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)


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
• 4 basic components of supply chain management :

                 * 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

• Wal-Mart and Procter & Gamble (P&G) SCM

• 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 or new entrants
               # Increase efficiencies while seeking a competitive advantage through cost leadership

• Effective and efficient SCM systems effect on Porter's Five Forces

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

• Reengineering the Corporation - book written by Michael Hammer and James Champy that recommends seven principles for BPR

FINDING OPPORTUNITY USING BPR

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

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'