MGT300
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
1. 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.
2. Four basic components of supply chain
management include:
·
Supply
chain strategy – strategy for managing all resources to meet customer demand.
·
Supply
chain partner – partners throughout the supply chain that deliver finished product,
raw materials, and services.
·
Supply
chain operation – schedule for production activities.
·
Supply
chain logistics – product delivery process.
3. 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.
4. Effective and efficient SCM systems
effect on Porter’s Five Forces
DECREASE
·
Buyer
power
·
Threat
of substitute products or services
·
Threat
of new entrants
INCREASE
- · Supplier power
CUSTOMER RELATIONSHIP MANAGEMENT
1. CRM – involves managing all aspects
of a customer’s relationship with an organization to increase customer loyalty
and retention and an organization’s profitability.
2. CRM is not just technology, but a
strategy, process, and business goal that an organization must embrace on an
enterprisewide level.
3. CRM can enable an organization to:
-
Identify
types of customer
-
Design
individual customer marketing campaigns
-
Treat
each customer as an individual
-
Understand
customer buying behaviors
BUSINESS PROCESS
REENGINEERING
- Ø Business process – a standardized set of activities that accomplish a specific task, such as processing a customer’s order
- Ø Business process reengineering ( BPR ) – the analysis and redesign of workflow within and between enterprise
- - The purpose of BPR is to make all business processes bent-in-class
- Ø Reengineering the Corporation – book written by Michael hammer and James Champy that recommends seven principles for BPR
Seven Principles of Business Process reengineering
- Ø Organize around outcomes, not tasks.
- Ø Identify all the organization’s process and prioritize them in order of redesign urgency.
- Ø Integrate information processing work into the real work that produces the information.
- Ø Treat geographically dispersed resources as though they were centralized.
- Ø Link parallel activities in the workflow instead of just integrating their result.
- Ø Put the decision point where the work is performed, and build control into the process.
- Ø Capture information once and at the source.
Finding opportunity using BPR
- Ø A company can improve the way it travels the road by moving from foot to horse and then horse to car.
- Ø BPR look at taking a different path, such as an airplane which ignore the road completely.
- Ø Types of change an organization can achieve, along with the agnitudes of change and the potential business benefit.
ENTERPRISE RESOURCE
PLANNING
Enterprise resources planning ( ERP ) – integrates all
department and functions throughout an organization into a single IT system so
that employee can make decision by viewing enterprisewide information an all
business operation.
- Ø ERP systems collect data from across an organization and correlates the data generating an enterprisewide view.
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