CHAPTER 3 : Strategic Initiatives for Implementing Competitive Advantages

Strategic Initiatives

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 profitability.

•   Four basic components of supply chain management include:

1. Supply chain strategy-strategy for managing all resources to meet customer demand.
2. Supply chain partner-partners throughout the supply chain that delivery finished products, raw materials and services.
3. Supply chain operation-schedule for production activities.
4. 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 advantange 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 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 customers.
          -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 redesign of workflow within and between enterprises

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

•  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 an airplane which ignore the road completely.
• Pitfalls of BPR-Fails to keep up with competitors.

4. Enterprise Resource Planning (ERP)
       
  -  Integrates all departments and functions throughout an organization into a single IT system so that  employees can made decisions by viewing enterprisewide information on all business operations. Keyword in ERP is ''enterprise''.