Chapter 3 : Strategic Initiatives for Implementing Competitive Advantages

There are basically 4 strategic initiatives for implementing competitive advantage. Organizations can undertake high-profile strategic initiatives including:

    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:

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

                               ii.            Supply chain partner – partners throughout the supply chain that deliver finished products, raw materials, and services.

                              iii.            Supply chain operation – schedule for production activities

                             iv.            Supply chain logistics – product delivery process

·         Effective and efficient SCM systems can enable an organization to:

                                 i.            Decrease the power of its buyers

                               ii.            Increase its own supplier power

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

                             iv.            Create entry barriers thereby reducing the threat of new entrants

                               v.            Increase efficiencies while seeking a competitive advantage through cost leadership

    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 enterprisewide level

·         CRM can enable an organization to:

                                 i.            Identify types of customers

                               ii.            Design individual customer marketing campaigns

                              iii.            Treat each customer as an individual

                             iv.            Understand customer buying behaviors

   Business process reengineering (BPR)

·         A standardized set of activities that accomplish a specific task, such as processing a customer’s order

·         The analysis and redesign of workflow within and between enterprises

·         The purpose of BPR is to make all business processes best-in-class

·         Reengineering the Corporation – book written by Michael Hammer and James Champy that recommends seven principles for BPR :

1.0   Organize around outcomes, not task.

2.0   Identify all the organization’s processed and prioritized them in order of redesign energy.

3.0   Intergrate information processing work into the real work that produce the information.

4.0   Treat geographically dispersed resources as though as they were centralized.

5.0   Link parallel activities in the workflow instead of just intergrating their result.

6.0   Put the decision point where the work is performed and build control in the process.

7.0   Capture information at once and at the source.

       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.

·         ERP systems collect data across an organization and correlates the data generating an enterprise-wide view.

That's all for chapter 3. Tata :)

Chapter 2 : Identifying Competitive Advantage

Competitive Advantage

§  A product or service that an organization’s customers place a greater value on than similar offerings from a competitor.

§  Competitive advantages are temporary because competitors will keep duplicate the strategy. After then, the company should create a new competitive advantage.

Porter’s 5 Forces Model

Michael Porter’s Five Forces Model is useful tool to aid organization in challenging decision whether to join a new industry or industry segment.

1.      Rivalry among existing competitors.

·         High – when competition is fierce in a market

·         Low – when competition is more complacent

·         Best Practices of IT

a.      Wal-mart and its suppliers using IT-enabled system for communication and track product at aisles by effective tagging system.

b.      Reduce cost by using effective supply chain.

·         Existing competitors are not much of the threat:  typically each firm has found its "niche". 

·         However, changes in management, ownership, or "the rules of the game" can give rise to serious threats to long term survival from existing firms .

2.      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 )

3.      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 advantage.

·         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.

4.      Threat of Substitute Products and 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 :

 Electronic product -same function different brands

5.      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 service feature that customers have come to expect from organizations and must be offered by entering organization to compete and survive.

·         Best practices of IT

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

Porter’s  3 Generics 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-cost leader on price. 

2.      Differentiation

·         Create competitive advantage by distinguishing their products on one or more features important to their customers. 

·         Unique features or benefits may justify price differences and/or stimulate demand.

3.      Focused Strategy

·         Target to a niche market

·         Concentrates on either cost leadership or differentiation.

Relationship between business process and value chain

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

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

Supply chain diagram ; a chain or series of processes that adds value to product and services for customer.

That's all for chapter 2. Tata :)

Chapter 1 : Business Driven Technology

How does IT impact on business operation?

basically, IT increase advancements in technology impact businesses because it creates less of a need for manual labor.

Understanding information technology provides great insight to anyone learning about business.

DEFINITION

• 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 System (MIS) - a general name for the business function and academic discipline covering the application of people, technologies and procedures to solve business problems. MIS is a business function, similar to accounting, finance, operation and human resources. 

• 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

Example of data, information and business intelligent.

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 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 departments are open to new insights about crisis and radical changes and seek ways to create competitive advantages.

That's all for chapter 1. Tata :)

First and foremost :)

Assalamualaikum warahmatullahi wabarakatuh...

Hellooo hellooo everybody!!

So let just start with a brief info on why I'm on blogger again (i have a blog back then when i was 16). Well its because for this very semester, I'm taking IT as one of my subject and my lecturer ask me to create a blog. therefore, this blog is going to be filled with notes and notes and notes as been asked by my lecturer.

Anyway..... as you can see my blog address, its whitechoclatte.blogspot , its kinda sweet and catchy name so maybe...maybe I'll keep on blogging even after i finish this subject. Well let's see how its going to be okay peeps?

Do i need to introduce myself? Hurmmm...

Okay here's a brief introduction about myself.

My name is Khairun Nisaa Bt. Khiron Azman. I'm not a vampire (obviously) but i would really love to be one. I mean c'mon, who doesn't want stay young forever and blessed with super speed, strength and many other super power rite? Hee...okay enough with that. I'm the only daughter in the family, a sister to three crazy lil' brother, a bestfriend to a few lucky girls, obsessed with vanilla, an absolute virgos, a TVD (Klaus!!) , a Gossip Girl (Chuck!!), Running Man, Big Bang, Song JoongKi, Adam Levine*insert highest pitch screaming* and Johnny Depp fan. I just love eating very much so to explain why I'm this fat. blergh!

I think that's a pretty long brief introduction. haiihh..

Tata for now. see you in another post. i mean notes. hew hew hew :D