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 resources to meet customer demand.

*Supply chain partner-partners throughout the supply chain that deliver finished products, raw materials, and services.

*Supply chain operation-schedule for production activities

*Supply chain logistics-product delivery process

-Effective and efficient SCM systems can enable an organization to:

*Decrease the power of its buyers

*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(CRM).

# Involves managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and retention and an organization's profitability.

# Many organization, 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 :

        -Identity types of customers

       -Design individual customer marketing campaigns

       -Treat each customer as an individual

       -Understand customer buying behaviours

3 ) Business Process Re-engineering

$ Business Process- a standardize set of activities that accomplish a specific task, such as processing a customer's orders.

$ Business Process Re-engineering (BPR) - the analysis and redesign of workflow within and between enterprises

      

$ SEVEN PRINCIPLES OF BUSINESS PROCESS REENGINEERING :

     

      1) Organize around outcome, not tasks.

      2) Identify all the organization's processes and prioritize them in order of redesign urgency.

      3) Integrate information processing work into the real work that produces the information.

      4) Treat geographically dispersed resources as though they were centralized.

      5) Link parallel activities in the workflow instead of just integrating their result.

      6) Put the decision point where the work is performed, and build control into the process.

      7) Capture information once and at the source.

       Finding opportunity using BPR

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

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

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

 4 ) Enterprise Resource Planning

 @  Enterprise resource planning (ERP) - by viewing enterprise wide information on all business operations.integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions

@ Keyword in ERP is "enterprise"

 @ ERP systems collect data from across an organization and correlates the data generating an enterprise wide view.

@ 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 enterprise wide view.

      BPR and ERP METRIC

      The balanced scorecard enables organizations to measure and manage strategic initiatives.

      Vision and Strategy:

      1)Financial :      

       " To succeed financially, how should we appear to our shareholders?"

      2)Internal Business Processes:

 

        " To satisfy our shareholders and customer, what business processes must we excel at?"

  

       3)Learning and Growth:

     

         " To achieve our vision how will we sustain our ability to change and improve ?"

       4)Customer

         " To achieve our vision, how should we appear to our customers?"