Introduction

LDirect Company initiated by Tom Hardy, which supplied Laser-disk records and audio selections to people within the local area. He successfully utilizes the developed website to promote his business to an international level. In the prospective five years, their business seeks a steady development as various new clients were generated. He diversified his services and started to supply compact disks and audiotapes with the help of the website. As he hired 10 people to assist with the expansion of business, invested capital in information technology, developed a customer database and establishes links with supplier and distributors (Krichevsky and Johnson, 2015). In the following, an effort has been made to discuss the significance of Information technology, which can be used to manage the threat utilizing five forces analysis. In addition, describe the relationship among the information system & business strategies, and align both the strategies in an effective manner.         

Information Technology can be used to manage the threats using Porter’s five forces

LDirect seeks to recognize that they face increased threats from many other organizations who were delivering online purchasing facilities and dealing with the challenges of illegal pirating, which is rapidly developing in the industry (Pearlson, Saunders and Galletta, 2016).   

Porter’s five forces analysis

(Palacios-Marqués, Soto-Acosta and Merigó, 2015)

• The threat of new entrant- It is stated that LDirect is facing the threat of new competitors, which are equipped with value propositions and new digital-based methods. Information technology can be used to manage threats by developing new business models and establish a diversified platform for digital business. They can utilize cloud technologies, cyber-security, intelligent automation, mobile & social media analytics, and the Internet of Things to improve the value proposition in the future. This IT industry is significant because of its customer base and rapid development.    
• Bargaining power of buyers- LDirect biggest driver of digital business emerges from the needs and preferences of customers. They are facing the threat of fulfilling the customer requirements and attain the economies of scale at the minimum time. They need to maintain its position as a customer can easily switch so bargaining power of buyer is high so they also need to modify their website and provide unique service to people who are requesting video and audio recording. Information technology can be utilized to manage threats by continuous corporate innovation across business processes, products, models, operations, and services (Marin et al., 2015).
• Bargaining power of suppliers- Suppliers can slow down or quicken the adoption of digital-based business models, which influence the LDirect. Information technology can be used to manage the threats, which are identified as LDirect are not maintaining electronic links with suppliers and maintaining a customer database. They are receiving supplies from various music distributors but then also it cannot achieve the economies of scale.  It can be managed by utilizing the Application Programming Interface to integrate their capability to form a new collaboration. It is stated that they need to use their bargaining power to decrease the validity of integrated models where the supplier can use the models to embrace the customer experience.
• The threat of substitutes– In respect of the digital business, the threat of substitutes might replace LDirect offerings, which are differentiated from other product. It is stated that they are currently supplying DVDs, LD records, CDs and audiotapes in which there are many substitutes available in the music industry. Therefore, the customer can switch to another substitute and generate an effect on the profitability and market share of the industry. Information technology can be used to manage the threat as they can develop a long-term revenue stream from the digital services than the one time sale of the product. The threat of substitutes is high in the music industry as many suppliers are available for delivering through online recording (Bondarenko et al., 2017).
• Industry Rivalry- It is stated that existing competitors are seeking for digital business. This rivalry among competitors of LDirect has added fuel to fire as it is increasing because of entry and exit barriers which are slowing down because of the low cost of business models and they need to integrate a set of services to improve their customer experience. Information technology will assist in developing competitive advantage and manage key processes in aligning the strategies. They need to negotiate the sale of return with all the substitutes and ensure that recording which is provided to its customer is free from piracy (Toro-Jarrín, Ponce-Jaramillo and Güemes-Castorena, 2016).

The relationship between Information system strategies and business strategies

It is stated that earlier LDirect communicate to their customers based upon receipt of order and does not utilize its information of customers to encourage sale and customer purchasing habits. This is the weakness in the strategy of LDirect, which leads to slower down in the expansion and diversification of the industry. They are offering unique and attractive services to people so that they can align both the strategies in an effective manner. To fulfill such queries is very time consuming and costly, which requires competence and expert knowledge (Wu, Straub and Liang, 2015).

