Synergise IT

Competitive advantage was coined by Michael Porter where he proposed that businesses are exposed to five competitive forces – threat of new entrants, rivalry between existing firms, pressures from substitute products, bargaining power of buyers and bargaining power of suppliers. Porter also devised three strategies that can combat the forces from the environment and they are – differentiation of products and services, cost reduction and focus on a particular market segment.

While there are many ways in which organisations can pursue to achieve competitive advantage, it would be futile if other organisations can replicate the same method used quickly. However, with technological advancement, competitive advantage can be replicated quickly and the first mover advantage gap is being decreased greatly. Therefore in order for an organisation to enjoy sustainable competitive advantage, it needs to continually be the first mover over a period of time. Let’s take Google as a case study.

Google has been a very innovative company with their main line of business developing search technology. Over the past few years, Google has expanded their business to many parts of the internet which ranges from desktop search engine, email services, satellite imaging, online translation, blogs, online shopping, e-books, scholarly search and many more. While many of these applications doesn’t bring in much revenue, the collection of innovative and useful products and services has attracted many more people to use it search services thus providing excellent advertising revenue.

So how can Enterprise 2.0 provide sustainable competitive advantage for organisations? If an organisation is highly adaptive to the environment and is capable of exploiting opportunities on a continuous basis then it would be able to achieve some level of sustainable competitive advantage . This can be achieved through continuous learning, experimenting and effective communication and Enterprise 2.0 provides a platform to do this. However, it doesn’t mean an organisation has the platform they would achieve sustainable competitive advantage. There must be a conducive culture, social strategy and eager employees within an organisation to effectively identify any opportunities.

Enterprise 2.0 can help to capture, store and manage the implicit and explicit knowledge within an organisation and this is highly important for larger organisations. Enterprise 2.0 can help to retain the vast amount of knowledge within the organisation. The advantage of Enterprise 2.0 over Knowledge management systems is its ability to connect people from around the organisation and effectively use employees brain power.

I would like to conclude by saying that Enterprise 2.0 does not provide an organisation sustainable competitive advantage but is an excellent enabler for organisations to identify any potential opportunities to gain competitive advantage - constantly.