MGT 300 - Chapter 3

CHAPTER 3 - Strategic Initiatives For Implementing Competitive Advantages


STRATEGIC INITIATIVE

~ 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 (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 :
  • Supply chain strategy - strategy for managing all resources to meet customer demand
  • Supply chain partner - partners throughout the supply chain that deliver finished products,  raw materials, and services
  • Supply chain operation - schedule for production activities
  • Supply chain logistics - product delivery process
~ Wal-Mart and Procter & Gamble (P&G) SCM




~ 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

~ 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 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 (BRP) - 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






Progressive Insurance Mobile Claims Process



ENTERPRISE RESOURCES PLANNING

  • Enterprise resources planning (ERP) - Integrates all 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 systems collect data from across an organization and correlates the data generating an enterprisewide view




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