Hi everyone! On this blog, I am going to share to you about what I have learned and understood about information system, organization, and strategy. Firstly, let me start it with five forces that generally used to analyze the competitiveness of your business environment and how those five forces can affect your long-term profitability. In addition, this Porter’s five forces actually can be powerful tool and highly recommended to become business strategy tool as it helps you to achieve the competitiveness and help you to avoid taking wrong steps in the future. In general, there are five forces that including competitive rivalry, supplier power, buyer power, threat of substitution, and threat of new entry. First of all, let me start it with the first one which is competitive rivalry. Competitive rivalry basically means that it is more discussing about how many rivals do you have and how good is the quality of their products or services with yours? One thing that you’d better know is that if the rivalry is so intense, companies can generally be able to attract more customers by giving special price and even high-impact marketing campaign as we all know that there is a chance where your suppliers and buyers can go and look for another if they do not get a good deal from you. However, if the competitive rivalry is low like no one is doing what you do now, then you will be considered as the ones which have tremendous strength and healthy profits as well. Secondly, supplier power. Supplier power basically refers to how easy is it for your suppliers to increase their prices like it is determined by how many potential suppliers do you have, how unique is the product or service that they provide, and how expensive would it be to switch from one supplier to another? It generally means that if you have more to choose from, it will be easily for you to choose another alternative. However, if you have small number of suppliers, of course there is a chance where you will keep relying on them and the more likely you will be charged more by them as it also can affect your profit. Thirdly, buyer power. Buyer power is basically about how many buyers are there, how much their orders and how much would it cost them to switch from your products and services to those of a rival? And it simply means that if it comes to smart customers, they will have more power and your strength will increase if you have a lot of customers. Next one is threat of substitution. Threat of substitution simply refers to the substitution performance and basically it also refers to the possibility that your customers find different ways of doing what you do. Lastly, Threat of new entry. Threat of new entry is basically more like how easy is it to have a foothold in your sector market, how much would it cost, and how tightly is your sector regulated? Besides, one thing that we have to know about threat of new entry is it also refers to the cost of entry which is more like setting the cost and it will be better to have specialist knowledge and economic scales as it is very important thing to reduce the unit cost and economic cost by producing enlarge quantity.
In addition, I learned that knowing information system strategy is also an important thing to be learnt and actually there are several things we must know regarding this one such as low cost leadership, product differentiation, focus in market niche which generally means to focus on a specific target, and increase switching cost for customers as well. In short, information system is actually just a supporting tool to maintain and achieve the competitive advantage. We all know that value chain method is also very important thing to be known as it is generally about the analyzes on what will you do next to the company and talking about this thing, it is better if we also talk about a core competency as it is a MUST in businesses because it can provide value to customers and also open door to new markets.
Overall, that is all that I want to share to you and I hope that this blog can be useful and give you some knowledge as well. Thank you very much and have a great day 🙂
Jonathan Andianto 