CHAPTER 3 - STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

Strategic Initiative

• 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.
• Four basic components of supply chain management include :

• supply chain strategic - strategic for managing all resources to meet customer demand

• supply chain partner - partners throughout the supply chain that deliver finished product, raw materials and services.   

• supply chain operation -  schedule for production activities  

• supply chain logistics -  product delivery process

• Effective and efficient SCM system 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 product or services 

•  create entry barriers thereby reducing the threat of new entrants 

•  increase efficiency while seeking a competitive advantage through cost leadership.

Customer relationship management (CRM) 

• 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 customers  

•  design individual customer marketing campaigns 

•  treat each customers as an individual 

•  understand customer buying behaviors.

Business process reengineering (BPR)

• 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 enterprise

• the purpose of BPR is to make all business processes best-in-class 

Seven principle of BPR 

1. organize around outcomes, not tasks.
2. identify all the organization's processes and prioritize them in order of redesign urgency
3. integrate information processing work into the real work that produces the information
4. treat geographically dispersed resources as though they were centralized
5. link parallel activities in the workflow instead of just integrating their results
6. put the decision point where the work is performed, and build control into the process
7. capture information once and at the sources.

Finding opportunity using BPR  

• A company can improve the way it travels the roads 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 .
• types of change an organization can achieve, along with the magnitudes of change and the potential business benefit.

Enterprise resource planning (ERP)

• integrates all department and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprise wide information on all business operations.
• keyword in ERP is "enterprise"
• ERP system collect data from across an organization and correlates the data generating an enterprise wide view.

Chapter 2 - Identifying Competitive Advantages

A competitive advantages is a feature of a product or service on which customers place greater value than they do on similar offering from competitors.
Competitive advantages provide the same product or service either at lower price or with additional value that can fetch premium prices.

Competitive intelligence is the process of gathering information about the competitive environment, including competitor's plans, activities, and products, to improve a company's ability to succeed.
It is mean that understanding and learning as much as possible as soon as possible about what is occurring outside the company to remain competitive.

Common tools to analyze competitive intelligence and develop competitive advantage :

• The Five Force Model (for evaluating industry attractiveness)
• The Three Generic Strategies (for choosing a business focus)
• Value Chain Analysis (for executing business strategies) 

THE FIVE FORCE MODEL

1. Buyer Power

• High - when buyers have many choices of whom to buy
• Low - when their choices are few
• To reduce buyer power (and create competitive advantage), an organization must make it more attractive to buy from the company not from the competitors.
• Best practices of IT based - 

• Loyalty program in travel industry (e.g. rewards on free airline tickets or hotel stays) 

2. Supplier Power

• High - when buyers have few choices of whom to buy from
• Low - when their choices are many

• best practices of IT to create competitive advantages.
• E.g B2B marketplace - private exchange allow a single buyer to posts it needs and then open the bidding to any supplier who would care to bid. Reverse auction is an auction format in which increasingly lower bids.

3. Threat of substitute products & services

• High - when there are many alternatives to a product or service.
• Low - when there are few alternatives from which to choose.
• Ideally, an organization would like to be on a market in which there are few substitutes of their product or services.

• best practices of IT 
• E.g. Electronic product - same function different brand

4. 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 a market.
•  Entry barriers is a product or services features that customers have come to expect from organizations and must be offered by entering organization to compete and survive.
• Best practices of IT

• E.g. new bank must offers online paying bills, acc monitoring to compete.

5. Rivalry among existence competitors

•  High- when competition is fierce in a market
• Low- when competition is more complacent
• Best practice of IT 

• Wal-mart and its suppliers using IT-enabled system for communication and track product at aisles by effective tagging system 
• Reduce cost by using effective supply chain 

The three generic strategies

1. cost leadership

• Becoming a low cost producer in the industry allows the company to lower prices to customers
• Competitors with higher costs cannot afford to compete with the low-costs leader on price

2. Differentiation

• Create competitive advantage by distinguishing their product on one or more features important to their customers
•  Unique features or benefits may justify price differences and/or stimulate demand.
• Ex: i-care by Proton

3. Focused strategy

• Target to a niche market
• concentrates on either cost leadership or differentiation

The value Chains -  Targeting Business Processes

 

* supply chain- a chain or series of processes that adds value to product and service for customer

* Add value to its products and services that support a profit margin for the firm

Chapter 1 : Business Driven Technology

  
Information technology (IT)

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

• IT is an important enabler of business success and innovation

Management information systems (MIS)

•  A general name for the business function and academic discipline covering the application of the people, technologies, and procedures to solve business problem.

• MIS is a business function, similar to Accounting, Finance, Operation, and Human Resources.

When beginning to learn about information technology it is important to understand :

• Data, information, and business intelligence

• IT resources

• IT cultures

Information 

• Data - Raw facts that describe the characteristic of an event.
• Information - data converted into a meaningful and useful context
• Business intelligence - applications and technologies that are used to support decision-making efforts 

IT RESOURCES 

•   People use
• Information technology to work with
• Information

 

IT CULTURES

 Organizational information cultures includes : 

• Information - Function Culture - 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 department are open to new insights about crisis and radical competitive advantages

first time buat blog

hey guys, this is my first time buat blog. and i tak tahu sangat actually mcm mna nk cantik kan blog i. have a nice day you all