What is systems thinking and how can management information systems enable and (possibly) improve business communications? When would you use a SWOT analysis to help you make business decisions? Why are competitive advantages temporary? What are Porter’s three generic strategies and how can a company add value by using Porter’s chain analysis? Define and Porter’s Five Forces model and explain each of the forces.

 
Business Management
An organization’s success and continuity are based on the business management model applied to ensure success and development.  Different organizations make use of other techniques that allow them to acquire competitive advantage and high market share.  These techniques are essential since they promote better performance, increased productivity (Baltzan, 2018).  Ensuring that performance mechanisms align with the structural overview helps create a culture, improve internal or external entities, and foster growth.  Different tools can be applied to achieve proper business management, and each has a direct impact on the company’s outcome.

Management Information Systems

Currently, numerous organizations are slowly focusing on implementing technology in the day to day organizational practices.  In this regard, system thinking entails an approach that focuses on understanding how one element can influence another as part of a whole (Al-Mamary, Al-Nashmi, Shamsuddin, & Abdulrab, 2019).  The business model for business thinking entails integrations of a new system to an existing business model.  The belief that the system’s integrated component differently can act if isolated from different design parts-various fundamental concepts make up the systems thinking process.

Initially, the system requires interconnectedness, a mindset shift from a linear model of working to a circular motion.  The other aspects include synthesis, combining of two or more items to discover a new entity (Al-Mamary et al., 2019).  Feedback loops focus on communications, while causality is utilizing the cause and effect mechanism to determine the integration mechanism and proper system mapping.

The systems thinking gives rise to a proper management information system that can improve business communications (El-Ebiary, Al-Sammarraie, Al Moaiad, & Alzubi, 2016).  A management information system creates a platform to transform the communications infrastructure within an organization.  Management information systems build an intranet that will avert the organization’s internal purposes, and communication through VOIP technologies.

Through the intranet, the organization can ensure seamless and real-time communication that is secure and inaccessible by external entities (El-Ebiary et al., 2016).  The information system can also facilitate the utilization of their communication channels such as company emails liked to the company domain, making it the company’s intellectual property in disputes or other management and administration aspects.

SWOT Analysis

A SWOT Analysis is a strategic analysis tool that can help comprehend both the internal and external factors affecting an organization and overcome these factors.  The SWOT Analysis similarly focuses on business analysis, ensuring that an organization sets its objectives for a project and all the project factors identified (Gürel, & Tat, 2017).  The SWOT analysis is an acronym for the four components it has towards managing projects and business development.  These elements are the Strengths and Weakness making up for the internal strategies while the Opportunities and Threats representing the external entities that might affect the project implementation.

Strengths

The SWOT Analysis strengths comprise the attributes that a company does well and distinguishable among the competitors.  These attributes are considered the building block and necessary for the organization (Gürel, & Tat, 2017).  The strengths applied to the organization’s firm brand name, are its excellent reputation, employee motivation, and high market share.

Weaknesses

These are aspects of the organization that can prevent successful results from being attained.  Weaknesses must have to be honest without concealing other attributes that have the potential to interrupt the attainment of success (Gürel, & Tat, 2017).  Factors that makeup weaknesses within an organization’s project include difficulties with communication, internal departmental rivalry, inadequate resources, or even the lack of financing.

Opportunities

As an external factor, opportunities are the organization’s elements or take advantage of by the organization to facilitate attaining the intended goals.  Options range from human resources, equipment, technologies, and other attributes that are not part of the organization but can offer change (Gürel, & Tat, 2017).  Some of the opportunities include suppliers, vendors, company reputation from the consumer perspective, and the market conditions.

Threats

Threats are equally external factors but can affect the proper functionality of business operations.  These obstacles occur daily and can easily damage the organization leading to numerous challenges for the organization. The SWOT analysis through the threats section identifies many of these issues, making it apparent to determine control measures (Gürel, & Tat, 2017).  Threats range from challenges to supply, market trend changes, government regulations, and technological advancement.

Competitive Advantage

A business strategy’s primary goal is to develop a sustainable competitive advantage over competing products or other industry players.  Competitiveness is essential in maintaining a larger market share and increasing the capacity of growth and development (Dagnino, Picone, & Ferrigno, 2016).  Competitiveness can range from a greater return on assets, higher profit margins, valuable resources including unique competencies, or brand reputation, among many others; the identification and development of company competitive advantage are essential for every organization.

The achievement of competitive advantage is conducted either through external changes or though developing them internally.  Exterior changes are based on the PEST factors (political, economic, socio-cultural, and technological) while the internal elements of competitiveness are based on the VRIO resources (valuable rare, hard to imitate, and organized) (Dagnino, Picone, & Ferrigno, 2016).  However, competitive advantage is temporary and does not last for a long time requiring the organizations to be dynamic and adapt to changes as they occur.

Businesses are becoming hypercompetitive, and the advancement in technology has created the ability to access materials and information instantaneously.  This attribute makes maintaining a competitive edge difficult for many companies leading to a temporary competitive advantage.  Companies within the same industry may have minimal periods of competitiveness due to the lack of differentiation as the main element (Dagnino, Picone, & Ferrigno, 2016).  The capacity to duplicate products and imitate services is simple, making it hard for salespeople to differentiate their products from competitors.

