Chapter 3 - Strategic Initiatives for Implementing Competitive Advantages

Strategic Initiatives are divided into four organizations that are actually can undertake high-profile strategic initiatives including :

1. Supply chain management (SCM)
2. Customer relationship management (CRM)
3. Business process reengineering (BPR)
4. Enterprise resources planning (ERP)

1. Supply chain management 

• The management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.

 There are four basic components of supply chain management include:

•  Supply chain strategy - strategy for managing all resources to meet customer demand. For               example, the strategy is supply chain must record, produce the goods or services and find the             kind supplier that can give the better raw material to produce the product. 
• Supply chain partner - partners throughout the supply chain that deliver finished products, raw       materials and services. For example,supply chain must deal with the supplier to get the better               raw material from them to produce the better product that customer demand.
•  Supply chain operation - schedule for production activities. For example, the company must            arrange their facility location to easy employees transform raw material to the real product that             customers want. 
•  Supply chain logistics - product delivery process.How can we send our goods and services to          the customers? For example like we used car, lorry or others transportation to easy employee            do their work and customer will get their products or services with satisfaction.   

 Effective and efficient SCM systems can enable an organization to:

                  1)      Decrease the power of its buyers

                  2)      Increase its own supplier power

                  3)      Increase switching costs to reduce the threat of substitutes products or services

                  4)      Create entry barriers thereby reducing the threat of new entrants

                  5)      Increase efficiencies while seeking a competitive advantages through costs leadership

           

2.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
•  Such as Charles Schwab and Kaiser Permanente, have obtained great success through the    implementation of CRM system.
•  It is not just technology, but a strategy, process and business goal that an organization must embrace  on an enterprisewide level
• ·It can enable an organization to:

           1)      Identify types of customers         
           2)      Design individual customer marketing campaigns

           3)      Treat each customer as an individual

           4)      Understand customer buying behaviors

3.Business Process Reengineering 

  

• The definitions of business process are a standardized set of activities that accomplish a specific task, such as processing a customer’s order. For example we must key in the customer’s data to the system. It is easy to the employee to refer if the customers make it order again our products or services.
• · BPR is the analysis and redesign of workflow within and between enterprises. It is the purpose of       BPR is to make all business processes best-in-class.

4.Enterprise Resource Planning

• Integrates all department and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprisewide information on all business operations.
• Keywords in ERP is a “enterprise”.
• Sample of ERP :

Past Semester Final Question

PAST SEMESTER CHAPTER 1 & 2

March 2013

PART A

1. True

2. True

3. False

4. True

5. False

PART B

1. D

2. A

PART C

QUESTION 1

There are 5 primary value activities. That is inbound logistics, operation, outbound logistics, marketing and sales, and lastly is service.

First is Inbound logistics, it acquires raw materials and resources and distributes to manufacturing as required. Second, the operations, transforms raw materials or inputs into goods and services. Thirdly is outbound logistics, it’s distributes goods and services to customers. Fourthly, marketing and sales that is promotes prices and sells products to customers and last is services provide customers support after the sale of goods and services.

October 2012

PART A
1. True
2. False

PART B

1. B

PART C

Question 1(a)

    There are four organizational information cultures. First is information-functional culture, employees use information as a means of exercising influence of power over others. For example, a manager in sale refuses to share information with marketing. This causes marketing to need the sales manager’s input each time a new sales strategy is developed. Second is information-sharing culture, employees across (especially about problems and failures) to improve performance. Third is information-inquiring culture, employees across departments search for information to better understand the future and align themselves with current trends and new directions. Lastly is information-discovery culture, it is show that employees across departments are open to new insights about crisis and radical changes and seek ways to create competitive advantages.

Question 2

       There have three cost strategy which is cost leadership, differentiation, and focused strategy. Cost leadership focus on selling the cheap product. Differentiation focused on selling the unique product and the price of the product is quick expensive while focused strategy have two type of product which is low cost and high cost. For examples for broad market at low cost is Walmart such as Tesco, Mydin, Giant, and others. For narrow market is Pay less  shoes such as bata. This is because the price is low. For examples broad market at high cost is Neiman Marcus such as Ikea. For narrow market is Tiffany and Co such as rafflesia. The price is quick high because the product are unique compare to others shop.

March 2012

PART A
1. True
2. False

PART B

1. A

      2. B

      3. C

Chapter 2 - Identifying Competitive Advantages

What is Competitive Advantages ? 

• A feature of a product or service on which customers place a greater value than they do on similar offerings from competitors. For example, Air Asia give a promotion of low price ticket to everyone hence they affordable to buy.

First-mover advantage is a occurs when a organization can significantly impact its market share by being first to market with a competitive advantage. An examples the first company that introduce about the cheap of ticket to those want going to oversea is Air Asia. The other examples is Sony. Sony is the first one that introduce audio player with small size so that the other people can bought the accessories everywhere.

