Presentation on theme: "Strategic Initiatives for Implementing Competitive Advantages"— Presentation transcript:
1 Strategic Initiatives for Implementing Competitive Advantages CHAPTER 3Strategic Initiatives for Implementing Competitive Advantages
2 LEARNING OUTCOMES3.1 List and describe the four basic components of supply chain management 3.2 Explain customer relationship management systems and how they can help organizations understand their customers
3 LEARNING OUTCOMES3.3 Summarize the importance of enterprise resource planning systems 3.4 Identify how an organization can use business process reengineering to improve its business
5 SUPPLY CHAIN MANAGEMENT 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
6 SUPPLY CHAIN MANAGEMENT Four basic components of supply chain management include:Supply chain strategy – strategy for managing all resources to meet customer demandSupply chain partner – partners throughout the supply chain that deliver finished products, raw materials, and services.Supply chain operation – schedule for production activitiesSupply chain logistics – product delivery process
8 SUPPLY CHAIN MANAGEMENT Effective and efficient SCM systems can enable an organization to:Decrease the power of its buyersIncrease its own supplier powerIncrease switching costs to reduce the threat of substitute products or servicesCreate entry barriers thereby reducing the threat of new entrantsIncrease efficiencies while seeking a competitive advantage through cost leadership
9 SUPPLY CHAIN MANAGEMENT Effective and efficient SCM systems effect on Porter’s Five Forces
10 CUSTOMER RELATIONSHIP MANAGEMENT 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 profitabilityMany organizations, such as Charles Schwab and Kaiser Permanente, have obtained great success through the implementation of CRM systems
11 CUSTOMER RELATIONSHIP MANAGEMENT CRM is not just technology, but a strategy, process, and business goal that an organization must embrace on an enterprisewide levelCRM can enable an organization to:Identify types of customersDesign individual customer marketing campaignsTreat each customer as an individualUnderstand customer buying behaviors
13 BUSINESS PROCESS REENGINEERING Business process – a standardized set of activities that accomplish a specific task, such as processing a customer’s orderBusiness process reengineering (BPR) – the analysis and redesign of workflow within and between enterprisesThe purpose of BPR is to make all business processes best-in-class
14 BUSINESS PROCESS REENGINEERING Reengineering the Corporation – book written by Michael Hammer and James Champy that recommends seven principles for BPR
15 Finding Opportunity Using BPR A company can improve the way it travels the road by moving from foot to horse and then horse to carBPR looks at taking a different path, such as an airplane which ignore the road completely
16 Finding Opportunity Using BPR Progressive Insurance Mobile Claims Process
17 Finding Opportunity Using BPR Types of change an organization can achieve, along with the magnitudes of change and the potential business benefit
18 ENTERPRISE RESOURCE PLANNING 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 operationsKeyword in ERP is “enterprise”
19 ENTERPRISE RESOURCE PLANNING Sample data from a sales database
20 ENTERPRISE RESOURCE PLANNING Sample data from an accounting database
21 ENTERPRISE RESOURCE PLANNING ERP systems collect data from across an organization and correlates the data generating an enterprisewide view
22 OPENING CASE STUDY QUESTIONS Apple – Merging Technology, Business, and Entertainment Evaluate how Apple can gain business intelligence through the implementation of a customer relationship management systemCreate an argument against the following statement: “Apple should not invest any resources to build a supply chain management systemWhy would a company like Apple invest in BPR?
23 CHAPTER THREE CASE Got Milk CHAPTER THREE CASE Got Milk? It’s Good For You – Unless it is Contaminated!A contamination crisis shattered the dairy industry in China when babies mysteriously started developing kidney stones from contaminated baby formulaA chemical called melamine – an additive used to make plastic - was discovered in the milk supply of one of China's third-largest dairy producers
24 CHAPTER THREE CASE QUESTIONS Explain why the supply chain can dramatically impact a company’s base performance?List all of the products that have could possibly be affected by a problem in the United States milk supply chain?How can a CRM system help communicate issues in the supply chain?
25 CHAPTER THREE CASE QUESTIONS How could BPR help uncover issues in a company’s supply chain?What are the pros and cons for Starbucks outsourcing the growing of its coffee beans to Chinese farmers?