Blog 1 : Information
and Competitive Advantages
Organizations
always seek for competitive advantages in an industry in order to take over competitors
in some measures such as cost, quality, or speed as it can determine the
success or failure of a company (Porter and Millar, 1985 and Porter, 1996).
Hence, a strategic information system can help the organizations to gain
competitive advantage through its contribution to the organizations’ strategic
goals and its ability to significantly increase the organizations’ performances
and productivities.
Cost leadership, differentiation strategy, innovation
strategy, and alliance strategy are the five competitive strategies commonly
practice by the organization to gain competitive advantages. I will take Air
Asia as my example. Cost leadership means produce products or services at the
lowest price in the industry by increasing the prices of competitors and
helping customers or suppliers to reduce their costs. Air Asia has been known
as the low cost carrier airline in the world. It has less management level,
effective, focused, and aggressive management. It also uses single type fleet
to minimize its maintenance fee and easy for pilot dispatch.
Secondly, differentiation strategy means the firm
differentiates its products or services from its competitors. It usually
focuses on a particular segment of its market. For example, Air Asia
differentiates its business from the traditional Low Cost Carrier model by
adding customer services or operation as full service airline with low fare.
Next, innovative strategy means that the firm produces
unique products or services which bring radical changes to the business
processes. For example, Air Asia offering a wide and innovative range of
distribution channels to make booking and travelling easier. Customers can book
their air tickets through Air Asia official websites, during Matta Fair, or at
any Air Asia kiosk in the shopping complexes.
Furthermore, growth strategy helps o
obtain competitive advantages too. It enables the companies to expand their
capacity to produce, expand their business into global markets and diversify
into new products or services. For example, Air Asia is using the Computer
Reservation System (CRS) suit powered by Navitaire’s Open Skies technology to
facilitate its reservation and inventory system. This has satisfied the needs
of AirAsia in implementing a low-cost business model to transform the business
process to efficiently streamline its operations and helped AirAsia to grow from 2 million passengers to 7.7
millionpassengers in less than two years (Tony Fernandes, CEO, AirAsia).
Lastly, AirAsia also
uses alliance strategy to gain its competitive advantages. I found a news
article reported in Singapore on Business Times, titled: AirAsia-Expedia
alliance to tap Asia travel mart (Monday, October 22, 2012). Under the
alliance, passengers can also book AirAsia and AirAsia X flights on the Expedia
website. This partnership will give Expedia exclusive third-party distribution
rights for AirAsia and AirAsiaX flights and travel packages, giving the carrier
a wider distribution reach.
(Total 463 words)
References:
1. 1. Mahmood Hemmatfar, Mahdi Salehi, and
Marziyeh Bayat. (2010). Competitive Advantages and Strategic Information
Systems. International Journal of
Business and Management, Vol. 5, No. 7, pp. 162.
2. 2. Strategic
Information Systems for Competitive Advantage. IT in the Organization, Part 1, Chapter 3, pp. 92.
3.
3. Pui Man, W.
(2009). Project
Studies – Enabling Technology in Airline Industry. Professional Diploma Program in Logistics and Supply Chain Management.
AirAsia.com, pp. 4, 7, 8, and 10.
4.
4. Sandy, H.A. (10 April, 2005). Might of
Air Asia: Internal Analysis perspective. Strategic
Management Individual Assignment. Melbourne, Faculty of Economics and
Commerce, University of Melbourne.
5. News at Btimes website: http://www.btimes.com.my/Current_News/BTIMES/articles/aaexpedia/Article/index_html
