Michael Porter is a management researcher who helps organizations to succeed in their dealings. Porter argues that a firm gains competitive advantage by concentrating on cost leadership or differentiation of products. According to the researcher, these strategies help firms to expand their market share, and this leads to high volumes of sales and profits. Organizations interested in succeeding should expand and control their sources of competitive advantage (Gilchrist, Mooers, Skrubbeltrang, & Vachon, 2012). Wal-Mart, a store that sells a diversified line of products gains its competitive advantage by charging low prices for all goods besides differentiating stores and services.
Wal-Mart gains competitive advantage by using cost and differentiation strategies. The company ensures that it incurs low cost of producing, packaging, and marketing products. The minimal costs then help the firm to charge low prices for electronics, soft drinks, and other lines of products. Wal-Mart pays workers the lowest wages among other stores in the United States despite the fact that the labor union considers this as exploitation of workers. The store differentiates its products by using unique packaging, which attracts new and existing customers. The store also differentiates services by introducing unique supply points where people buy products, for example, at Sam Walton consumers purchase only groceries (Gilchrist, Mooers, Skrubbeltrang, & Vachon, 2012). Customers pay for the products using a variety of methods, for example, people may use master or debit cards. This is a form of differentiation of services that exist in the retail outlet.
I would use Porter’s strategies to leverage information technology resources in an organization by using several methods. I would acquire a strategy of purchasing technological goods in large amounts so that I can get quantity discounts. The discounts reduce the cost of the goods, and this enables a firm to lower price that consumers pay to acquire the products. The technological systems would make work easy, fast, and cheap (Grant, & Royle, 2011). I would also advise the firm to use standardized products because this form of differentiation helps to minimize expenses. The last strategy would be marketing the services of the organizations to generations that prefer the use of technological systems, especially the youth. The technological system that the firm uses would collect information from the market, and this helps the company to realize the areas that need improvements. The system enables the organization to acquire customer loyalty, large volume of sales, and high profits in the long run.
Michael Porter argues that efficient management and success of firms is obtained when an organization acquires competitive advantage in a certain field. The researcher argues that competitive advantage is obtained from minimization of cost, differentiation, and market scope. Wal-Mart stores utilizes the strategies by minimizing cost of production, charging low prices for products, and differentiating goods and services. I would use Porter’s strategies to control information technology in a firm by standardizing products, and focusing on market segments that are interested in services that use information technology.
References
Gilchrist, M., Mooers, D. L., Skrubbeltrang, G., & Vachon, F. (2012). Knowledge discovery in databases for competitive advantage. Journal of Management and Strategy, 3(2), 2.
Grant, G. L., J.D., & Royle, M. T. (2011). Information technology and its role in creating sustainable competitive advantage. Journal of International Management Studies, 6(1), 1-7.
