In week 3, I had learned the role of information technology. Basically, the role of IT is divided into three categories which is increase process of business more efficiently, improve the communication among the employees and worker, and increase the facilities collaboration within the organization.
The competitive forces are explains in below:
1) Rivalry among existing competitors
The existing of competitors is increase day by day. Most of these competitors have equal size and power in the markets. The exits of the competitors force the organization to do activities such as discount of products introduce of new product and improve their services.
2) The power of buyers
The power of buyers also refers to the bargaining power of customer. If the buyers in the markets have the power, they can demand the high quality product in low price. If the prices are low in other markets, then the organization has to decrease the price because the customer has the power of negotiation of the price.
3) The Power of suppliers
The power of suppliers also refers to the bargaining power of the suppliers. If the power of suppliers is high, then they can increase the price higher. If the organization does not want to get supplier from the supplier, they may change to other supplier, but the price offer by other supplier may more high because the organization have no choice in choosing the supplier.
4) The threat of substitutes
Substitutes product is mean the product have same or similar function as in the product in the markets. When the substitute product is high in market, then the organization with the same product with suffer the profit lost. It is because the customer may switch to the substitute product if the price is low.
5) The threat of new entries
The new entry in the markets may make the existing company suffer from profits lost because the customer has more choice in the markets. The new entries may lower the price to catches customer and it will led to lost of the company in the markets.
Due to the five competitive force that influence the organization. There are five competitive strategies that can use by organization to encounter these forces.
The five strategies are shown as below:
1) Cost leadership
In this strategy, the organization can sell their product by change their product into low-cost product. One of the ways to decrease the price of the product is using online to sell the product. By using this way, it will automatic increase cost to competitors.
2) Differentiation strategy
This is the strategy where the organization sells the different product from other. Most of the customer will more interest in buying different product that produce rather than the product that their always saw in the market.
3) Innovation strategy
This strategy is where the organization make innovation on the existing product to become more advance or better that the original product. The innovation on service such as online service also can increase the profit of the organization.
4) Growth strategy
In this strategy, organization may expand their organization such as open new division or expand into global markets. By using this way, the productivity will increase due to the diversity of the people in the markets.
5) Alliance strategy
Alliance strategy allows the organization to merges with other organization to produce better product. In the markets, if one product cannot survive, it must using merging product or organization to produce better service and product.
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