Using Information System for Gaining Competitive Advantage

          Strategic information system is any information that uses information technologies to gain a competitive advantage, reduce a competitive disadvantage or to meet other strategic enterprise objectives. In order to sustain long-term profit and to maintain or be leaders of market share, competitive forces have to be well-studied before planning any strategies. Competitive forces can be in terms of threats or assistance of success and all depend on how an organization perceives and to deal with them.

Commonly, there are 5 competitive forces, mainly rivalry of competitors within its industry, new entrants threat get into an industry and its market, substitute products that may capture market share, bargaining power of customers and last but not least, the bargaining power of suppliers. If using HSBC banking organization as example, the competitors are mostly Maybank or Public Bank in local as a threat for him to be banking leader.  It could be threats from other bank’s new plans or services, might also be lower cost or interest in loaning, this all might lead to an increase of perceived risks. Commonly, suppliers’ power is less likely to explain but customer almost has no bargaining power in banking industry. http://www.scribd.com/doc/35162025/29/Micro-Environment-of-HSBC

In order to deal with the competitive forces and reducing the risks faced, organization should have proper competitive strategies. Most common five competitive strategies include cost leadership, which can manipulate large finance oriented customers’ support by lowering product selling prices which help suppliers and customers to reduce costs. Differentiation strategy is more to creating unique product in market to trap unique and affordable customers. Innovation strategy is applied when rivals creating something great but not perfect, making customers a better feel to own the products.  Growth strategy means diversify products and its capacity whereas alliance strategy often applied to establish bigger power through merges or joint ventures. These strategy works well to encounter threats perceived and reduce risks.