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 maagement include:

1. Supply chain strategy - Strategy for managing all resources to meet customer demand
2. Supply chain partner - partners throughout the supply chain that deliver finished products, raw materials and services
3. Supply chain operation - schedule for production activities 
4. Supple chain logistics - product delivery process

• Effectie and efficient SCM systems can enable an organization to:

         - Decrease the power of its buyer

         - 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 efficiencies while seeking a competitive advantage through cost leadership

2. CUSTOMER RELATIONSHIP MANAGEMENT

• 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 enterprisewide level
• CRM can enable an organization to:

         - Identify types of customer

         - Design individual customer marketing campaigns

         - Treat each customer as an individual

         - Understand customer buying behaviors

3. BUSINESS PROCESS REENGINEERING

• Business process - a standardized set of activities that accomplish a specific task, such as processing a customer's order.
• Business process reengineering (BPR) - the analysis and redisgn of worldflow within and between enterprise. The purpose of bPR is to make all business processes best-in-class.

• A company can improve the way it travels the roas by moving from foot  to horse and then horse to car.
• BPR looks at taking a different path, such as a airplane which ignore th road completely

4. ENTERPRISE RESOURCE PLANNING

  

• Intergrates all departments and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprisewide information on all business operations.

• ERP  systems collect data from across an organization and correlates the data generationg an enterprise view.