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