Chapter 3

CHAPTER 3 - Strategic Initiatives for Implementing Competitive Advantages

Strategic Initiatives

- Organizations can undertake high-profile strategic initiatives including:

1. Supply chain management (SCM)
2. Customer relationship management (CRM)
3. Business process re-engineering (BPR)
4. 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

- 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 it 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 (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 - a standardized set of activities that accomplish a specific task, such as processing a customer's order.

Business process re-engineering (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 (ERP) - Integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions y viewing enterprisewide information on all business operations

*keyword in ERP is 'enterprise"

-ERP system collect data from across an organization and correlates the data generating an enterprisewide view.





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