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Monday 26 August 2013

CHAPTER 3



CHAPTER 3
Strategic Initiatives For Implementing Competitive Advantages
·         Supply Chain Management (SCM)
ü  Involve the management of information flows between an amount stages in a supply chain to maximize total supply chain effectiveness and profitability.

·         Four basic components of supply chain management include :
v  Supply chain strategy – strategy for managing all resources to meet customer demand
v  Supply chain partner – partners throughout the supply chain that deliver finished products, raw materials, and services
v  Supply chain operation – schedule for production activities
v  Supply chain logistics – product delivery process/ transportations
·         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 various thereby reducing the threat of new entrance
-          Increase efficiencies while seeking a competitive advantage through cost leadership

·         Customer Relationship Management (CRM)
ü  Involve managing all aspects of a customers relationship with an organization to increase customer royalty and retention and an organization profitability
ü  Many organizations, such as Charles Schwab and Kaiser Permanente, have obtained great success through the implementation of CRM systems
ü  CRM is not just technology, but a strategy, process, and business goal that an organization must embrace on and enterprise wide level
ü  CRM can enable an organization to:
-          Identify types of customers
-          Design individual customer marketing campaigns
-          Treat each customer as an individual
-          Understand customer buying behaviours

·         Business Process Reengineering
ü  Business process – a standardized set of activities that accomplished a specific task, such as processing a customers order
ü  Business process reengineering – the analysis and redesign of workflow within and between enterprises
-          The purpose of BPR is to make all business processes best-in-class

·         Finding opportunity using BPR
ü  A company can improve the way it travels the road by moving from food 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 of change an organization can achieve along with the magnitudes of change and the potential business benefit

·         Enterprise Resource Planning (ERP)
ü  Integrates all departments and functions throughout an organization into a single IT systems so that employees can meet decisions by viewing enterprise wide information in all business operations
ü  Keyword in ERP is “enterprise”
ü  ERP systems collect data from across an organization and correlates the data generating and enterprise wide view


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