CHAPTER 3 : STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

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 (SCM) - involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.

• -          It 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;

o        Supply chain strategy – strategy for managing all resources to meet customers demand

o       Supply chain partner – partners throughout the supply chain that deliver finished products, raw materials and services

o      Supply chain operation – schedule for production activities

o     Supply chain logistics – product delivery process

• -          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 efficiency while seeking a competitive advantages through cost leadership

THE EFFECTIVE AND EFFICIENT SCM SYSTEMS EFFECT ON PORTER'S FIVE FORCES

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.

• -          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;

o      Identify types of customers

o      Design individual customer marketing campaign

o      Treat each customer as a individual

o      Understand customer buying behaviors

 3. 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.

Business Process - a standardized set of activities that accomplish a specific task, such as processing a customer's order.

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 enterprisewide information on all business operations.

- keyword in ERP in 'enterprise'.

ERP systems collect data from across an organization and correlates the data generating an enterprise view.