Competitive Advantage and Technology Essay

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Total Length: 1545 words ( 5 double-spaced pages)

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Services and Capabilities

Implementing Service Expansion

Evaluation of the Current Situation

Formulation of the Desired Future State

Implementation

Lessons from Acxiom

Expanding service offerings can be a daunting undertaking. It requires meticulous planning, particularly considering the organisation's current situation and its desired projections. This paper provides a plan for integrating new additional services into Smith's organisation. Attention is specifically paid to the steps the organisation can follow to seamlessly add new services, showing the appropriate transition path from its present state to its desired future state.

Implementing Service Expansion

Service expansion can be achieved by following three broad steps: 1) evaluation of the current situation; 2) defining the desired future state; 3) and implementation. The following section looks at each step individually.

Step 1: Evaluation of the Current Situation

The first step is the most crucial one. It involves the assessment of both the internal and external environment. The internal environment specifically relates to the strengths and weaknesses of the organisation (Hill & Jones, 2010). Attention is paid to the organisation's capabilities, current offerings, competitive advantage, financial strength, procedures, processes, structures, and other aspects specific to the organisation. In this case, for instance, Smith's organisation caters to 50 major business applications, fairly reliable computer and network equipment, an extremely flat organisational structure, a rapidly growing customer base, strong relationships with suppliers, as well as substantial competitive advantage in the hosting business. Nonetheless, significant weaknesses have emerged in the recent past, causing the organisation to start losing business to competitors. Notable issues include slow response times, service degradation, poor communication with clients, incompetent support staff, regular outages, and rising costs. Lack of a fully-developed marketing function also presents a major weakness. If not immediately addressed, these weaknesses could affect the reputation the organisation has built over the last five years.

The external environment involves a number of elements, including customers, opportunities and trends, as well as competitors and threats (Hill & Jones, 2010). Smith's organisation operates in the technology hosting industry. The organisation serves a wide array of clients in diverse verticals and industries. Service reliability, consistency, quality, and affordability are the three major needs of clients in the hosting business. Clients expect seamless internet connectivity and timely service at an affordable cost. Indeed, service providers in this industry build their competencies around these aspects.

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Players with the aforementioned competencies are better placed to take advantage of the opportunities in the market. The technology services industry has grown tremendously in the last few years, with business organisations in various sectors and industries, small and large, increasingly embracing cloud computing and other related services. The demand for technology services is expected to be even greater in the near future. This provides an important growth opportunity for Smith's organisation. Other opportunities stem from virtual reality, big data, social networking, e-commerce, outsourcing, and foreign markets (Bughin, Chui & Manyika, 2013).

A major threat for Smith's organisation, however, is competition. The organisation operates in a stiffly competitive industry. larger companies such as IBM, Microsoft, and Oracle, as well as thousands of small and medium-sized vendors, such as MCC Technology and Rackspace dominate the industry. Indeed, the threat of rivalry in this industry is strong. Ease of entry into the industry further compounds the threat for existing businesses. Smith's organisation now faces the threat of competition. With numerous options to choose from, clients may soon switch to other providers in search of better quality, efficiency, and cost. Other threats that may be worth consideration relate to the larger macroeconomic environment (political, legal, economic, social, and environmental factors). For instance, unfavourable economic occurrences such as recession may increase operating costs or reduce expenditure on technology. Additionally, with the organisation expanding its operations globally, risks such as political instability and legal difficulties cannot be ignored.

Step 2: Formulation of the Desired Future State

Understanding both the internal and external environment enables formulation of the desired future state, which denotes the goals the organisation wishes to achieve. From step 1, it is evident that the quality of services offered by Smith's organisation have been deteriorating in the recent past, affecting the organisation's financial performance. At the same time, however, it is also evident that the industry offers numerous opportunities for growth. Based on this premise, the future direction of the organisation can be determined. Smith's organisation desires to be the preferred provider of technology services and increase its service portfolio in the next five years. This goal can be broken down into….....

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