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

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