MGT 300 Chapter 3

Chapter 3 Strategic Initiatives for Implementing Competitive Advantages

Strategic Initiatives

• Organization 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 (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 :

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

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

Effective and efficient SCM system 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

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

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

CRM Overview

Business Process Reengineering (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
• The purpose of BPR is to make all business processes best-in-class
• Reengineering the Corporation - book written by Michael Hammer and James Champy that recommends seven principles for BPR

Example of BPR

Enterprise Resource Planning (ERP)

• ERP intergrates all departments and departments and functions throughout an organization into a single IT system.
• Keyword in ERP is "enterprise"

Sample data from a sales database

Sample data from an accounting database

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

THE END OF CHAPTER 3 ❤❤