Chapter 3


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Chapter 3

  1. 1. Teguh I Santoso, MBATeguh I Santoso, MBA Chapter 3Chapter 3 BPR & BUSINESS STRATEGYBPR & BUSINESS STRATEGY
  2. 2. QuitQuitXX What is StrategyWhat is Strategy A company’s strategy consists of the set of competitive moves and business approaches that management is (or will) employing to run the company Strategy is management’s “game plan” to  Attract and please customers  Stake out a market position  Conduct operations  Compete successfully  Achieve organizational objectives  Solve “the problem”
  3. 3. QuitQuitXX Competitive StrategyCompetitive Strategy  The inverse relationship between profit margins or returns and the intensity of competition:  intensity of competition goes up, margins and returns are driven down  This can require changes in competitive strategy :  to remain in an industry and,  to exit a business or an industry
  4. 4. QuitQuitXX Porter’s Competitive StrategyPorter’s Competitive Strategy  One widely accepted methodology in developing business competitive strategies is Michael Porter’s (1980) Five-Force Model  The force is referred to micro-environment and macro- environment  The forces is close to a company that affect its ability to serve its customers and make a profit  A change in any of the forces normally requires a company to re-assess the marketplace.
  5. 5. QuitQuitXX Porter’s (cont.)Porter’s (cont.) Porter (1980) suggested that “the goal of competitive strategy for a business unit in an industry is to find a position in the industry where the company can best defend itself against [the five] competitive forces or can influence them in its favor”
  6. 6. QuitQuitXX Five Forces Porter’s CompetitiveFive Forces Porter’s Competitive StrategyStrategy
  7. 7. QuitQuitXX Bargaining Power of BuyersBargaining Power of Buyers  The ability of customers to put the firm under pressure and it also the customer's affects the sensitivity to price changes.  Refers to the ability of customers to force :  down prices,  reduce product delivery cycle time,  demand higher quality, and  require better service
  8. 8. QuitQuitXX Bargaining Power of BuyersBargaining Power of Buyers  These factor tend to increase bargaining power of buyers  Buyer volume high  Price of total purchase  buyer information availability  ability to backward integrate  availability of existing substitute products  Low profit margin  Purchase is not very important to buyer
  9. 9. QuitQuitXX Bargaining Power of SuppliersBargaining Power of Suppliers  The ability of suppliers to  increase input material prices,  increase product delivery cycle time  reduce the quality of goods supplied
  10. 10. QuitQuitXX Bargaining Power of SuppliersBargaining Power of Suppliers  These factor tend to increase bargaining power of suppliers  Dominated by a few suppliers  Suppliers are more concentrated than the buyers  No substitutes  Supplier has more important customers  Supplier’s input is critical
  11. 11. QuitQuitXX Threat of New EntranceThreat of New Entrance  Profitable markets that yield high returns will draw new firms to enter the market  The result is :  Many new entrants which will effectively decrease profitability
  12. 12. QuitQuitXX Threat of New EntranceThreat of New Entrance  Factors tend to raise barriers to market entry by new entrants  Economies of scale  Capital requirements  Access to distribution  Government policy  The existence of barriers to entry (patents, rights, etc)
  13. 13. QuitQuitXX Threat of Substitute ProductsThreat of Substitute Products  Substitute products refers to other products that can be used to satisfy the same need  Factors can be affect to substitute products:  Buyer tendency to substitute  Price performance of substitute products  High elasticity demand
  14. 14. QuitQuitXX Rivalry Among Existing CompetitorsRivalry Among Existing Competitors  The major determinant of the competitiveness  The degree to which companies respond to competitive moves of other companies in the same industry  Rivals can compete aggressively and rivals compete in non-price dimensions, such as  Innovation  New products  Marketing or advertising  Technology
  15. 15. QuitQuitXX Rivalry Among Existing CompetitorsRivalry Among Existing Competitors  Factors that can be affects for high rivalry,  Number of competitors  Rate of industry growth  High exit barriers  Low differentiation
  16. 16. QuitQuitXX Why BPR?Why BPR?  Do or Die  Minimize threat from rival firms  Attain sustainable competitive advantage  Leverage on unprecedented opportunity to take giant leap forward
  17. 17. QuitQuitXX Type of BPR CompanyType of BPR Company 3 Jenis perusahaan yang menjalankan BPR 1. Perusahaan yang sedang mengalami masalah besar 2. Perusahaan yang belum mengalami kesulitan tetapi manajemen mereka yang mempunyai pandangan ke depan melihat akan ada masalah yang segera datang 3. Perusahaan yang berada dalam kondisi puncak
  18. 18. QuitQuitXX Beberapa hal yang dilakukan BPRBeberapa hal yang dilakukan BPR  Beberapa pekerjaan digabungkan menjadi satu  Para pekerja membuat keputusan  Tahap-tahap dalam proses dilakukan menurut kebiasaan  Proses-proses mempunyai banyak versi  Pekerjaan dilakukan pada tempat yang paling berarti  Pemeriksaan dan kontrol berkurang  Rujukan minimum  Manajer kasus membuat satu titik kontak  Sentralisasi dan desentralisasi merata
  19. 19. QuitQuitXX The Kinds of ChangesThe Kinds of Changes Changes Before After Work Unit Functional Departments Process Teams Jobs Simple Tasks Multi-dimensional Work People’s Roles Control Empowered Job Preparation Training Education Focus of Performance and Compensation Activity Result Advancement Criteria Performance Ability Values Protective Productive Managers Supervisors Coaches Organizational Structures Hierarchical Flat Executives Scorekeeper Leaders Text Book: Bab 4
  20. 20. QuitQuitXX Who will ReengineerWho will Reengineer Leader The Senior Executive who authorizes money and people, and who provides motivation Process Owner One Manager who already has a serious stake in the process under study, and who guides the effort for that process Reengineering Team A group of people who examine the existing process and then redesign it Steering Committee A group of Senior Executives who connect the effort to larger company strategies and who encourage people to join in supporting the changes Reengineering Czar A Senior Manager who develops reengineering competence in the company and develops synergy across various efforts
  21. 21. QuitQuitXX How it is supposed to workHow it is supposed to work  The Leader appoints a Process Owner  The Process Owner assembles and leads the Reengineering Team  The Reengineering Czar develops the skills and abilities of the Reengineering Team  The Steering Committee ensures that this Team develops strategic result
  22. 22. QuitQuitXX Thank You