IT Does or Does Not ?

Nicholas G. Carr argues in his article “IT Doesn’t Matter” that information technology no longer gives businesses a competitive edge. He examines the evolution of IT and argues that it follows a pattern very similar to that of earlier technologies like railroads and electricity. At the beginning of their evolution, these technologies provided opportunities for competitive advantage. However, as they become more and more available as they become ubiquitous they transform into "commodity inputs," and lose their strategic differentiation capabilities. Carr concludes that since information technology no longer provides a competitive advantage to businesses, they should stop spending wildly on advanced information technology products and services.

Although Carr had made some good points, I still have to disagree. IT matters. Investments in IT are definitely an important area for an organization. Carr says there's virtually no competitive advantage to be gained through IT, because anyone can buy what you buy. That’s certainly not true. It is not what you buy but what you do with it. Standardization and commoditization of a technology don't always mean that innovation stops. You can gain competitive advantage by innovating in IT. You can't count on a single-shot competitive advantage, but you can gain a continuing advantage by being a continuing innovator in IT. I believe IT is really about change. If you want to change your company, you build an IT system to make it possible to. Although IT may be ubiquitous and increasingly less expensive, the insight and ability required for it to create economic value are in very short supply do that change. Investing in IT systems can help a company to cut costs.

In class we discussed that competitive advantages do not last forever. And in this article, IT technology can be replicated. The great example is Wal-Mart. Wal-Mart innovated continuously around new generations of IT. Even as competitors adopted Wal-Mart’s practices, the retailing giant focused on the next wave of innovations, preserving a significant productivity advantage relative to competitors. The fact that you buy identical technology doesn't buy you anything; it's how you manage it. Doing something better and cheaper than the competition is always valuable, even if the competitive advantage is only temporary.

Companies investing wisely in IT increase revenues much faster than those that invest unwisely. New technologies will continue to give companies the chance to differentiate themselves by service, product feature, and cost structure. The first mover takes a risk and gains a temporary advantage. Companies cannot afford to ignore information technology; IT still matters.

IKEA Porter’s Five Forces and Value Chain Analysis

           There are a lot of furniture companies out there that carry numerous styles, great quality and affordable price. But being a college student who’s on budget, IKEA is definitely my number one favorite furniture store to shop at. I adore their styles, and especially their budget friendly price.

            IKEA is the world’s largest furniture store. IKEA’s competitive advantage includes its creative design achieved in low costs. IKEA products are based on the concept of democratic design that attempts to achieve an effective integration of form, quality, function and sustainability for a low price.

            In Porter’s five forces model, five competitive forces determine industry profitability, which are bargaining power of suppliers, threat of substitute products, bargaining power of customers, threat of new entrants into the industry, and lastly rivalry. After doing some research, here is IKEA Porter’s Five Forces:

1.     Bargaining power of suppliers:  The bargaining power of suppliers is considerably low. Suppliers do not have substantial bargaining power as there many options available to IKEA around the world. There are numerous factories around the world with the capabilities and resources to form partnership with IKEA. However, IKEA do form long-term relationship with its suppliers.

2.     Threat of substitution: is low because IKEA offers many products and services that can substitute the demand for furniture, home appliances other products.

3.     Bargaining power of customers: is strong because there are a lot of competitors including global furniture retailers as well as, local furniture producers.

4.     Threat of new entrants into the industry: There is little threat from new entrants. The requisite expertise is difficult to replicate and financial investments are significantly high

5.      Rivalry: There is significant competition in the discount furniture market with companies like Wal-Mart Stores, Target, Sears, Home Depot, Pottery Barn, other local stores.

Value Chain

Primary Activity

·      Inbound Logistics: IKEA employs in-store logistic personal to handle inventor management. They are the one who ensure an efficient flow of stocks. IKEA Group has 1,046 home furnishing suppliers located in 52 countries.

·      Operation: Operations are conducted in four divisions: franchise division, retail center division, property division and finance division. Operations in more than 38 countries; 208 company operated stores in 26 countries, remaining stores operated by franchisees. IKEA minimize touches by reducing process of moving, shipping, and loading of product. 60% of manufacturing takes place in Europe because IKEA does not manufacture its own products

·      Outbound logistics: Transportation of products is done by customers. Customers select the furniture, retrieve the packages themselves and take it home; therefore IKEA saves fuel and stocking costs. In 2013, 212 million copies of IKEA catalogues were printed in 29 languages

·      Marketing and sales: Targeting mainly families with lower income, students and singles. There are lots of inspiring ideas and realistic room settings at showroom. Market halls gathers items according to categories enable customers to easily compare and choose. IKEA also publishes an annual catalog as their main marketing tool, distributed in stores and by mails.

·      Services: IKEA has very limited level of customer services according to the chosen business strategy and low number of sales assistants in stores. IKEA offers Ikea family loyalty card, financial service and 100 days return policy. 

