The most critical success factor for any organization operating in the competitive market is a competitive advantage. Competitive advantage has its roots in the concept of value creation and distribution. In economic terms, a firm has a competitive advantage if the value it creates in an economic exchange is higher than the value of not undertaking the exchange. This shows that a competitive advantage occurs when the opportunity cost of undertaking an economic exchange is lower than the value of the exchange. Different firms have different views on the usage of information technology. However, an organization can use information technology (IT) to achieve and sustain a competitive advantage (Baker, 2012). Currently, IT is the backbone of the society. From our home lives to working lives, IT shapes most of the things people do on a daily basis. For organizations, adapting to the usage of IT is the new trend. Organizations today use IT for different purposes from managing employees to increasing sales.

IT and Competitive Advantage

One of the major ways through which The International Food Group (IFG) can use IT to create a competitive advantage is through online promotions and advertisements. Since the discovery of the internet, the concept of marketing has been revolutionized. The traditional methods of marketing are rarely utilized by organizations today. As opposed to physical advertising, online advertising enables an organization to reach as many customers as possible with ease (Breznik, 2012). The medium is very cost effective in that one marketing employee can handle an online advertising platform as opposed to physical advertising which requires several agents. Wu et al. (2015) argue that being an open interactive forum, online advertising provides consumers with an opportunity to participate in the organization’s communications. Organizations encourage consumers to unleash their creativities thus contributing to organizations marketing activities. Through the creative nature of online marketing, consumers contribute to an organization’s marketing at no cost. This can create a competitive advantage to IFG since it will lower the cost of advertising, which takes a large portion of organizations costs.

Another evolutional use of IT is e-business. With the spread of internet, e-business has expanded and gained attention in all sectors. Pilinkiene et al. (2013) argue that e-business solution such as resource planning and supply management create various benefits to an organization. Studies done on the subject of e-business relate e-business with business processes. Research has shown that e-business improves business processes such as supply management and sales. E-business creates efficiency in the business processes, which is associated with improved performance of business.

However, several studies have criticized the idea that improved performance is linked to a competitive advantage. Hao (1999) in his work made the claim that competitive advantage is related to organizations rivals. Without the rivals, there is no way to measure competitive advantage. Thus, the analysis of competitive advantage is thus based on comparing organizations on certain dimensions. In the sense that IT is seen to improve performance, this does not necessarily mean that it create a competitive advantage in that an organization’s performance is independent of other rivals. An organization measures its performance based on past performances and not as a comparison to rivals. This argument tends to refute the direct relationship between IT and competitive advantage.

However, as explained by Xu and Quaddus (2013 p.28), a business must implement strategies to counter Porter’s five forces of competition. These forces are rivalry, threat of new entrant, substitute goods, customers and suppliers bargaining powers. IFG can counter the five forces by using five competition strategies including cost alliance, leadership, innovation differentiation, and growth. IT can be very critical in enabling the success of these strategies. First, IT can reduce the cost of doing business thus enabling IFG to have a low-cost competitive advantage (Xu and Quaddus, 2013 p.28). Regarding differentiation, IT can be applied in creating differentiated business features thus reducing competition. The most important nature of IT is its’ innovation capability. IT can assist in developing new products or new markets or even change the business processes via automation. With IT, IFG can expand their operations domestically and in the international market. IT can also be used by IFG to enhance relations with other business through applications and virtual organizations.

Recommendations for Challenges Facing IFG

After merging with Glow-Foods, IFG put together a team to come up with ideas into how IT can be utilized to tap into the young adults market. On its own, Glow-Food had done well in capturing this market, and IFG wanted to capture the market too. However, even after the team generated ideas, several challenges were raised by the other employees. Such challenges have to be overcome before the ideas of tapping into the youth market can be implemented.

A major challenge facing IFG is the fear of negative perception. The company is planning to use an interactive website to connect directly with the customers. However, the challenge is that once connected to the customers; a negative perception would destroy the reputation of the company. The company is facing a perceived risk of negative reception in online marketing. Given that consumers perceive products attributes based on brand image, a negative perception would be harmful to the company. A good recommendation for managing the brand image is to maintain a good online store image. IFG has to adopt the use of online platforms to promote its business; the idea of not adopting the interactive website is not an option. In addition, Glow-Foods had already tried the idea, and it was a success. By maintain a good environment in the online platform, the company will capture the youth and young adults market as it targets. However, the perception by employees has to change. Employees including those working in the IT department are worried that the idea may not work. Such a bad perception about the idea will result in its failure. The idea cannot be implemented without the support of relevant employees.

Another challenge faced by IFG is how to manage the information generated from the online interactions. As revealed, the company tried such an idea ten years ago, but no one knew how to handle the information generated. The employees need to be trained in the management of such interactive data. Since the team that is set to implement is idea already knows how to manage the data, other employees need to be updated so that they can collaborate in the implementation. Chen et al. (2012 p.1167) argue that a huge amount of data about customers can be collected from the web and then organized after which it is analyzed and visualized through different web mining and text techniques. Such data can be used to make decisions about a product and how to improve it. The interactive website will not only introduce the company to the younger generation rather it will also offer the company an opportunity to collect information about the market segment and make improvements.

Another challenge faced by the company is innovation capabilities. The company does not have an innovation strategy. Any new ideas seem to be criticized by most of the employees even before they evaluate them (Yoo et al., 2012). The company needs to develop strategies that will be followed in idea innovations. The organizational procedures seem to be hindering the innovation process in that there are many structures of communication to be followed. For innovation, the company needs to change the hierarchy company culture to the adhocracy culture. The adhocracy culture as stipulated by Naranjo-Valencia et al. (2011 p.58) is a culture that emphasizes on change, flexibility. Its key values emphasize on entrepreneurship, creativity, and risk-taking. The hierarchy culture focuses much on the efficiency and internal organization rather than the external environment. Such a culture hinders the employees from assuming the risk of innovation (Choo, 2013). The employees as evident in IFG are so concerned with the risks of innovation rather than the innovation itself. For innovation, an organization has to focus on the external environment rather than the internal environment.

Information technology is the key to organizational success. From improving efficiency to widening the customer reach base, IT can be used to improve all business processes and maintain a competitive advantage. However, an organization has to adopt IT first and integrate it into its culture. Change is inevitable, and organizations have to accept it at some point.

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