Business pressure, organizational responses, and IT support

The business environment is the combination of social, legal, economic, physical, and
political factors that affect business activities. Changes in any of these factors are likely
to create business pressure on organization. Organisation responds to these pressures
with activities supported   by IT.

There are three types of pressure that business face: market, technology, and societal
pressure.

Market pressure:

1)      Global economy and strong competition

Global market makes pressure through the decrease of labor cost, especially in
developed country. For example, when china copy everything and do it the same such
as; macbook air. An example of strong computation is the restaurant which located in
the same region.

2)      The changing nature of the workforce

Like increasing numbers of women in the work comparing with past. Also, people with
disabilities now work in all type of position.

3)      Powerful customer

Customers nowadays are having knowledge to realize what’s the appropriate cost for
certain kind of products and the quality of products and services. 
 Technology pressure:

1)      Technological innovation and obsolescence

New technological are creates many substitutes for products and alternative services
quality. These changes require business to keep up with consumer demands.
Sometimes the brand is become popular then it absolute like floppy.So, company has to
adopt the new technology.  

2)      Information overload

Data are register daily so it becomes hard to track all of these information. Information
technologies, such as search engines and data mining provide valuable support in
these efforts.

Social/political/legal pressure

1)      Social responsibility:
Each company have to keep some money from there budget to society. As government
force the company it become pressure especially  in terms of treated all people the
same.

2)      Compliance with government regulation and deregulation:

Change government regulation and policies are makes big pressure for company. Like
what happens nowadays in Oman.

Organizational responses

1) Strategic systems:

By adopting special technique that’s differentiate you from your competitors.

 2) Customer focus:

By take care of profitable customer.

3)      Make to order and mass customization:

Make to order by producing customized products and services. In mass customization
you produce a large quantity of items, but it customizes them to fit the desire of each
customer.

(Business Pressures, Organizational

Responses, and IT Support)
STUDY

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BUSINESS PRESSURE
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The business environment is the combination of social, legal, economic, physical, and political
factors that affect business activities. Significant changes in any of these factor are likely to create
business pressure on the organization.
* The three types of business pressures faced are: market, technology, and societal pressures.

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TYPES OF BUSINESS PRESSURES
Click card to see definition 👆
- MARKET PRESSURES: The Global Economy and Strong Competition; The Changing Nature of
the Workforce; Powerful Customers.
- TECHNOLOGY PRESSURES: Technological Innovation and Obsolescence Information Overload
- SOCIETAL/POLITICAN/LEGAL PRESSURES: Social Responsibility; Government Regulation and
Deregulation; Protection Against Terrorist Attacks and Ethical Issues

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BUSINESS PRESSURE
The business environment is the combination of social, legal, economic, physical, and
political factors that affect business activities. Significant changes in any of these factor
are likely to create business pressure on the organization.
* The three types of business pressures faced are: market, technology, and societal
pressures.
TYPES OF BUSINESS PRESSURES
- MARKET PRESSURES: The Global Economy and Strong Competition; The Changing
Nature of the Workforce; Powerful Customers.
- TECHNOLOGY PRESSURES: Technological Innovation and Obsolescence
Information Overload
- SOCIETAL/POLITICAN/LEGAL PRESSURES: Social Responsibility; Government
Regulation and Deregulation; Protection Against Terrorist Attacks and Ethical Issues

ORGANIZATIONAL RESPONSES
- STRATEGIC SYSTEMS - provide advantages that enable organizations to increase
market share and/or profits, to better negotiate with suppliers, or prevent competitors
from entering their markets.
- CUSTOMER FOCUS - is the difference between attracting and keeping customers by
providing superb customer service to losing them to competitors.
- MAKE-TO-ORDER - is a strategy of producing customized products and services.
- MASS CUSTOMIZATION - is producing a large quantity of items, but customizing
them to fit the desire of each customer.

E-BUSINESS AND E-COMMERCE - Buying and selling products and services

electronically.
* E-business is a broader concept than e-commerce.
- COMPETITIVE ADVANTAGE
- STRATEGIC INFORMATION SYSTEM (SIS)
- An advantage over competitors in some measure such as cost, quality, or speed,
leads to control of a market and to larger- than average profits.
- provide a competitive advantage by helping an organization to implement its strategic
goals and to increase its performance and productivity.
PORTER'S COMPETITIVE FORCES MODEL
(The best-known framework for analyzing competitiveness is Michael Porter's
competitive forces model (Porter, 1985))
(1) THREAT OF ENTRY OF NEW COMPETITOR
- is high when it is easy to enter a market and low when significant barriers to entry
exist.
* A BARRIER TO ENTRY is a product or service feature that customers expect from
organizations in a certain industry.
(2) THE BARGAINING POWER OF SUPPLIERS
- is high when buyers have few choices and low when buyers have many choices.
(3) The BARGAINING POWER OF BUYERS
- is high when buyers have many choices and low when buyers have few choices.
(4) The THREAT OF SUBSTITUTE PRODUCTS OR SERVICES
- is high when there are many substitutes for an organization's products or services and
low where there are few substitutes.
(5) The RIVALRY AMONG FIRMS IN AN INDUSTRY
- is high when there is fierce competition and low when there is not.

STRATEGIES FOR COMPETITIVE ADVANTAGE

- COST LEADER:
I can sell at a lower cost than you can.
- DIFFERENTIATION:
I am better because I am different.
- INNOVATION: I am doing something new and you can't catch up.
- OPERATIONAL EFFECTIVENESS: I can do the same thing more efficiently than you
can.
- CUSTOMER ORIENTED: I treat my customers better than you do.

BUSINESS-IT ALIGNMENT
(Which we will call ALIGNMENT)
Is the tight integration of the IT function with the strategy, mission, and goals of the
organization. That is, the IT function directly supports the business objectives of the
organization.