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.



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