Chapter3
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Title Page
Chapter Three: Strategic Initiatives for Implementing Competitive Advantages
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Learning Outcomes
Identify how an organization can use business process reengineering to improve its business.
Explain supply chain management and its role in business.
Explain customer relationship management systems and how they can help organizations understand their customers.
Summarize the importance of enterprise resource planning systems.
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Strategic Initiatives
Organizations can undertake high-profile strategic initiatives including:
Business Process Reengineering (BPR)
Supply Chain Management (SCM)
Customer Relationship Management (CRM)
Enterprise Resource Planning (ERP)
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Business Process Reengineering
Definition: A standardized set of activities that accomplish a specific task, such as processing a customer’s order.
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Managing Business Processes
Businesses gain a competitive edge by minimizing costs and streamlining processes.
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Managing Business Responsibilities
Key Departments:
Accounting and Finance: Creating financial statements, managing accounts payable, and receivable.
Marketing and Sales: Communicating campaigns and attracting customers.
Operations Management: Inventory management and production scheduling.
Human Resources: Hiring and tracking employee leave.
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Managing Business Processes
Customer Facing Processes:
Directly result in a product or service received by the external customer.
Business Facing Processes:
Invisible to customers but essential for business management.
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Managing Business Responsibilities
Customer Facing Processes Include:
Order processing, customer billing.
Business-Facing Processes Include:
Strategic planning, training.
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Managing Business Processes
Order-to-Delivery Process Overview.
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Managing Business Responsibilities
Steps in an Order-to-Delivery Process:
Campaign creation and inventory check - Marketing.
Order placement and credit check - Sales.
Manufacturing goods - Operations Management.
Delivery and billing - Accounting and Finance.
Sales support - Customer Service.
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Improving Business Processes
Business Process Reengineering (BPR):
Analysis and redesign of workflow within and between enterprises.
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Supply Chain Management (SCM)
Definition: The management of information flows in a supply chain to maximize effectiveness and profitability.
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Effective Supply Chain Management
Organizations must adopt technologies to manage supply chains effectively.
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Supply Chain Management Process Example
Customer orders Trek bike.
Store receives and processes order.
Store collects payment and orders bike from Trek.
Trek orders materials from suppliers.
Trek assembles and ships bike to store.
Customer picks up bike.
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Supply Chain Activities
Overview of five basic supply chain activities.
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SCM Example: Walmart and Procter & Gamble
Discussed as effective supply chain management instances.
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Effective Supply Chain Management Outcomes
Enables organizations to:
Decrease buyer power.
Increase supplier power.
Eliminate threats of substitutes.
Create entry barriers.
Achieve competitive advantage through cost leadership.
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SCM Effect on Porter’s Five Forces
Discussed impact of effective SCM systems.
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Customer Relationship Management (CRM)
Definition: Managing customer relationships to increase loyalty and profitability.
Organizations like Charles Schwab and Kaiser Permanente have achieved success with CRM systems.
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CRM Strategy
CRM is a strategy, not just technology:
Identify customer types.
Design personalized marketing campaigns.
Treat customers individually.
Understand buying behaviors.
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Evolution of CRM
CRM Technologies:
Reporting: Identifying customer data.
Analysis: Segmenting customers.
Predicting: Projecting future behaviors.
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Evolution of CRM
Further description of CRM concepts and applications.
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Detailed Process of CRM
Reporting: What happened?
Analyzing: Why did it happen?
Predicting: What will happen?
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Enterprise Resource Planning (ERP)
Definition: Integrates all organizational departments and functions into a single IT system.
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Data Management in ERP
ERP systems collect and correlate data to provide an enterprise-wide view.
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Learning Outcome Review
Review learning outcomes from the chapter.