CHAPTER 3

Chapter 3 – Strategic Initiatives for implementing Competitive Advantages

Strategies initiatives

-  Organizations can undertake high-profile strategic initiatives
   including;

Ø  Supply chain management (SCM)

Ø  Customers relationship management (CRM)

Ø  Business process re engineering (BPR)

Ø  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;

ü  Supply chain strategy – strategy for managing all resources to
  meet customers demand

ü  Supply chain partner – partners throughout the supply chain
  that deliver finished products, raw
  materials and services

ü  Supply chain operation – schedule for production activities

ü  Supply chain logistics – product delivery process

-  Effective and efficient SCM systems can enable an organization
   to;

ü   Decrease the power of its buyers

ü   Increase its own supplier power

ü   Increase switching costs to reduce the threat of substitute
  products or services

ü   Create entry barriers thereby reducing the threat of new
  entrants

ü   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
   Permanent, 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;

Ø    Identify types of customers

Ø    Design individual customer marketing campaign

Ø    Treat each customer as a individual

Ø    Understand customer buying behaviors

  

Business Process Re-engineering (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

ü     The purpose of BPR is to make all business processes 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

ü  A company can improve the way it travels the road by
    moving from foot to horse and then horse to car

ü  BPR looks at taking a different path, such as an airplane
    which ignore the road completely

ü  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