CHAPTER 3 - STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGE

In this chapter,we will learn about the strategic that are being used by the company , how to implementing it ? and going through the competitive advantage . 

Strategic Initiative

Organizations can undertake high-profile strategic initiatives including:

–    Supply chain management (SCM)

–    Customer relationship management (CRM)

–    Business process reengineering (BPR)

–    Enterprise resource planning (ERP)

Supply Chain Management

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:

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 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

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   Customer Relationship Management

• 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

  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

     Enterprise Resource Planning

• 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 enterprisewide information on all business operations

• Keyword in ERP is “enterprise”