 It is apparent that IKEA chose to pursue cost leadership as their strategy to be its attractiveness. IKEA has chosen to mostly enter markets through wholly-owned subsidiaries in order to maintain their brand image. This strategic decision has enabled IKEA to maintain a competitive advantage, and earn above average returns due to leadership in the market.

http://research-methodology.net/ikea-value-chain-analysis/

http://www.academia.edu/5197655/IKEA_Case_Study

Collaboration System: Advantages and Distadvantages

          Due to our constant changing society and advancements in technology, many people rely on the Internet to communicate, network and collaborate with others. To fulfill the needs, collaboration system is designed to help employees or people who are working on the same task to achieve whatever goal that task sets out to do. Moreover, collaboration system also helps owners to communicate with clients and receive feedback to obtain the best performance.  It can be the most effective and reliable way, especially for those who live far away. However, nothing is perfect; every collaboration system has its advantages and disadvantages. Here are my top 5 favorite collaboration systems that allow you to constantly stay in touch with others for a very minimal to free cost.

 OoVoo

OoVoo is a video chat and messaging app, and is available for iPhone/iPod/iPads and Androids.  User can also use OoVoo on a computer.

Advantages:

·      Oovoo is free to download,

·      You can video chat with up to 12 people at a time

·      You can see four people at once on screen during these video chats

·      there is a feature where you can call friends who has skype accounts but not OoVoo accounts with OoVoo

·      Record and store audio and video calls

·      privacy option where you can specify how and if people can find you on OoVoo

·      Use OoVoo for business such as conference meeting, interviewing potential candidates

Disadvantages:

·      OoVoo's video call is limited to two people in free calls and have to pay OoVoo credit to call more than two people

·      There will be ads shown within the app, so there is premium option for the mobile app, $4.99 a year to remove ads.

Viber

Viber is a mobile application that allows you to make phone calls and send text messages to all other Viber users for free. Viber is available over WiFi or 3G

Advantages:

·      Communicate and connect with people oversea for free

·      Free text and free calls, benefits every body

·      Easy to use, same operation as iPhone so users wont have to learn much, this can be very convenient for elders.

·      It automatically transfers all contacts from your phone’s contact list to viber’s list, so whoever has Viber will be automatically showed

·      It also runs silently in the background so it does not interfere with the phone’s other uses until someone calls you on Viber

·       Viber is automatically launched and logs right in with your mobile number once you turn your phone on.

·       There is no need to register

·       Viber doesn't contain any annoying ads.

Disadvantages:

·      Viber connection relies on 4G, so when the reception is weak, the connection fails

·      You are not able to leave voice-mail

·      You cannot face-time

Skype

Skype is a telecommunications application software that specializes in providing video chat and voice calls from computers, tablets and mobile devices via the Internet to other devices or telephones/smartphones.

Advantages:

·      Be able communicate such as messaging, phone calls and even video calling with people who are on Skype

·       It’s FREE. Keep in touch with loved ones all over the world

·      Can be used for business purpose such as video conference, sending files.

·      Easy to use, and Skype saves your conversation

·      People be able to do interview through Skype if they are far away

·      It can be downloaded onto iPhone and android

Disadvantages:

·      Hackers can steal personal information

·      Not so reliable outbound connection

·      Video calls only between two users

·      Cannot record video conference

·      International calls costs money

·      Requires Wi-Fi or 3G service to run

Yelp

Yelp was founded in 2004 to help people find great local businesses such as restaurants, salons, doctors, auto shops, markets, etc.

Advantages:

·      You can search for type of businesses in the area

·      Find basic info such as business hour, contact info, website

·      Can read the opinions of other people who have gone to the place of business which can give you an impression of what it would be like to go there

·      Users can share information, their opinions and photos. Owners or other users are able to comment to the reviews

·      Users can follow other users on yelp; it gives you the option of connecting with other yelpers, follow their posts, show your interests for listed events and also chat in online forums

·      Owners can also reply to negative review and address the problems

·      There is a discussions through the "talk" section of Yelp which let you ask for specific or more detailed information about the business

·      It can be downloaded onto iPhone and android and be used anywhere

Disadvantages:

·      People get paid to write reviews on yelp => not reliable

·      People can provide false information

·      People become to relied on yelp to go out and explore new restaurant

·      Many people take the info and advice on yelp as though it is factual, therefore they instantly assume a place is good or bad by reading reviews.

·      Requires Wi-Fi or 3G service to run

Google docs

Google docs is a web based word processing program that allows users to create and edit documents online while collaborating with other users in real-time.

Advantages:

·      It is FREE to share word documents and PowerPoint presentation

·      It allows people to work online and share with others in real time. Others can also edit the work and it also shows past edits

·      Google Docs automatically saves your document on every few second.  Google Docs allows you to work on your documents from any computer. Even when your computer crashes, you still be able to have access to it

Disadvantages:

·      If you don’t have Internet you can’t share a project with someone or you can’t work on it either

·      It’s not safe, someone can sign in anonymously and delete your work

·      It has limited formatting ability

·      During peak hours, you can experience lag

·      One must have an email account to publish or share files