Competitive Organizations Assignment

Competitive Organizations Assignment

This Competitive Organizations assignment is written for the business development, in this a answer is given of question that How Technology provides competitive advantage to an organization.

Introduction

Numerous researches over the period of last thirty years have addressed the question of an organization’s prosperity in the long run. The conclusion reports that adoption of technology in its most innovative and appropriate form gives an organization its decisive competitive edge. The process involves organizations trying to protect themselves from obsolescence by offering unique products, higher quality systems and customized services unknown to the market. It is important for them to choose a low cost strategy, different from that of its customer. The right technology decision during each stage of the growth cycle is crucial in generating market demand, profit and thereby, growth. The resulting strategic action gives an organization a defensive position over its rivals, and the competitive advantage should be sustainable over a narrow range (Kelly, 1998).

In order to broaden the foothold in the market, an organization needs to employ appropriate technology and penetrate deeper into the customer base. The existing customers should be supplied with, and potential customers should be attracted with a value equivalent to, or better than, that of the competitor. The technological strategy of an organization should be effective in providing it a sustainable development competitive edge and establish it as a leader in developing distinctive competencies. By the time its rivals understand the impact of these technologies, the company can move to the next generation of these technological improvements. Thus, it is important for any firm to repeat the process of adopting technology and protecting itself from obsolescence, over its entire growth cycle, in order to stay a step ahead of its competitors.

competitive-organizations-assignment

Investors in today’s global economy value the practice of technological discipline in an organization. It is well known to them that timely application of technological knowledge can enhance product reliability, innovation and, in turn, customer relations. Use of technology can enhance organizational processes by inducing productivity gains. Therefore, it is important for organizations to incorporate technological models that can produce sustainability towards competitive advantage in the market, and therefore, get more readily recognized by investors and lenders (Porter, 1979).

It has been identified that organizations should introduce new technologies for maximum effect and not for maximum efficiency. It is also crucial for an organization striving towards competitive advantage, to determine the most appropriate period of technology implementation. For maximum effect, technology pertinence should be introduced during the revolution phase of growth. However, it has been observed that experience plays far important role than differentiation in low-cost strategies. Differentiation is dependent on short-term and constant induction of products and subsequent enhancements. Whereas, low-cost is influenced by experience curves, scale economies and commodity cost containments. In order to allow technological implementations to provide maximum competitive advantage, it is important to differentiate between the two, and successfully adopt technological competencies easily perceivable by potential customer; who would later fuel the next stages of revolution (Zangwill and Kantor, 2000).

Exploiting the five phase growth theory (Churchill and Lewis, 1983), appropriate technology relevant to each growth stage in the life-cycle of an organization can be determined, which provide competitive advantage over the complete perspective in the following way (Ryall and Sorensen, 2007):

Role of Technology in Concept Development

 During the early development stage, it is important to discover the potential needs of potential customers, and that they should be convinced of the organization’s better production of service. Unattended needs of the customers can be identified and met following flexible introduction of technology at the development stage. Also, adaptation of appropriate technologies can help in adjusting expenditures, productions and processes; at a stage where resources are modestly available and changes are made more frequently.

Role of Technology in Foundation Building

 This phase marks the stage where the company has established an initial competitive advantage in the market, by appropriate implications of technology in products/services. The organization now needs to sustain this advantage and penetrate deeper into the customer base, without over budgeting, while successfully building a market reputation and appropriately introducing technology to formulate high quality processes and products. Satisfying existing customers and attracting new customers is the key component of this stage, and therefore, employing technology to deliver highest quality of service at the best transaction price is crucial. Inappropriate use of technology at this stage can lead to degradation of the earned competitive advantage and may even discourage the potential of an organization’s future strategies of technology innovations. {Explore the Larsen and Toubro Marketing Mix}

Role of Technology in Rapid Market Expansion

During this phase, the organization needs to control the management efforts and pick-up growth from where it left off in the previous phase. Technological innovations must be directed towards improving controls over processes and communications. Technologies used during the Foundation Building Phase need to be upgraded and expanded towards promoting high volume profits and increase the earned rewards. Quality decisions regarding technology change need to be implemented while directing these rewards towards sustaining the organization’s competitive advantage as the technology leader. The process needs to be reviewed, renewed and repeated until the Market Stabilization Phase and market segmentation.

