MGT 300, Chapter 3: Strategic Initiatives Implementing Competitive Advantages

Strategic Initiatives
·        Organizations can undertake high-profile strategic initiatives including:
-        Supply chain management (SCM)
-        Customer relationship management (CRM)
-        Business process reengineering (BPR)
-        Enterprise resource planning (ERP)
1.     Supply Chain Management
-        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 of supply chain management include:
i.                 Supply chain strategy – strategy for managing all resources to meet customer demand
ii.               Supply chain partner – partners throughout the supply chain that deliver finished products, raw materials, and service
iii.             Supply chain operation – schedule for production activities
iv.             Supply chain logistics – product delivery or process
·       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 product or services
-        Create entry barriers thereby reducing the threat of new entrants
-        Increase efficiencies while seeking a competitive advantage through cost leadership
2.     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 can enable an organization to:
i.                 Identify types of customers
ii.               Design individual customer marketing campaigns
iii.             Treat each customer as an individual
iv.             Understand customer buying behaviours
3.     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 process best-in-class
-        Finding Opportunity Using BPR
i.                 A company can improve the way it travels the road by moving from foot to horse and then horse to car
ii.               BPR looks at taking a different path, such as an airplane which ignore the road completely.
4.     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 enterprise wide information on all business operations.
-        Keyword in ERP is “enterprise”
-        ERP systems collect data from across an organization and correlates the data generating an enterprise wide view.