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Chapter 3. Strategic Initiatives for Implementing Competitive Advantages. Sell products through a catalog. Sears’ loyalty programs involved customers passed copies of the catalog on to friends and relatives. Learning Outcomes.

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Chapter 3

Chapter 3

Strategic Initiatives for Implementing Competitive Advantages

Sell products

through a catalog

Sears’ loyalty programs involved

customers passed copies of the

catalog on to friends and relatives

Learning outcomes
Learning Outcomes

  • List and describe the four basic components of supply chain management

  • Explain customer relationship management systems and how they can help organizations understand their customers

  • Summarize the importance of enterprise resource planning systems

Three strategic initiatives overview
Three strategic initiatives:Overview

  • Supply chain management (SCM)

  • Customer relationship management (CRM)

  • Enterprise resource planning (ERP)

    Trek’s IT systems increased sales by 25-30 percent

The steps typically taken

when a customer buys a bike from Trek

Trek orders materials from its

suppliers, such as packaging

material, metal, & accessories

Trek sends payments to


Trek receives materials from


Trek assembles the bike

Trek ships the bike to the store

Customer picks up the Trek

bike from the store

Customer places an order for a Trek bike with a store

Store (such as local sporting goods store) receives the order

Store receives the payment from the customer

Store orders the bike from Trek

Store sends payment to Trek

Supply chain management
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 SCM:

    • Supply chain strategy – strategy for managing all resources to meet customer demand

    • Supply chain partners – 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 scm systems effect on porter s five forces
Effective and efficient SCM systems effect onPorter’s Five Forces

  • Effective and efficient SCM systems 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 products or services

    • Create entry barriers thereby reducing the threat of new entrants

    • Increase efficiencies while seeking a competitive advantage through cost leadership

Customer relationship management
Customer Relationship Management

  • CRM – 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 customers

    • Design individual customer marketing campaigns

    • Treat each customer as an individual

    • Understand customer buying behaviors

Enterprise resource planning erp
Enterprise resource planning (ERP)

  • ERP integrates all departments and functions throughout an organization into a single IT system so that employees can make enterprise wide decisions by viewing enterprise wide information on all business operations

  • ERP’s goal – every department or functional area work together sharing common information and not be a “silo”

Briefly explain the differences between scm crm and erp
Briefly explain the differences betweenSCM, CRM, and ERP

SCM systems focus specifically on suppliers

CRM systems focus specifically on customers

ERP systems focus on everything, all processes, departments, and operations for an enterprise

Organizations typically operate by

functional areas or functional silos

Enterprise resource planning erp1
Enterprise resource planning (ERP)

  • Organizations use many integration tools to integrate IT infrastructures including:

    • Intranets – an internalized portion of the Internet, protected from outside access, that allows an organization to provide access to information and application software to only its employees

    • Enterprise information portals (EIPs) – an Internet site owned and operated by an organization to support its operations.

Erp vendors
ERP Vendors

  • Large ERP vendors include

    • SAP

    • PeopleSoft

    • Oracle

  • Most ERP solutions include SCM and CRM components

How levi s got its jeans into wal mart
How Levi’s Got Its Jeans into Wal-Mart

  • Which of Porter’s Five Forces did Levi’s address through the implementation of its updated supply chain management system?

  • Evaluate how Levi’s can gain business intelligence through the implementation of a customer relationship management system

  • Create an argument against the following statement: “Levi’s should not invest any resources to upgrade its current supply chain management system”

Case questions

  • Explain how implementing a CRM system enabled Saab to gain a competitive advantage

  • Estimate the potential impact to Saab’s business if it had not implemented a CRM system

  • What additional benefits could Saab receive from implementing a supply chain management system?