Business strategy adequately remains the same to analyze the market and delivering effective marketing strategies and services to customers, which assist them to attain the strategic goals and objectives. Information technology assists organization in their strategy in analyzing the new market to deliver the DVDs, CDs, and audio recordings in effective price without piracy. It also assists in establishing new products and services so that productivity can be generated and enhance value chain in managing the threat of the LDirect. This growth and development enable LDirect to rethink upon the information system strategies, which generates new value for old as well as prospective customers with economies of scale and achievement of forces. This is the reason for the transformation of the relationship between business strategies and information system strategies, as they need to utilize customer information to achieve the success and growth in the future. It is to be suggested by Kevin that they should hire tele-employees to manage with this side of the business (Nan and Tanriverdi, 2017).  

It carries value to new markets and generates different services for existing markets. It is stated that with that competition increased, they need to rethink to make their Information technology even stronger. Information technology allows cooperating towards slowing down the cost, just-in-time delivery, and empowers them to identify different ways to add value to the clients. The relationship between both the strategies has been changed because of automated checkouts, which are recently been held as similar to just in time and inventory management processes. Similar technology will replace the scanner and tracks the record of customers who are purchasing online DVDs. Another change, which has been identified as LDirect, need to deliver online ordered products with a possibility at home or store close to home. It can be regarded as a huge transformation in the IT landscape in which the overall process can be automated to the physical delivery of the products. This needs a transformation in Information technology as well as business strategy. It is quite evident that it has not changed for the most part, as IT manages to be as a supporting function for most of the organization involving LDirect, the exception are those that digitally deliver the products and services (Altamony et al., 2016).

The significance of IT has been increased largely as the integration of automation, outsourcing, virtual work, and shared services, which has transformed the internal dynamics of several companies involving LDirect. However, the relationship of corporate to IT strategy has not changed much. They should constantly enhance the LDirect website and manage both the strategies. It is not easy to provide and diversify our services in the international market and to adapt to such change might incorporate to rethink upon business strategy. Business strategy should exploit information system strategy to make it profitable and successful. It would also assist in recognizing opportunities for information systems to maintain a competitive advantage. They should effectively align both the strategies, which can provide an international service and utilize information of the customers efficiently (Akter et al., 2016).                      

LDirect align both the strategies

Alignment between the business and the information systems is quite a unique combination which is present is the key driver in taking the organization to the next level. The information systems not only ease downs the working of the business but also helps in enhancing the production of the business. In the case of the LDirect, the computing facilities within the LDirect are following the trends even if the size of the company is a bit small. There are facilities, which are not subjected to such small innovation rather each department is equipped with the latest personal computers with the support of the client-server based technology of modern nature. The relational database management system and the standard office systems are installed on each computer for providing accuracy in the information gathered by the manager. The best thing about this system is its readiness, which means when the information is required by the department the information is available without any hassle. The system does provide the access but they are subjected to the rights of the users (Luftman, Lyytinen and Zvi, 2017).  

As per the case study in the view of Tom, he is continually developing the website to make sure it benefits and pursue this as one of the business strategies. The company because of the few key elements that will benefit the company introduces all these steps and few of the examples are faster time to market, increasing profitability, to provide the sound and the smooth customer experience and improved collaboration. The greater the industry more will be the IT agility. The importance of the synergy can make the company more profitable and see the return on investment because they are required to hit the goals with fewer efforts. While there may be no standard way to align so that the organization like LDirect will improve the operational efficiencies (Cui et al., 2015).

This overall will create the strategic technological transformation and the continuous improvement in the strategic systems will help the firm to provide better opportunities to the customer. Since the information technology sector is the one, which is growing rapidly, therefore it is advised to the company to be in alignment with the information systems, as it will attract more customers to buy the DVDs and CDs online. This will not only save time and energy but will create the facilities of ease for the niche (Rosemann and vom Brocke, 2015). Though the magazines are also introduced from the point of the view of delivering the regular updates about the products to the customers yet the information systems will help the customers to get the access of the news right on the website which will save the time, energy and cost of the customers as well. Hence, it can be concluded that there shall be a proper alignment of the business strategies and the information systems to cater to the needs and the preferences without having to expand the lots of dollars. LDirect is an example of the creation of internal technology and the business strategies themselves (Tarhini, Al-Dmour and Obeidat, 2015).

Conclusion

LDirect is an organization, which is set up Tom Hardy and distributes DVDs, Laser disk records, and audio as well as video recording to people within the local area.  He expands his business and seeks to find a steady growth in the prospective four years. In conclusion, it has been stated that LDirect has to deal with increased threats from other organizations and Information technology plays a great significance in mitigating the threats. In addition, the relationship among the business as well as information system strategy has been discussed above.

References

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