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 Sell productsthrough a catalogSears’ loyalty programs involvedcustomers passed copies of thecatalog on to friends and relatives
3 Learning OutcomesList and describe the four basic components of supply chain managementExplain customer relationship management systems and how they can help organizations understand their customersSummarize the importance of enterprise resource planning systems
4 Three strategic initiatives: Overview Supply chain management (SCM)Customer relationship management (CRM)Enterprise resource planning (ERP)Trek’s IT systems increased sales by percent
6 The steps typically taken when a customer buys a bike from TrekTrek orders materials from itssuppliers, such as packagingmaterial, metal, & accessoriesTrek sends payments tosuppliersTrek receives materials fromTrek assembles the bikeTrek ships the bike to the storeCustomer picks up the Trekbike from the storeCustomer places an order for a Trek bike with a storeStore (such as local sporting goods store) receives the orderStore receives the payment from the customerStore orders the bike from TrekStore sends payment to Trek
7 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 profitabilityFour basic components of SCM:Supply chain strategy – strategy for managing all resources to meet customer demandSupply chain partners – 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
9 Effective and efficient SCM systems effect on Porter’s Five Forces 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
10 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 profitabilityCRM is not just technology, but a strategy, process, and business goal that an organization must embrace on an enterprise wide levelCRM can enable an organization to:Identify types of customersDesign individual customer marketing campaignsTreat each customer as an individualUnderstand customer buying behaviors
12 Enterprise resource planning (ERP) ERP integrates all departments and functions throughout an organization into a single IT system so that employees can make enterprise wide decisions by viewing enterprise wide information on all business operationsERP’s goal – every department or functional area work together sharing common information and not be a “silo”
13 Briefly explain the differences between SCM, CRM, and ERP SCM systems focus specifically on suppliersCRM systems focus specifically on customersERP systems focus on everything, all processes, departments, and operations for an enterprise
14 Organizations typically operate by functional areas or functional silos
15 Enterprise resource planning (ERP) Organizations use many integration tools to integrate IT infrastructures including:Intranets – an internalized portion of the Internet, protected from outside access, that allows an organization to provide access to information and application software to only its employeesEnterprise information portals (EIPs) – an Internet site owned and operated by an organization to support its operations.
16 ERP Vendors Large ERP vendors include SAPPeopleSoftOracleMost ERP solutions include SCM and CRM components
17 How Levi’s Got Its Jeans into Wal-Mart Which of Porter’s Five Forces did Levi’s address through the implementation of its updated supply chain management system?Evaluate how Levi’s can gain business intelligence through the implementation of a customer relationship management systemCreate an argument against the following statement: “Levi’s should not invest any resources to upgrade its current supply chain management system”
18 CASE QUESTIONSExplain how implementing a CRM system enabled Saab to gain a competitive advantageEstimate the potential impact to Saab’s business if it had not implemented a CRM systemWhat additional benefits could Saab receive from implementing a supply chain management system?