This chapter discusses strategic initiatives that organizations can undertake to implement competitive advantages, including supply chain management, customer relationship management, business process reengineering, and enterprise resource planning. It provides details on each initiative and how they can help organizations reduce costs, increase efficiencies, improve customer relationships and understanding, and gain a competitive advantage in the marketplace. The chapter also discusses how these strategic initiatives affect Porter's Five Forces model of competition.

1. Business Driven
Technology
Unit 1
Achieving Business
Success
McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Unit One
O Chapter 1– Business Driven Technology
O Chapter 2 – Identifying Competitive Advantages
O Chapter 3 – Strategic Initiatives for Implementing
Competitive Advantages
O Chapter 4 – Measuring the Success of Strategic
Initiatives
O Chapter 5– Organizational Structures That Support
Strategic Initiatives
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3. Chapter 03
Strategic Initiatives for
Implementing Competitive
Advantages
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4. LEARNING OUTCOMES
1. Explain supply chain management and its
role in business
2. Explain customer relationship
management systems and how they can
help organizations understand their
customers
3. Summarize the importance of enterprise
resource planning systems
4. Identify how an organization can use
business process reengineering to
improve its business
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5. Strategic Initiatives
OOrganizations can undertake high-
profile strategic initiatives including:
O Supply chain management (SCM)
O Customer relationship management
(CRM)
O Business process reengineering (BPR)
O Enterprise resource planning (ERP)
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6. Supply Chain Management
O 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
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7. Supply Chain Management
O Four basic components of supply chain
management include:
1. Supply chain strategy – strategy for
managing all resources to meet customer
demand
2. Supply chain partner – partners throughout
the supply chain that deliver finished products,
raw materials, and services.
3. Supply chain operation – schedule for
production activities
4. Supply chain logistics – product delivery
process
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8. Supply Chain Management
O Wal-Mart and Procter & Gamble (P&G) SCM
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9. Supply Chain Management
O Effective and efficient SCM systems can enable an
organization to:
O Decrease the power of its buyers
O Increase its own supplier power
O Increase switching costs to reduce the threat of
substitute products or services
O Create entry barriers thereby reducing the threat of
new entrants
O Increase efficiencies while seeking a competitive
advantage through cost leadership
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10. Supply Chain Management
O Effective and efficient SCM systems effect on
Porter’s Five Forces
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11. Customer Relationship
Management
O 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
O Many organizations, such as Charles
Schwab and Kaiser Permanente, have
obtained great success through the
implementation of CRM systems
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12. Customer Relationship
Management
OCRM is not just technology, but a strategy,
process, and business goal that an
organization must embrace on an
enterprisewide level
OCRM can enable an organization to:
O Identify types of customers
O Design individual customer marketing campaigns
O Treat each customer as an individual
O Understand customer buying behaviors
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13. Customer Relationship
Management
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14. Business Process
Reengineering
OBusiness process – a standardized set of
activities that accomplish a specific task,
such as processing a customer’s order
OBusiness process reengineering (BPR) –
the analysis and redesign of workflow within
and between enterprises
O The purpose of BPR is to make all business
processes best-in-class 3-14

15. Business Process
Reengineering
OReengineering the
Corporation – book
written by Michael
Hammer and
James Champy that
recommends seven
principles for BPR
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16. Finding Opportunity Using
BPR
O A company can improve
the way it travels the
road by moving from foot
to horse and then horse
to car
O BPR looks at taking a
different path, such as an
airplane which ignore the
road completely
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17. Finding Opportunity Using
BPR
O Progressive Insurance Mobile Claims Process
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18. Finding Opportunity Using
BPR
O Types of
change an
organization
can achieve,
along with the
magnitudes
of change
and the
potential
business
benefit
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19. Enterprise Resource Planning
O 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
operations
O Keyword in ERP is
“enterprise”
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20. Enterprise Resource Planning
O Sample data from a sales database
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21. Enterprise Resource Planning
O Sample data from an accounting database
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22. Enterprise Resource Planning
O ERP systems collect data from across an
organization and correlates the data generating an
enterprisewide view
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23. LEARNING OUTCOME
REVIEW
ONow that you have finished the
chapter please review the learning
outcomes in your text
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