CHAPTER THREE - STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

Supply Chain Management (SCM)

• 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.
• There are four basic components of supply chain management : 

1.  Supply Chain Strategy – managing all the resources required to meet customer demand for all product and services.

2. Supply Chain Partner – the partners chosen to deliver finished goods, raw materials, services including pricing, delivery and payment process along with partner relationship monitoring metrics.

3.   Supply Chain Operation – the schedule for production activities.

4.   Supply Chain Logistic – the product deliver processes and elements.

Customer Relationship Management  (CRM)

·         Customer relationship management involves managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention and organization’s profitability.

·         Customer relationship management allows an organization to gain customer’s shopping and buying behaviors to develop and implement enterprise wide strategy.

·         Organizations such as Kaiser Permanente have obtained great success through CRM system.

·         Customer can contact an organization through various type of technology such as call centers, web access, email, faxes and direct sales that provide access to CRM information within different system from Accounting System, Order Fulfillment System, Inventory System and Customer Service System.

·         CRM allow us to :

1.      Communicate effectively with each customer

2.      Understand customer product and service.

·    CRM Strategy – CRM s not just technology but also strategy an organization must embrace on an enterprise level.

·        Implementing a CRM system :

1.      Help an organization identify customer

2.      Design specific marketing campaign

3.      To treat customer as an individual

4.      Understand customer buying behaviors

Business Process Reengineering (BPR)

·         A business process is a standardized set of activities that accomplish a specific task, such as processing a customer’s order.

·         Business process reengineering is the analysis and redesign of workflow within and between enterprises.

·         Creating value for the customer is leading factor for instituting BPR, and information technology often plays an important enabling role.

Enterprise Resources Planning (ERP)

·         ERP integrates all departments and functions throughout an organization into a single IT sytem so that employees can make decisions.

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

Chapter Two - Competitive Advantage

What is Competitive Advantage ?

• A product or service that an organization’s customers place a greater value on than similar offerings from a competitor.

There are three(3) common tools used industry to analyze and develop competitive advantage include:

  

1. Porter’s Five Forces Model
2. Porter's Three Generics Strategies 
3. Value chains

     The Five Force Model

• Porter’s Five Forces Model determines the relative attractiveness of an industry

       Buyer Power

• High when buyers have many choices of whom to buy from and low when their choices are 
•  Low when their choices are few reduce buyer power.

       Supplier Power

• High when buyers have few choices of whom to buy from and low when their choices are many 
• Low when their choices are many 
• Supply chain – consists of all parties involved in the procurement of a product or raw material

       Threat of Substitute  Product and Services 

•  High when there are many alternatives to a product or service
•  Low – when there are few alternatives from which to choose

     

       Threat of New Entrants 

•  High – when it is easy for new competitors to enter a market
•  Low – when there are significant entry barriers to entering a market

      

       Rivalry among Existence competitors 

•  High when competition is fierce in a market
•  Low – when competition is more complacent

The Three Generics Strategies 

         Cost Leadership

•  Becoming a low - cost producer in the industry allows the company to lower prices to customers
•  Competitors with higher costs cannot afford to compete with the low-cost leader on price

         Differentiation

•   Create competitive advantage by distinguishing their products on one or more features important to their customers
•  Unique features or benefits may justify price differences or stimulate demand

         Focus Strategy

•   Target to a niche market
•  Concentrates on either cost leadership or differentiation

Relationships Between Business Process and Value Chain 

      

         The Value Chains - Targeting Business Process 

•  Supply Chain - a chain or series of processes that adds value to product & service for customer
•  Add value to its products and services that support a profit margin for the firm

       

        Supply Chain Diagram

                     A chain or series of processes that adds value to product & service for customer

 

         

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Chapter One - Business Driven Technology

Learning outcomes of this chapter :

1. Compare management information systems (MIS) and information technology (IT).
2. Describe the relationships among people, information technology, and information.
3. Identify four different departments in a typical business and explain how technology helps them to work together.
4. Compare the four different types of organizational information cultures and decide which culture applies to your school.

Information Technology's Role in Business :

• Information technology is everywhere in business.
• It is easy to demonstrate information by reviewing the Business Magazine.

Information Technology's Impact on Business Operations.

• Organizations typically operate by functional areas.
• Functional areas are interdependent.

Information Technology Basics :

• Information technology (IT) – a field concerned with the use of technology in managing and processing information.
• Information technology is an important enabler of business success and innovation.
• Management information systems (MIS) – a general name for the business function and academic discipline covering the application of people, technologies, and procedures  to solve business problems.
• MIS is a business function, similar to Accounting, Finance, Operations, and Human Resources.

         Information : 

Data - raw facts that describe the characteristic of an event

Information - data converted into a meaningful and useful context

Business intelligence – applications and technologies that are used to support decision-                                             making efforts

IT Resources : 

 

IT Cultures :

•          Information-Functional Culture 
•          Informational-Sharing Culture
•          Informational-Inquiring Culture
•          Informational-Discovery Culture  

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