1. Strategic Initiatives for Implementing Competitive Advantages
Chapter 3
Strategic Initiatives for Implementing Competitive Advantages

2. Sell products
through a catalog
Sears’ loyalty programs involved
customers passed copies of the
catalog on to friends and relatives

3. Learning Outcomes
List and describe the four basic components of supply chain management
Explain customer relationship management systems and how they can help organizations understand their customers
Summarize 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 Trek
Trek orders materials from its
suppliers, such as packaging
material, metal, & accessories
Trek sends payments to
suppliers
Trek receives materials from
Trek assembles the bike
Trek ships the bike to the store
Customer picks up the Trek
bike from the store
Customer places an order for a Trek bike with a store
Store (such as local sporting goods store) receives the order
Store receives the payment from the customer
Store orders the bike from Trek
Store 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 profitability
Four basic components of SCM:
Supply chain strategy – strategy for managing all resources to meet customer demand
Supply chain partners – partners throughout the supply chain that deliver finished products, raw materials, and services.
Supply chain operation – schedule for production activities
Supply chain logistics – product delivery process

8. Wal-Mart and Procter & Gamble SCM

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 buyers
Increase its own supplier power
Increase switching costs to reduce the threat of substitute products or services
Create entry barriers thereby reducing the threat of new entrants
Increase 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 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:
Identify types of customers
Design individual customer marketing campaigns
Treat each customer as an individual
Understand customer buying behaviors

11. CRM overview

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 operations
ERP’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 suppliers
CRM systems focus specifically on customers
ERP 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 employees
Enterprise information portals (EIPs) – an Internet site owned and operated by an organization to support its operations.

16. ERP Vendors Large ERP vendors include
SAP
PeopleSoft
Oracle
Most 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 system
Create an argument against the following statement: “Levi’s should not invest any resources to upgrade its current supply chain management system”

18. CASE QUESTIONS
Explain how implementing a CRM system enabled Saab to gain a competitive advantage
Estimate the potential impact to Saab’s business if it had not implemented a CRM system
What additional benefits could Saab receive from implementing a supply chain management system?