This document 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 of these concepts, including definitions, examples of companies that have implemented them successfully, and how they can positively impact an organization. Key topics covered include the four components of supply chain management, how CRM and ERP systems integrate organizational data, and how BPR analyzes and redesigns business processes to make them more efficient.

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Strategic Initiatives for
Implementing Competitive
Advantages

2. 3-2
LEARNING OUTCOMES
3.1 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. 3-3
LEARNING OUTCOMES
3.3 Summarize the importance of enterprise
resource planning systems
3.4 Identify how an organization can use
business process reengineering to
improve its business

4. 3-4
STRATEGIC INITIATIVES
• Organizations can undertake high-profile
strategic initiatives including:
– Supply chain management (SCM)
– Customer relationship management (CRM)
– Business process reengineering (BPR)
– Enterprise resource planning (ERP)

5. 3-5
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. 3-6
SUPPLY CHAIN MANAGEMENT
• 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

7. 3-7
SUPPLY CHAIN MANAGEMENT
• Wal-Mart and Procter & Gamble (P&G) SCM

8. 3-8
SUPPLY CHAIN MANAGEMENT
• 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

9. 3-9
SUPPLY CHAIN MANAGEMENT
• Effective and efficient SCM systems effect
on Porter’s Five Forces

10. 3-10
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 profitability
• Many organizations, such as Charles
Schwab and Kaiser Permanente, have
obtained great success through the
implementation of CRM systems

11. 3-11
CUSTOMER RELATIONSHIP
MANAGEMENT
• CRM is not just technology, but a strategy,
process, and business goal that an organization
must embrace on an enterprisewide 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

12. 3-12
CUSTOMER RELATIONSHIP
MANAGEMENT
• CRM overview

13. 3-13
BUSINESS PROCESS
REENGINEERING
• Business process – a standardized set of
activities that accomplish a specific task, such
as processing a customer’s order
• Business process reengineering (BPR) – the
analysis and redesign of workflow within and
between enterprises
– The purpose of BPR is to make all business
processes best-in-class

14. 3-14
BUSINESS PROCESS
REENGINEERING
• Reengineering the Corporation – book written
by Michael Hammer and James Champy that
recommends seven principles for BPR

15. 3-15
Finding Opportunity Using BPR
• A company can improve the
way it travels the road by
moving from foot to horse and
then horse to car
• BPR looks at taking a
different path, such as an
airplane which ignore the
road completely

16. 3-16
Finding Opportunity Using BPR
• Progressive Insurance Mobile Claims Process

17. 3-17
Finding Opportunity Using BPR
• Types of change
an organization
can achieve,
along with the
magnitudes of
change and the
potential
business benefit

18. 3-18
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 operations
• Keyword in ERP is “enterprise”

19. 3-19
ENTERPRISE RESOURCE
PLANNING
• Sample data from a sales database

20. 3-20
ENTERPRISE RESOURCE
PLANNING
• Sample data from an accounting database

21. 3-21
ENTERPRISE RESOURCE
PLANNING
• ERP systems collect data from across an
organization and correlates the data
generating an enterprisewide view

22. 3-22
OPENING CASE STUDY QUESTIONS
Apple – Merging Technology, Business, and
Entertainment
1. Evaluate how Apple can gain business intelligence
through the implementation of a customer
relationship management system
2. Create an argument against the following
statement: “Apple should not invest any resources
to build a supply chain management system
3. Why would a company like Apple invest in BPR?

23. 3-23
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 formula
• A 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. 3-24
CHAPTER THREE CASE
QUESTIONS
1. Explain why the supply chain can dramatically
impact a company’s base performance?
2. List all of the products that have could possibly be
affected by a problem in the United States milk
supply chain?
3. How can a CRM system help communicate issues
in the supply chain?

25. 3-25
CHAPTER THREE CASE
QUESTIONS
4. How could BPR help uncover issues in a
company’s supply chain?
5. What are the pros and cons for Starbucks
outsourcing the growing of its coffee beans
to Chinese farmers?