An important concept that highlights the role of information technology in competition is the “value Chain. This concept divides a company’s activities into the technologically and economically distinct activities it performs to do business. These activities are “value activities.” The value a company creates is measured by the amount that buyers are willing to pay for a product or service. A business is profitable if the value it creates exceeds the cost of performing the value activities. To gain competitive advantage over its rivals, a company must either perform these activities at a lower cost or perform them in a way that leads to differentiation and a premium price (more value).
In view of porters value chain model managers can use to assess the role of information technology in their business and to help define investment priorities to turn the technology to their competitive advantage and allows organizations to better alignment of process, focuses on cost management and improves the timeliness operations.
Use of information technology is very important in today’s technological driven environment.
Technology can be used in production to reduce cost thus add value, or in research and development to develop new products, or via the use of the internet so customers have access to online facilities, using new technologies companies delivered quality products to their customers as well as reduce development and delivery time of product.
Information technology is changing the way companies operate. It is affecting the entire process by which companies create their products. Furthermore, it is reshaping the product itself: the entire package of physical goods, services, and information companies provide to create value for their buyers.
How Information Gives You Competitive Advantage