to substitute products or services that threaten the existing market

Write your initial response in 300–500 words. Your response should be thorough and address all components of the discussion question in detail, include citations of all sources, where needed, according to the APA Style, and demonstrate accurate spelling, grammar, and punctuation

Explanation / Answer

Information technology promotes competitive rivalry putting some of the products of companies far ahead of the competing products in the market. Information technology has a huge impact from the promotion of a product that in turn affects distribution in a positive way. Companies that make good use of IT are able to market their products effectively online and create a demand. As a result, a product gains a high demand for supply increasing the pricing. IT also boosts distribution. When a product achieves a high competitive position as compared to its competitors, it dissuades some of the new entrants due to a low market. On the contrary, the use of IT can influence other companies to use IT in a greater ay for their products rivaling the former e.g. Amazon and Apple.

Information technology influences a greater bargaining power for both the supplier and the consumer. The supplier bargaining power can influence the price targeted for certain goods due to technological features within the product. A quality product with advanced information technologies will give the supplier an advantage on a consensus of the pricing. The price is likely to be higher especially if competing products do not have the same kind of IT features. Customers can be enabled to achieve a greater bargaining power of a product due to IT aspects. Instances where the market has several products with information technology features can help a customer base their bargaining on comparisons of the product they intend to buy to other products in the market. Familiarization with the levels of IT employed in a product improves the customer bargaining power.

Information technology is a reason behind the rise of substitute products or services that threaten the existing market. A company that could have additional IT features to a product e.g. a mobile phone may threaten the existing market by having a higher demand from the consumers.

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