CHAPTER 3 : STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGE

CHAPTER 3 : STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGE

Assalamualaikum..!olla everyone..! This time I would like to post new entry about new chapter in IT which is STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES.

In this chapter it introduces high-profile strategic initiatives that an organization can undertake to help it gain competitive advantages and business efficiencies. It including :

Ø    Supply chain management (SCM)

Ø    Customer relationship management (CRM)

Ø    Business process reengineering (BPR)

Ø    Enterprise resource planning (ERP)

SUPPLY CHAIN MANAGEMENT (SCM)

SCM involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.

There are 4 basic of SCM include:

# Supply chain strategy- strategy for managing all resources to meet customer demand.

# Supply chain partner- partners throughout the supply chain that deliver finished  

                                       products, raw materials, and services.

# Supply chain operation- schedule for production activities.

# Supply chain logistics- product delivery process.

Effective and efficient supply chain management systems:

·                     Decrease the power of its buyer.

·                     Increase its own supplier power.

·                     Increase switching costs to reduce the threat of substitute products or services.

·                     Create entry barriers thereby reducing the treat new entrants.

·                     Increase efficiencies while seeking a competitive advantage through cost

            leadership.

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

CRM involves managing all aspects of customer‘s relationship with an organization to increase customer loyalty and retention and an organization’s profitability.

CRM allows an organization to gain customer’s shopping and buying behaviors to develop and implement enterprise wide strategy.

Customer can contact an organization through various type of technology such as:

§                - Call centers

§                 -Web access

§                 -Email

§                -Faxes

§                -Direct sales

That provide access to CRM information within different system from

• Accounting system
• Order fulfillment system
• Inventory system
• Customer service system        

Then, CRM allow us to:

-          Communicate effectively with each customer.

-          Understand customer product and service.   

CRM is not just technology but also a strategy an organization must embrace on an enterprise level.

Implementing a CRM system:

# Help an organization identify customer                   # To treat customer as an individual

# Design specific marketing campaign                       # Understand customer buying behaviors

BUSINESS PROCESS REENGINEERING (BPR)

-A business process is a standardized set of activities that accomplish a specific task, such as processing a customer’s order

Then, what is business process reengineering?? Business process reengineering (BPR) is the analysis and redesign of workflow within and between enterprise.

Finding opportunity using BPR

v  A company can improve the way it travels the road by moving from foot to horse and then horse to car.

v  BPR looks at taking a different path, such as an airplane which ignore the road completely.

Other examples:

Progressive Insurance Mobile Process

7 PRINCIPLES OF BUSINESS PROCESS REENGINEERING

ENTERPRISE RESOURCE PLANNING (ERP)

ü  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 enterprise wide information on all business operations

ü  Keyword in ERP is “enterprise”

                                                                           

	ü  ERP systems collect data from across an organization and correlates the data generating an enterprise wide view THE END.. THANK YOU :)

 

CHAPTER 2: IDENTIFYING COMPETITIVE ADVANTAGE

CHAPTER 2: IDENTIFYING COMPETITIVE ADVANTAGE
                        

Assalamualaikum everyone..!!! We meet again..! This week entry is about second chapter of IT which is IDENTIFIYING COMPETITIVE ADVANTAGES. To survive and thrive an organization must create a competitive advantage. 

                                        WHAT IS COMPETITIVE ADVANTAGE??

Competitive advantage is a feature of a product or service on which customers place a greater value than they do on similar offerings from competitors.

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

Organization watch their competition through environmental scanning. Environmental scanning..??

Ok, environmental scanning is the acquisition and analysis of events and trends in the environment external to an organization.

There are 3 common tools that used in industry to analyze and develop competitive advantages. The 3 common tools are :

·         Porter’s Five Forces Model

·         Porter’s three generic strategies

·         Value chains

PORTER’S FIVE FORCES MODEL

                             

·                    Buyer power-  high when buyers have many choices of whom to buy from and low when their choices are few. One way to reduce buyer power is through loyalty programs.  Loyalty programs means rewards customers based on the amount of business they do with particular organization.

