Corporate Strategies in Small and Medium Enterprises Essay Example for Free

Corporate Strategies in Small and Medium Enterprises EssayThe article picked is teaching engine room and corporate strategies in Small and Medium Enterprises by Poolad Daneshvar, Research Scholar, Department of Business Administration, University of Mysore, India and Dr.H.N.Ramesh, Director Kuvempu University, PG Center, Kadur, Karnataka, India. It is, to be more minute, a synthesis of different researches about the subject How does Information Systems create free-enterprise(a) advantages for the go-ahead? The article, however, focuses on the combative advantages for the Small and Medium Enterprises (SMEs). The difference between Information Systems (IS) and the Information Technology (IT), from the authors file of view is the orientation. If IT is most likely technical and supply oriented, IS is the way business makes use of IT depend on the enterprises needs. So IS is more demand oriented and business earthly concerned. In the article, the authors rarely recrudesce th ese two notions, considering that IS is based on IT and the authors point is to present how the application and utilization of information apprize be used to create competitive advantage.The authors also discussed about why SMEs should seize the opportunities to create competitive advantages brought by the IT/IS tuition. In fact, the main reason for the beingness of many rangy companies that regroup vertical cling to chain of mountains (from raw material, production to sales and customers go) is the transaction woos between the steps in a value chain, due to information asymmetric and assumption of opportunistic behaviors. When big companies are able to set up a whole value chain, they will gain considerable advantages from cost decrease and from the fact that they avoided, at near stages, the pressure from the suppliers and customers. In order to maximize efficiency, the SMEs can only concentrate in plastered activities and thus can only be part of a value chain. These com panies were struggling in this competition. However, IT/IS gives SMEs get to increase their ability to compete by three possible ways (Rockart and Scott Morton) Increase efficiency in operations, create links with customers and suppliers to increase their switching cost, create newfangled products or new serve.The authors explain how IT/IS has watch on competitive advantages of the SMEs in three categories Internal Strategy, Competitive Strategy and Creation of the Competitive Advantages. The authors precise two applications possible of IT/IS on internal strategy. Firstly, applications on the existing activities to increase efficiency and customers satisfaction land cost, but the authors stated this application is just basic and cannot be considered strategic. From the authors point of view, IT/IS should be applied in Management processes. Some model has been set up throughout the last three decades Business Systems intend (BSP, Hammer, M.M et al, 1980), Office automation met hodology (OAM, Sirbu, M et al, 1984) or also Business Process Re-engineering (BPR) These models can stage to the managers how their business is working and what kind of result can be expected, BPR can even shows the options.The decision reservation can be much easier and quick with helps from IT/IS. The most two most usual competition strategy are Cost reducing and Differentiation. However, Porter and Al. prepare concluded others ways to turn the competition virtually in the IT/IS era Use the IT/IS to change the rules of the competition in the industry, create competitive advantages by conclusion the companys ability to outperform its rivals, create new business. The authors analyze the competition strategy in two aspects, according to Porters study look upon Chain Analysis and Competitive Forces. Value chain is a framework for identify all the activities and analyze how they affect the companys cost and its value delivered to the customers. Value in this notion can be divide d into 2 types Value limpid and direct from Primary activities and Value implicit, indirect from support activities. The authors idea is to use IT/IS to move some somatogenic activities in the value chain on line (customers orders gathering, information collecting) or make some physical activities less costly (communication).This way, the SMEs can resolve one of their biggest problems is the high transaction costs. They also impart the chance to alter the services provided to make their operations more appealing to the customers, compared to part of other large groups value chain. According to Porter, there are five competitive forces Intra-industry rivalry, new entrance, customers bargaining situation, suppliers bargaining power and substitute products/ services. IT/IS can change the relationship between an industry and its suppliers, decrease the suppliers bargaining power. Furthermore, by accelerating the innovation, SMEs can create a technology barrier for new entrances whil e developing new competitive ordnance for intra-industry competitors. Concerning the creation of competitive advantages, the authors stated five different strategies for SMEs in the new IT/IS era Differentiation in price and product innovation using IT/IS to gather more customers preference on existing products/ services and change the enterprises products/ services accordingly or to have more promotion convey at low cost and establish the brands imageExisting cost decline like in promotion and distribution cost or Provide new inexpensive services Innovation increase the businesss efficiency, reduce products cycle life developing extend the enterprises scope and its score business based on the reach of the new telecommunication and transportation technology and finally, Alliance by using IT/IS in communication and information sharing. In the end of the article, the authors conclude that an alignment between IS strategy and Organizational strategy is necessary for the competitive ness development of SMEs that include the alignment between four elements Business Strategy, Organizational Infrastructure processes, IT strategy and IT infrastructure and processes. Basically, the authors put forward on the managerial role in this application the strategies and decision making concerning the enterprises IS should be considered as part of the organizational strategies depend on the enterprises goals.II. Why it is important to the centering of the IT systems?The article insisted on the important role of the IT systems in the management of SMEs, in order to create competitive advantages in the economy dominated by large groups. IS can now be considered as a weapon, a way that turns the powerless SMEs from before to dangerous competitors. asunder from companies in the Information field that actual strongly just in the last decade like Facebook or Google, a lot of others companies in others industries are making use of IT to find a blue ocean and grow. IS can change a companys value change by reducing cost and making it different from others companies, creating the competitive advantage. IS also can change the competition rules, limit the domination of large groups, create chances for SMEs to find its make way to develop and stand its ground. However, the development of the Information can also create entrance barriers for these companies.In my opinion, the development of the IT/IS in the past decades has made the global economy much more animated and stir. Considering these points, all managers should value the position of IT/IS strategy in their overall strategies, especially managers of SMEs, who will have to conceive of of IT/IS as their surviving paths. The managers should consider the enterprises goals and objectives invest in RD to find an IT/IS tools/ facilities that can respond to the enterprises demands, build a strategy of IT/IS development in short term and in long term and invest in IT/IS infrastructure and processes. Since the innovation speed of the IT/IS world is very fast, every IT/IS strategy have to consider and give-up the ghost room for regular update and development. In conclusion, Information systems have an indispensable role in the creation of competitive advantages nowadays. Company that can make good use of IT will be receiving limitless opportunities.III. ad hominem thoughts and opinionsI worked as a sales assistant and later managers assistant in an international company, also I studied in the international economy for about five historic period now. From my experience, the globalization that was only for transnational and multinational companies before is now also opening its doors to SMEs, and that was the result of the Information Technology development. The world is now flat (Thomas Friedman, 2005) and It create opportunities for SMEs in even developing countries to find their ground in the global value chain, just take for example the information, financial services outsourcing in India.My ex-employer worked in the high fashion field so the only application of the IT/IS in its activities is in promotion Aside from specialized magazines, Facebook, website and newletter emails were all important channels that help the company to establish Its brand worldwide, since It only have one siege in Hanoi. When I worked as Managers assistant, I also participated in the establishment of the KPI systems of the company, a systems that allow employees performances to be digitized and evaluated by the computer, it was a system applicable in the world Resources Management. Unfortunately, I did not get to see its result.