Effects of IT on Competition

Carstea C., Ratu I., Patrascu L., Plesea D., Damian D., David N.

9th WSEAS International Conference on Simulation, Modelling and Optimization, Budapest, Hungary, 3 - 05 September 2009, pp.69-73 identifier

  • Publication Type: Conference Paper / Full Text
  • City: Budapest
  • Country: Hungary
  • Page Numbers: pp.69-73
  • Istanbul Technical University Affiliated: No


To solve customer service problems, a major distributor developed an on-line order processing system and made it available for direct access by its customers. The system was intended to cut order/entry costs, to speed processing time and to provide more flexibility to customers. Although, nitially, the company's expectations were modesr, the system gave them significant competitive advantage; customer satisfaction increased and the distributor also noted that revenues increased and market share improved. These benefits continued as long as the company continued to innovate. But five years later, in an attempt to control internal costs, the firm turned away from its commitment to customer service. Despite improved operating efficiency, profits and market share rapidly declined