Organizations watch their competition through environmental scanning.

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

             Three common tools used in industry to analyse and develop competitive includes Porter’s Five Forces Model, Porter’s three generic strategies and value chains.

        Porter’s five forces model determines the relative attractiveness of and industry :

-                 

1.          Buyer Power
2.           Supplier Power
3.           Threat of Substitute Products or Services
4.           Threat of New Entrants 
5.         Rivalry Among Existing Competitors

1. Buyer Power

• Buyer power is 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 program is rewards to customers based on the amount of business they do with a particular organization. For example they can choose with whom they want to buy.

2. Supplier Power

• Supplier power is high when buyers have few choices of whom to buy from and low when their choices are many.
• Supply chain is consists of all parties involved in the procurement of a product or raw material.

Organizations that are buying goods and services in the supply chain can create a competitive advantage by locating alternative supply sources (decreasing supplier power) through B2B marketplaces.

• Business to Business (B2B) marketplace is an internet based service that brings together many buyers and sellers.

    

 Two types of business to business (B2B) marketplaces.

• Private exchange is a single buyer posts its needs and then opens the bidding to any supplier who would care to bid.
• Reverse auction is an auction format in which increasingly lower bids are solicited from organizations willing to supply the desired product or service at an increasingly lower price.

3.Threat of Substitute Products or Services

• Threat of substitute or services is high when there are many alternative to a product or service and low when there are few alternatives from which to choose.
• Switching cost is costs that can make customers reluctant to switch to another product or services. Such as , we change the other tailors but they do not do the same as what we want it. 

4.Threat of New Entrants

• Threat of new entrants is high when it is easy for new competitors to enter a market and low when there are significant entry barriers to entering a market.
• Entry barrier is a product or services features that customers have come to expect from organizations in a particular industry and must be offered by an entering organization to compete and survive.

   

      5. Rivalry Among Existing Competitors

• Rivalry among existing competitors is high when competition is fierce in a market and low when competition is more complacent.
• Although competition is always more intense in some industries than in others, the overall trend is toward increased competition i just about every industry.

The Three Generic Strategies-Creating a Business Focus

Organization typically follow one of porter's three generic strategies when entering a new market.

1) Cost leadership- Focus selling cheap products.It is a broad market and Walmart (Tesco                                          and Mydin).

2) Differentiation- The unique product and the price of these product is quick higher.It is more                                   to shopping complex and Neiman Marcus (purchase of furniture items-                                           IKEA).

3) Focused strategy- It divide 2. First is low cost and second is high cost.For a low cost                                                  is Payless Shoes (Bata) and high cost is Tiffany & CO (purchases and                                          gold).

Value Creation

• 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.
• Business process is a standardized set of activities that accomplish a specific task, such as processing a customer's order.
• Value chain is views an organization as a series of processes each of which adds value to the product or service for each customer.  
• The competitive advantages is to target high and low adding activities to further enhance their value and to increase their value.

Chapter 1 - Business Driven Technology

   What is IT ?IT is a simple word from a information technology. Information technology can be defined as a field concerned with the use of technology in managing and processing information.It is an important enabler of business success and innovation.In my own word, information technology is a ease of doing business because without information technology, we are difficult to communicate to the other people.

   Besides, the name of general business function is Management information systems (MIS). This is for application of people, technologies and procedures to solve business matter.It is also similar to Accounting, Finance, Operations and Human Resources.

   In Information Technology basics , we must understand about the data, information and business intelligence , secondly about IT resources and lastly about IT cultures.
   Firstly, data is raw facts that describe the characteristic of an event. The raw materials that is do not process again, people is actually get the materials that are fresh.For example the final result. The information is a data converted into meaningful and we can useful context. Business intelligence is applications and technologies that are used to support decision-making efforts. For example, we want to know how many people get A  in class.
  Secondly, IT resources.Three thing in IT Resources that are very important is People use,Information technology to work with and Information.
  Lastly is IT Cultures.It can be divided into four organization information that is information-functional culture,information-sharing culture,information-inquiring culture and information-discovery culture.Information-functional culture is an employees use information of exercising influence or power over others. For example,  a manager in sales refuses to share information with marketing. They do not want to share the information to the other people. Moreover, the Information-Sharing Culture is a employees across department trust each other to use information(especially about problems and failures).They is sharing the all of information that they get it. Information-inquiring culture is employees across departments search for information to better understand the future and align themselves with current trends and new directions. This is the thing that are do not have in systems , so that people should ask the department. Furthermore, the Information-Discovery Culture is employees across departments are open to new insights about crisis and radical changes and seek ways to create competitive advantages. There are not related but they try to find and spread the information.