MGT300 - Chapter 3

STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

What is Strategic Initiatives?

Organizations can undertake high-profile strategic initiatives including:

Supply Chain Management (SCM)
Customer Relationship Management (CRM)
Business Process Reengineering (BPR)
Enterprise Resources Planning (ERP)

What is 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:

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

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

What is 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 behaviours

What is 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.

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 ignores the road completely.

Progressive Insurance Mobile Claims Process

Types of change an organization can achieve, along with the magnitudes of change and the potential business benefit.

What is Enterprise Resources 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.