How can information systems create a strategic advantage for companies?

Creating a strategic advantage through information systems involves leveraging technology to enhance capabilities and foster cooperation within an industry. Building industry-wide, IT-supported consortia and symposia enables companies to share best practices, insights, and resources. This collaboration can lead to innovation, improved efficiency, and the establishment of standardized protocols that benefit all participants, allowing them to respond more effectively to market changes and competitive pressures.

In contrast, raising the bargaining power of suppliers, encouraging the entry of new competitors, or enforcing standards that diminish the differences between competitors typically do not create a strategic advantage. Instead, they might facilitate more competition or shift the power dynamics in ways that can disadvantage existing firms. Strategic advantages stem from differentiating a company's offerings or enhancing operational efficiencies, which can be significantly amplified through collaborative efforts supported by robust information systems.