Chapter 3 – Strategic Initiatives for implementing Competitive Advantages

Strategies initiatives

- Organizations can undertake high-profile strategic initiatives including;

• Supply chain management (SCM)
• Customers relationship management (CRM)
• Business process re engineering (BPR)
•  Enterprise resources planning (ERP)

Supply Chain Management (SCM)

• -          It 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;

o        Supply chain strategy – strategy for managing all resources to meet customers demand

o       Supply chain partner – partners throughout the supply chain that deliver finished products, raw materials and services

o      Supply chain operation – schedule for production activities

o     Supply chain logistics – product delivery process

• -          Effective and efficient SCM systems can enable an organization to;

o      Decrease the power of its buyers

o      Increase its own supplier power

o      Increase switching costs to reduce the threat of substitute products or services

o     Create entry barriers thereby reducing the threat of new entrants

o    Increase efficiency while seeking a competitive advantages through cost leadership

Customers Relationship Management (CRM)

• -          Its 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 enterprise wide level
• -          CRM can enable an organization to;

o      Identify types of customers

o      Design individual customer marketing campaign

o      Treat each customer as a individual

o      Understand customer buying behaviors

  

Business Process Re engineering (BPR)

• -          It is a standardized set of activities that accomplish a specific task, such as processing a customer’s order
• -          The analysis and redesign of workflow within and between enterprises

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

• -          Re engineering the Corporation – book written by Michael Hammer and James Champy that recommends seven principles for BPR
• -          Finding Opportunity Using BPR

o     A company can improve the way it travels the road by moving from foot to horse and then horse to car

o     BPR looks at taking a different path, such as an airplane which ignore the road completely

o     Types

Enterprises Resource Planning (ERP)

• -          It  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
• -          Keyword in ERP is “enterprise”.
• -          ERP systems collect data from across an organization and correlates the data generating an enterprise wide view