chapter 3
strategic initiatives for implementing competitive advantages.
Strategic Initiatives.
* Organizations can undertake high-profile strategic initiatives including:
- Supply chain management(SCM)
- Customer relationship management(CRM)
- Business process re-engineering (BPR)
- Enterprise resource planning(ERP)
Supply Chain Management.
- Supply chain management(SCM)-involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.
- Four basic components of supply chain management include:
> Supply chain strategy- strategy for managing all resources to meet customer demand
> Supply chain partner- partner throughout the supply chain that deliver finished products, raw material, and services.
> Supply chain operation- schedule for production activities
> Supply chain logistics- product delivery process
wal-mart and procter & gamble (P&G) SCM.
paper manufacturer <> packaging supplier <> procter & gamble<> wal-mart warehouse or distributor <> wal-mart store <>customer <> cocoa oil manufacturer<> scented manufacturer.
*indicated information flows for products, pricing, scheduling, and availability
=> Effective and efficient SCM systems can enable an organization to :
- Decrease the power of its buyers
- In crease its own supplier power
- Increase switching costs to reduce the threat of substitute products or services
- Create entry barriers thereby reducing the threat of new entrants.
- Increase efficiencies while seeking a competitive advantages through cost leadership.
=> Effective and efficient SCM system effect on porter's five forces.
decrease
Buyer power Organization's supply chain Supplier power
Threat of substitute product or services
Threat of new entrants
increase
Customer Relationship Management.
- Customer relationship management (CRM)- involves managing all aspects of a customer's relationship
with an organization to increase customer loyalty and retention and an organization's profitability
- Many organizations, such as charles schwab and kaiser permanente, have obtained great success through the implementation of CRM systems.
- CRM is not just technology, but a strategy, process and business goal that an organization must embrace on an enterprise wide level
- CRM can enable an organization to :
> Dentify types of customer
> Design individual customer marketing campaigns
> Threat each customer as an individual
> Understand customer buying behaviors
Business Process Re-engineering.
- business process - a standardized set of activities that accomplish a specific task, such as processing a customer's order.
- business process re-engineering (BPR)- the analysis and redesign of workflow within and between enterprises:
> The purpose of BPR is to make all business process best in class
- Re-engineering the corporation- book written by michael hammer and James Champy that recommends seven principles for BPR.
Finding Opportunity Using BPR.
> A company can improve the way it travels the road by moving from foot to horse and then horse to car.
> BPR looks at taking a different path, such as an airplane which ignore the road completely.
> Progressive insurance mobile claims process
> Type of change an organization can achieve,along with the magnitudes of change and the potential business benefit
Enterprise Resource Planning.
- Enterprise resource planning(ERP)
=>integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprise wide information on all business operations
- Keyword in ERP is "enterprise"
- Sample data from a sales database
- Sample data from an accounting database
- ERP systems collect data from across an organization and correlates the data generating an
enterprise wide view
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