Creating Competitive Advantage With Internet Technology

• Main Author: Raciti, Robert C.
• Published: NSUWorks 1998
• Subjects: Computer Sciences
• Online Access: http://nsuworks.nova.edu/gscis_etd/784

This study resulted in a paradigm which will enable Fortune 1000 companies to quantify the competitive advantage derived from their Web-based applications. With this model, Information Technology (IT) managers are better equipped to understand the strategic importance of the Web within their business. This author used an instrument called CAPITA (Competitive Advantage Provided by an Information Technology Application) to quantify the Web's effect on the competitive advantage of a company. The CAPITA is an instrument that measures the effect of an IT application on the numerous aspects of competitive advantage (Sethi & King, 1994; Sethi & King, 1991; Sethi, 1988). The CAPITA was used to determine the Web's strategic role in business by analyzing the data collected in this investigation and by comparing this author's research data with data from a previous study conducted by Sethi (1988). The instrument was issued to 1000 senior Information Technology (IT) executives in Fortune 1000 firms. 50 valid responses were received and analyzed. The data collected in this investigation were analyzed by comparing the Web applications that were developed specifically to create a competitive advantage to those applications that were developed for other purposes. The two group unpaired t test was used to quantify the difference between the two groups. This comparison empirically supports the statement that Web applications can be used to create aspects of competitive advantage. When comparing strategic Web applications to non-strategic Web applications, strategic Web applications were measured to have a greater alignment with organizations' business strategy (12 = .01, one-tailed), a lower cost of marketing the companies' final product (12 = .03, one-tailed), a lower cost of recruiting, hiring, training, development, and compensation of personnel (12 = .05 , one-tailed), a lower cost of interacting and coordinating activities with suppliers (12 = .04, one-tailed), and an improved ability of the primary users to order resources (12 = .02, one-tailed). A comparison of the data collected in this investigation with data collected from Sethi (1988) in a previous study does not support the statement that Web applications are as strategic as traditional strategic applications. The one group t test was the statistical test used to quantify the difference between the two groups. When compared to web-based applications, traditional strategic applications were determined to have a greater alignment with the organizations' business strategy (12 = .02, one-tailed), and greater top management support for the application (11 = .02, one-tailed). This supports the research literature that suggests that Fortune 1000 firms do not fully understand the strategic importance of Web-based applications (pant & Hsu, 1996; Cronin, 1996a). The data collected in this author's investigation also provide a benchmark that quantifies the competitive profile for Web applications within Fortune 1000 companies. This benchmark can be used to determine the competitive implications of Web applications within a company by administering the CAPITA instrumentation and comparing the results to the benchmark.