STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

Chapter 3: Strategic Initiatives for Implementing Competitive Advantages



Supply Chain Management (SCM) – The management of information flows between and among activities in a supply chain to maximize total supply chain effectiveness and profitability.

There are 4 basic components of SCM:
  • Supply Chain Strategy - Strategy for managing all resources to meet customers demands
  • Supply Chain Partner - Partners throughout the supply chain that deliver finished products, raw materials and services
  • Supply Chain Operation - Schecule for production activites
  • Supply Chain Logistics - Product delivery process



O Effective and efficient SCM systems can enable an organization to:
O Decrease the power of its buyers
O Increase its own supplier power
O Increase switching costs to reduce the threat of substitute products or services
O Create entry barriers thereby reducing the threat of new entrants
O 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 Reingineering (BPR) - 
  • 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
       Finding Opportunity Using BPR:- 
  •         A company can improve the way it travels the road by moving from foot to horse and then horse to car
  •        BPR looks at taking a different path, such as an airplane which ignore the road completely
  •        Types of change an organization can achive, along with the magnitudes of change and the potential business benefit
For example:
Progressive Insurance Mobile Claims Process;


Pitfalls of BPR; Fails to keep up with competitors

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"
  •         ERP systems collect data from across an organization and correlates the data  generating an enterprisewide view
Sample data from a sales database:


Sample data from an accounting database:
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