Chapter 3 : STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

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)

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.

4 basic component 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 logistic - product delivery process.

CUSTOMER RELATIONSHIP MANAGEMENT -  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 customer
             - design individual customer marketing campaigns
             - treat each customer as an individual
             - understand customer buying behaviors


BUSINESS PROCESS REENGINEERING - the analysis and redesign of workflow within and between enterprises 

Business process - a standardized set if activities that accomplish a specific task, such as processing a customer's order.

 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.

ERP systems collect data from across an organization and correlates the data generating an enterprisewide view.

Chapter 2 : Identifying Competitive Advantage

                WHAT IS COMPETITIVE ADVANTAGE ?

·         A product or service that an organization’s customers place a greater value on than similar offerings from a competitor.

·         Competitive advantage is temporary because competitors keep duplicate the strategy. Then, the company should start the new competitive advantages.

·         Michael Porter’s find forces model is useful tool to aid organization in challenging decision whether to join a new industry or industry segment.

The Five Forces Model:

·         Buyer Power

ü  High – when buyers have many choices of whom to buy

ü  Low – when their choices are few

ü  To reduce buyer power, an organization must make it more attractive to buy from the company not from the competitors.

ü  Best practices of IT-based

Supplier Power

         High – when buyers have few choices of whom to buy from.

        Low – when their choices are many.

               Best practice of IT to create competitive advantage.

Threat of Substitute products and services

       High – when there are many alternative to a product or service.

       Low – when there are few alternative from which to choose.

       Ideally, an organization would like to be on a market in which there are few substitute of their product or services.

Threat of new entrants

       High – when it is easy for new competitors to enter a market.

      Low – when there are significant entry barriers to entering the market.

      Entering barriers is a product or service feature that customers have come to expect from organization and must be offered by entering the organization to compete and survive.

      Best practices of IT

Rivalry among existence competitors

     High – when competition is fear in a market.

     Low – when competition is more complacent.

     Best practices of IT.

            Reduce cost buy using effective supply chain.

THE THREE GENERICS STRATEGIES

1.       Cost leadership

-becoming a low cost producer in the industry allows the company to lower prices to customers.

-competitors with higher cost cannot afford to compete with the low cost leader on price

2.       Differentiation

-create competitive advantage by distinguishing their product on one or more features important to their customers.

-unique features or benefit may justify price differences or stimulate demand.

-Ex : i-care by Proton

3.       Focused strategy

-target to niche market.

-concentrates on either cost leadership or differentation

Chapter 1 : Bsness Driven Technology

INFORMATION TECHNOLOGY (IT)

  • a field concerned with the use of technology in managing and processing information.

Management Information system (MIS)
• A general name for the business function and academic discipline covering the application of people, technologies, and procedures to solve business problems.

INFORMATION

v  Data  - raw facts that describe the characteristic of an event

v  Information – data converted into a meaningful and useful context

v  Business intelligence – applications and technologies that are used to support decision-making efforts

IT CULTURES

v  Organizational information cultures include :

·         Information- Functional Cultures – Employees use information as a means of exercising influence or power over others. For example, a manager in sales refuses to share information with marketing. This causes marketing to need the sales manager’s input each time a new sales strategy is developed.

·         Information – Sharing Culture – Employees across departments trust each other to use information (especially about problems and failures) to improve performance.

·         Information-Inquiring Culture- Employees across departments search for information to better understand the future and align themselves with current trends and new directions.

·         Information- Discovery Culture- Employees across departments are open to new insights about crisis and radical changes and seek ways to create competitive advantages.