CHAPTER 3 : Strategic Initiative For Implementing Competitive Advantages

Strategies initiatives

Organizations can undertake high-profile strategic initiatives including:

• Supply chain management (SCM)
• Customers relationship management (CRM)
• Business process re engineering (BPR)
• Enterprise resources planning (ERP)

➤Supply Chain Management (SCM)

It 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 customers                                             demand
• Supply chain partner – partners throughout the supply chain that deliver finished                                        products,raw materials and services
• Supply chain operation – schedule for production activities
• Supply chain logistics – product delivery process

Effective and efficient SCM systems can enable an organization to:

• Decrease the power of its buyers
• Increase 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 efficiency while seeking a competitive advantages through cost leadership

➤Customers Relationship Management (CRM)

                       

-Its 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:

• Identify types of customers
• Design individual customer marketing campaign
• Treat each customer as a individual
• Understand customer buying behavior

➤Business Process Reengineering (BPR)

                                      

- It is a standardized set of activities that accomplish a specific task, such as processing a               customer’s order.

-The analysis and redesign of workflow within and between enterprises.

• The purpose of BPR is to make all business processes best in class

      - Reengineering 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
• Types

➤Enterprises Resource Planning (ERP)


                   

-It  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”.

-ERP systems collect data from across an organization and correlates the data generating an enterprise wide view.