CHAPTER 3 : STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

 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 reengineering (BPR)

–Enterprise resource planning (ERP)

1. 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 the resources required to meet customer demand for all products and services
• Supply chain partners - the partners chosen to deliver finished products, raw materials, and services including pricing, delivery, and payment processes along with partner relationship monitoring metrics
• Supply chain operation - the schedule for production activities including testing, packaging, and preparation for delivery. Measurements for this component include productivity and quality
• Supply chain logistics - the product delivery processes and elements including orders, warehouses, carriers, defective product returns, and invoicing
• Effective and efficient supply chain management systems can enable the organization to : 
• Decrease the buyer power
• Increase supplier power
• Increase switching costs
• Create entry barriers
• Increase efficiencies while seeking a competitive advantage through cost leadership

Effective and efficient supply chain managements effect on Porter's Five Forces

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  2. 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

*CRM is not just technology, but a strategy, process, and business goal that an organization must   embrace on an enterprisewide level

*CRM can enable the organization to

      - identify types of customers

      - design individual customer marketing campaigns

      - treat each customer as an individual

      - understand customer buying behaviours

   3. Business Process Reenginering (BPR)  - analysis and redesign of workflow within and between the enterprise

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

• Finding opportunity using BPR

• Types of change an organization can achieve, along with the magnitudes of change and the potential business benefit

   4. 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

• ERP systems collect data from across an organization and correlates the data generating an enterprisewide view