CHAPTER 3 - STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

Strategic initiatives 

• Supply Chain Management (SCM)
• Customer Relationship Management (CRM)
• Business Process Re-engineering (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 :

1. Supply Chain Strategy - to meet customer demand.
2. Supply Chain Partner - deliver finished product, raw material and service.
3. Supply Chain Operation - for production activities.
4. Supply Chain Logistics - delivery process.

• Effective and efficient SCM system ca 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 service.
• Increase inefficiencies 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.

• 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.

- 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

• Enterprise Resource Planning

- 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.