Chapter 3: Strategic Initiatives for Implementing Competitive Advantage

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Strategic Initiatives
Organizations can undertake high profile strategic initiatives including:

  • Supply Chain Management (SCM)
  • Customer Relationship Management (CRM) 
  • Business Process Re-engineering (BPR)
  • Enterprise Resource Planning (ERP)

A) Supply Chain Management (SCM): 
  • involves management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability


Four basic components:
  1. Supply chain strategy - strategy in managing all resources to meet customer demand
  2. Supply chain partner - partners throughout 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 systems can enable on organization to:

  • decrease buyer power
  • increase supplier owner
  • increase switching costs to reduce threat of substitute products/services
  • create entry barriers thereby reducing threat of new entrants
  • increase efficiencies while seeking a competitive advantage through cost leadership


B) 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.
  • Charles Schwab and Kaiser Permanente - obtained great success through implementation of CRM systems. 
  • not just technology, but a strategy, process, and business goal that an organization must embrace on an enterprisewide level

CRM enable an organization to:
  • identify types of customers
  • design individual customer marketing campaigns
  • treat each customer as an individual
  • understand customer buying behaviours
CRM Overview



C) 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
  • Purpose? - to make all business processes best-in-class

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 ignore 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. 


D) Enterprise Resource Planning (ERP):
  • intergrates 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 
  • Keywords of  ERP: "enterprise"




ERP Systems collect data from across an organization and correlates the data generating and enterprise-wide view.



The End of Chapter 3: Strategic Initiatives for Implementing Competitive Advantages by syahirahzfri. 
Thank you for reading :)


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