·                    Supplier power- high when buyers have few choices of whom to buy from. But supplier power will be low when their choices are many. Organizations that are buying goods and services in the supply chain can create a competitive advantage by locating alternative supply sources (decreasing supply power) through B2B marketplaces.

-Business-to-business (B2B) marketplace = an internet-based service that brings together many buyers and sellers.

2 types of (B2B) marketplaces: private exchange

                                                : reverse exchange

 Supplier power is the converse of buyer power :

                  

·                    Threat of Substitute products or services- high when there are many alternatives to a product or services and low when there are few alternatives from which to choose. Ideally, an organization would like to be an a market in which there are few substitutes of their product or services. For example : electronic product-same function different brands.

·                    Threat of new entrance- high when it is easy for new competitors to enters a market low when there are significant entry barriers to entering a market. Entry barriers is a product or services feature that customers have come to expect from organization to compete and survive. For example: new bank must offers online paying bills, acc monitoring to compete.

·                    Rivalry among existence competitors- high when competitors is fierce in a market and low when competition is more complacent. For example:  Wal-mart and its suppliers using IT-enabled system for communication and track product at aisles by effective tagging system.

PORTER’S 3 GENERICS STRATEGIES

Organizations typically follow one of Porter’s 3 generic strategies when entering a new market.

v 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-cost leader on price.

 v Differentiation

-Create competitive advantage by distinguish their products 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

 v  Focused strategy

-Target to a niche market

-Concentrates on either cost leadership or differentiation.

                             

RELATIONSHIP BETWEEN BUSINESS PROCESS AND VALUE CHAIN

Once an organization chooses its strategy, it can use tools such as the value chain to determine the success or failure of its chosen strategy.

-Value chain= views an organization as a series of processes, each of which adds value to the product or services for each customer.

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

             

This picture below shows the value chains with Porter’s Five Forces

               

That’s all from me.. thank you for reading ya.. J

                                
                                                                           THE END..

                                                                                                 

CHAPTER 1: BUSINESS DRIVEN TECHNOLOGY

                                            

Assalamualaikum..hello everyone..! This is my first post for my Information Technology In Business (MGT 300). This blog is all about information technology. The first chapter I learnt for this subject is business driven technology.Before we go more deep for this chapter we need what are the roles of information technology (IT) in business. Information technology is everywhere in business. The role of IT is to demonstrate information technology’s role in business by reviewing a copy of popular business magazines. For an instance, “BUSINESS TODAY” is a business magazine in Malaysia. What is 'BUSINESS TODAY' magazine looks like.?? So here is a picture of this magazine’s cover that I would like to share with you guys.. tadaaa! ^-^

                                          

Next, IT also give impacts on business operations. Business functions that receiving the greatest benefits from information technology are:
- Customer services    -HR                      -Finance, sales and marketing    

-Security                       -IT operations      -Operations management

IT also give impact to business as to achieve project goals:-

-Reduce cost/improve productivity      -Streamline supply chain     

-Improve customer satisfaction             -Global expansion

-Create competitive advantage              -Generate growth

Now shall we take a look a picture of common departments in an organization and functions each departments.

                             

Now we take a look what mean by Information technology (IT) and Management information systems (MIS) :-#Information technology (IT)-  a field 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 business function and academic discipline covering the application of people, technologies, and procedures to solve business problems. It is similar to  accounting, finance, operations, and human resources.

Before we start to learn about IT, it is really important to understand :
- Data, information and business intelligence # 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

                                     

-IT cultures# Information-Functional Culture – Employees use information as a means of exercising influence or power over others.
# 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 & new directions.
#Information-Discovering Culture –Employees across departments are open to new insights about crisis& radical changes and seek ways to create competitive advantages.

                                                End for chapter 1! J