Additionally, competitiveness is temporarily based on the dynamics of well-informed buyers in the market.  Buyers can use technology and analyses products to identify the quality and easy to access products or services before making purchases.  An organization might fall out of the competition if a better product from another company developed, making the consumers shift their interest.

Another critical issue is the over-emphasis on competition and neglecting consumers’ needs and requirements (Dagnino, Picone, & Ferrigno, 2016).  Companies that focus too much on competitive advantage tend to place resources on what their competitors are doing to compare and neglect the consumer, better innovation, and create a unique brand.

Porter’s Three Generic Strategies

When deciding to purchase a product or service, different aspects must be considered to ensure that they fit within the consumer’s budget or liking.  The choice is solely based on the consumer by the organizations’ strategy is to provide a differentiated mechanism that will offer the consumers the different options from which to choose (Islami, Mustafa, & Latkovikj, 2020).  Porter’s Three Cognate strategies include cost leadership, differentiation, and focused approach, as they can be applied to different services and products from multiple industries.

Cost Leadership

The aspect of cost leadership is in line with Porter’s generic strategies is being a leader in cost within the industry or market dynamic.  However, this strategy is vulnerable to attacks from other producers who can sell their products or services at lower prices (Islami, Mustafa, & Latkovikj, 2020).  A company must then ensure they focus on both short processes and ensure the prices are maintained to achieve competitiveness through cost leadership.

Differentiation Strategy

Differentiation is the strategy in which a company makes its product or services unique, attractive, and different from its the competitors.  These aspects are industry dependent and can take additional functionality, offer technical support, extra features, and increase the brand image (Islami, Mustafa, & Latkovikj, 2020).  An organization must ensure agility with products and maintain the lead in differentiation to maintain competitiveness.

Focused Strategy

Companies that make use of this strategy concentrates on a specific niche market through the understanding of the market dynamics as well as the consumer needs.  Understanding these entities leads to the development of products and services that uniquely fit the market’s specifications and low-cost needs to make it affordable.

A company can add value to its operations through the utilization of these three generic strategies.  For instance, a company that uses the focus strategy can easily attain high market share and add value to the company by producing industry-specific products that create customer loyalty.  Additionally, understanding the trends and patterns of the market behavior is essential to the company to plan for production regarding the season, time, or year, and trending aspects at the moment; engaging with the clients is a better means to achieve these elements (Islami, Mustafa, & Latkovikj, 2020).

Similarly, those that offer the cost leadership better incentives for the consumers to afford the items than the competitors.  The strategy creates value through an increased customer base and high product sales.  These mechanisms generate value for the company and help it meet the required goals and objectives.

Porter’s Five Forces Model

Porter’s Five Forces is a model that analyzes five predetermined competitive forces that are responsible for shaping every industry by determining its strengths and weaknesses.  The mode also helps identify the industry structure and shape its corporate strategy (Chesula, & Kiriiny, 2018).  With the industry sector’s applicability, the model explains how and why various industries can sustain different profitability levels.  These five forces encompass competitive rivalry, supplier bargaining power, buyer bargaining power, the threat of substitution, and new entry threat.

Competitive Rivalry

This model focuses on the strength and number of competitors.  The nature in which the quality of their services or products compare with that of the company.  The higher the number of competitors and the high number of equivalent services or products, the lesser the company’s power to effectively compete.

Supplier Bargaining Power

This element determines how the supplier can choose the pricing either by increasing or decreasing their prices, which includes aspects such as the number of potential suppliers, the uniqueness of the product or service provided by the supplier, and the financial implications of switching to a new supplier (Chesula, & Kiriiny, 2018).  The higher the number of suppliers, the easier and cheaper it is to switch to an alternative supplier limiting supplier’s bargaining power.

Buyer Bargaining Power

This determinant requires the price to base on the buyer characteristics; these include how many buyers are available and how big their orders correlate to the production (Chesula, & Kiriiny, 2018).  Dealing with less savvy customers increases the buyer’s bargaining power, while a high number of customers reduces bargaining power.

Threat of Substitution

This model element focuses on the consumer’s easiness to acquire a new product or service like the one provided by the company (Chesula, & Kiriiny, 2018).  For instance, a consumer who purchases software services for a point of service system can acquire a new and improved design with fewer costs or shift to the manual stock-taking mechanisms.

The Threat of New Entry

The company’s competitiveness can be based on new market entrants’ capacity and overtaking or subverting the strategies to acquire a more extensive market acquisition (Chesula, & Kiriiny, 2018).  The easiness of entering a market creates a higher risk for rivals to enter the market and weakness the competitiveness or lower the position in terms of market share.

Conclusion

Business management consists of different entities that have contemplated to have a better and robust market setting-ensuring that all the market elements established in place and a proper strategic plan implemented is one way to facilitate growth and development. However, to achieve the goals, the organization must use useful tools such as an information management technology system.  The organizations also must understand the internal and external forces using SWOT analysis and prepare for competitiveness using Porter’s three generic strategies and Porter’s five forces model.

References

Al-Mamary, Y. H. S., Al-Nashmi, M. M., Shamsuddin, A., & Abdulrab, M. (2019). Development of an Integrated Model For Successful Adoption of Management Information Systems In Yemeni Telecommunication Organizations. International Journal of Scientific & Technology Research, 8(11), 3912-3939.

Baltzan, P. (2018). Business Driven Information Systems, 7th ed. New York, NY; McGraw-Hill/Irwin. ISBN: 9781259852275.