CHAPTER 3 : STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

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

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 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

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 systems so that employees can make decisions by viewing enterprisewide information on all business operations.
• Keyword in ERP is "enterprise".