Question

How does information and knowledge management link to competitive advantage? Discuss the reasons why or why not a dominant firm might or might not consider attacking smaller competitors to increase market share?

Answer 1

Informational and knowledge management are very broad terms in the organisation's learning and developmental theories. The knowledge and informational management tells about how the organistation make the use and channelise the knowledge present in the organisation in various forms to maximise the optimisation of the resources. It helps to have a deep understanding about how one can use the knowldge and intellectual resources present in the organisation at large. It helps to achieve the competitive advantage by:

1. Using the best human resource: Knowledge management helps to optimise and use the best of your human resource present in your organisation. By beinv aware of the knowledge exisiting in them and training them more to gain more insights and values, an organisation can easily achieve the targets set and have a good competitive advantage by having a strategic resource at its finest.

2. Strategic techniques: By haing good amont of knowledge about the resources and the information of the market and the organisation as well, one can develop the most efective and dynamic strategies to not only deal with the inner environment but also the external environment of the firm to use the resources.

3. Database Management: At last, the informational management would help the firm to gather the data from the markets and the industry, convert the data into knowledge and seek the use the best optimisation of that knowledge to understand the demands of the customer and seek to have a advantage over competitors.

2. We have seen a lot of examples where many dominating companies like Google have bought or tried capturing small businesses and companies like Yahoo under them because of the following reasons:

1. Funds: Many a times a small business is not able to have effective and required funds to continue its operations. In that case, a dominating organisation takes over the small organisation in order to help them and also increase the market base of the organisation by merging the funds, assets and the liabilities.

2. Resources: By merging two and more organisations, resources are increased. More people and resources could meet more expectations from the market and thus small companies are taken over by dominating ones.

3. Market Share: At last, market share is increased effectively for the organisation as it's own market rate plus the merging organisation's rate are joined together and goodwill is provided to the smaller one which increased the market share and the value in the industry which benefits to the dominating company only.