Case 4: GE, Dell, Intel, and Others: The Competitive Advantage of Information Technology

Case Study Querstions and Answer:

1. Do you agree with the argument made by Nicholas Carr to support his position that IT no longer gives companies a competitive advantage? Why or why not?

Discussion points would include the following:

• IT costs are now the same as other traditional costs such as human resources, physical resources, etc. As such IT costs are not as important in terms of the impact on a company’s strategic planning.
• If all companies in a competitive industry invest in IT at the same approximate level of expenditure then IT cannot be a strategic advantage to a given company.
• The IT infrastructure changes rapidly and thus a continual investment in new IT influences a company’s strategic planning.
• The IT infrastructure and the continual improvements made to it allow a company to adjust the mix of traditional resources such as physical and human resources to provide a highly competitive company.

2. Do you agree with the argument made by the business leaders in this case in support of the competitive advantage that IT can provide to a business? Why or why not?

Points to consider would include:

• The lifeblood for productivity in a service oriented company is IT and not plants and equipment.
• How it is used determines the competitive advantage of the IT infrastructure.
• Some segments of the IT infrastructure are reaching maturity and not much can be gained by additional changes; however other areas aren’t close to maturity and gains in competitive advantage can still be made.
• All companies are not at the same level of IT usage and you cannot generalize that increased IT expenditures no longer have value to a company.

3. What are several ways that IT could provide a competitive advantage to a business? Use some of the companies mentioned in this case as examples. Visit their websites to gather more information to help you answer.

Ways to provide a competitive advantage may include:

• Improve the customer relationship management system.
• Create new uses for information to remain competitive.
• Leveraging the knowledge-capital as an integral part of strategic planning.
• Determining the best mix of knowledge, software and hardware to be highly competitive.
• Improve the value chain for the company.