Role of Technology in Market Stabilization Phase

The organization only earns average market returns, if the share only comes from customers who value the innovative technology provided by the organization. For reaching distinctive market share, profits need to be earned from those who do not have strong considerations for technology use by the organizations and also from those that do not permit cost efficiency scales. The organizations, therefore, needs to invest in innovative and competitive strategies in order to sustain growth and competitive advantage. Appropriate specialization of superior technology in this phase helps in gathering valuable experiences and skills from the development stages.

Role of Technology in Niche Development Phase

 Up to this stage, the organization following the five stage growth theory might have already achieved reputation and distinction as a competitive technology innovator. Use of a new technology at this phase, if successfully implemented, can expand the horizons of the organization globally. Penetrating into competitors’ technology strategies and successful control, management and sophistication in the technology of the organization may result in generating opportunities directed towards the long-term goal of the organization.

Analysis

An organization may have competitive advantage during the start, with or without technology; however, to survive in its field of industry, it eventually has to incorporate technology based models into its work strategy. It has been theoretically as well as practically proven that any organization has to adopt technological decisions during different stages of transitions. According to the five growth stage theory, an organization can increase competitive advantage by using technology and enhancing its ability to attract investment and customers (Romanelli and Tushman, 1994). When the life cycle of an organization is mapped, there are different phases characterized by growth, change and revolution. In order to maximize competitive advantage, it is important that implementation of new technologies should be done near the period of revolution in the life-cycle curve. During early stages organizations should use technology to provide flexibility in products and develop the quality of services. The middle stages should use technology to facilitate management of complex operations, followed by expansion of activities in the final stages. Thus, an organization should adopt technology in a way most suitably in sync with the latest developments and that to the changing markets, in order to overcome obsolescence.

Conclusion

The detail in which analysis above is done emphasizes the fact that adopting appropriate technology and incorporating it into the organizational operations and infrastructure provides a competitive advantage to an organization over its rivals. The primary essence of the organization may or may not be based on technology, but technology as a strategy model is essentially important for its survival in the market. Employing innovations and sophistications in the use of technology attracts customers and definitely leads to growth of the organization. In order to maximize advantage, the organization needs to incorporate the technological model at every sequential stage of its life-cycle. Technology use leads to a definite increase in the efficiency and effectiveness of an organization. Differentiation is a key IT strategy (technological), where organizations focus on uniqueness in order to establish a customer base. Organizations today are even using technology strategies in designing cost-reduction models for their products and services. World’s top banks, investment firms, asset providers, etc., are also using technology to gain competitive advantage. Technology can be used to access an unlimited array of services over the globe, and since customer satisfaction has achieved an all-time high on the priority list of organizations; organizations are looking for unique, reliable and efficient processes, controls and products, at the best available transactions. With  the aim of competitive advantage in mind, organizations are now looking for innovative technologies and appropriate ways to employ them into their strategies.

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References

  • Churchill, N. and Lewis, V. 1983.The five stages of small business growth.Harvard Business Review.[online] Available at: http://www.tameer.org.pk/images/The_Five_Stages_Of_Small_Business_Growth.pdf [Accessed 31 March 2011]
  • Kelly, K. 1998. New Rules for the New Economy,New York. NY: Viking Press.
  • Porter, M. 1979. How competitive forces shape strategy. Harvard Business Review.[online] Available at: http://prolog.univie.ac.at/teaching/LVAs/KFK-LM/WS07/Porter.pdf [Accessed 31 March 2011]
  • Romanelli, E. and Tushman, M. 1994. Organizational Transformation as Punctuated Equilibrium: An Empirical Test. Academy of Management Journal.37(5), pp.1141-66. [online] Available at: http://faculty.fuqua.duke.edu/~willm/Classes/PhD/PhD_2008_2009_LongStrat/Readings/Class06_PuncDiseq/RomanelliTushman1994.pdf [Accessed 31 March 2011]
  • Ryall, M. and Sorensen, O. 2007.Technology and Competitive Advantage.Management Science.53(4), pp. 566-580.