Chapter 3: Strategic Initiatives for Implementing Competitive Advantages

Strategic Initiatives:
  • Supply Chain Management (SCM)
  • Customer Relationship Management (CRM)
  • Business Process Reengineering (BPR)
  • Enterprise Resource Planning (ERP)


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.

4 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 deliver 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 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

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

- 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:
- Identify types of customers
- Design individual customer marketing campaigns
- Treat each customer as an individual
- Understand customer buying behaviors

CRM Overview:
- Accounting system
- Order fulfillments system
- Inventory systems
- Customer service system

BUSINESS PROCESS REENGINEERING (BPR)
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

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 an airplane which ignore the road completely
  • Progressive insurance mobile claims process
  • Types of change an organization can achieve, along with the magnitudes of change and the potential business profit
Pitfalls of BPR:
  • Fails to keep up with competitors

ENTERPRISE RESOURCE PLANNING (ERP)
- 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 enterprisewide view

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