chapter 3
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Teguh I Santoso, Teguh I Santoso, MBAMBA
Chapter 3Chapter 3
BPR & BUSINESS STRATEGYBPR & BUSINESS STRATEGY
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What is StrategyWhat is Strategy
A company’s strategy consists of the set of competitive moves and business approaches that management is (or will) employing to run the company
Strategy is management’s “game plan” to Attract and please customers Stake out a market position Conduct operations Compete successfully Achieve organizational objectives Solve “the problem”
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Competitive StrategyCompetitive Strategy
The inverse relationship between profit margins or returns and the intensity of competition: intensity of competition goes up, margins and returns
are driven down This can require changes in competitive strategy :
to remain in an industry and, to exit a business or an industry
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Porter’s Competitive StrategyPorter’s Competitive Strategy
One widely accepted methodology in developing business competitive strategies is Michael Porter’s (1980) Five-Force Model
The force is referred to micro-environment and macro-environment
The forces is close to a company that affect its ability to serve its customers and make a profit
A change in any of the forces normally requires a company to re-assess the marketplace.
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Porter’s (cont.)Porter’s (cont.)
Porter (1980) suggested that “the goal of competitive strategy for a business unit in an industry is to find a position in the industry where the company can best defend itself against [the five] competitive forces or can influence them in its favor”
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Five Forces Porter’s Competitive Five Forces Porter’s Competitive StrategyStrategy
Rivalry amongst existing competitors
Threats of New entrance
Threat of subtitute products or services
Bergaining power of buyers
Bergaining power of suppliers
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Bargaining Power of BuyersBargaining Power of Buyers
The ability of customers to put the firm under pressure and it also the customer's affects the sensitivity to price changes.
Refers to the ability of customers to force : down prices, reduce product delivery cycle time, demand higher quality, and require better service
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Bargaining Power of BuyersBargaining Power of Buyers
These factor tend to increase bargaining power of buyers Buyer volume high Price of total purchase buyer information availability ability to backward integrate availability of existing substitute products Low profit margin Purchase is not very important to buyer
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Bargaining Power of SuppliersBargaining Power of Suppliers
The ability of suppliers to increase input material prices, increase product delivery cycle time reduce the quality of goods supplied
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Bargaining Power of SuppliersBargaining Power of Suppliers
These factor tend to increase bargaining power of suppliers Dominated by a few suppliers Suppliers are more concentrated than the buyers No substitutes Supplier has more important customers Supplier’s input is critical
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Threat of New EntranceThreat of New Entrance
Profitable markets that yield high returns will draw new firms to enter the market
The result is : Many new entrants which will effectively decrease
profitability
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Threat of New EntranceThreat of New Entrance
Factors tend to raise barriers to market entry by new entrants Economies of scale Capital requirements Access to distribution Government policy The existence of barriers to entry (patents, rights,
etc)
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Threat of Substitute ProductsThreat of Substitute Products
Substitute products refers to other products that can be used to satisfy the same need
Factors can be affect to substitute products: Buyer tendency to substitute Price performance of substitute products High elasticity demand
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Rivalry Among Existing CompetitorsRivalry Among Existing Competitors
The major determinant of the competitiveness The degree to which companies respond to competitive
moves of other companies in the same industry Rivals can compete aggressively and rivals compete in
non-price dimensions, such as Innovation New products Marketing or advertising Technology
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Rivalry Among Existing CompetitorsRivalry Among Existing Competitors
Factors that can be affects for high rivalry, Number of competitors Rate of industry growth High exit barriers Low differentiation
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Why BPR?Why BPR?
Do or Die Minimize threat from rival firms Attain sustainable competitive advantage Leverage on unprecedented opportunity to take giant
leap forward
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Type of BPR CompanyType of BPR Company
3 Jenis perusahaan yang menjalankan BPR
1. Perusahaan yang sedang mengalami masalah besar
2. Perusahaan yang belum mengalami kesulitan tetapi manajemen mereka yang mempunyai pandangan ke depan melihat akan ada masalah yang segera datang
3. Perusahaan yang berada dalam kondisi puncak
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Beberapa hal yang dilakukan BPRBeberapa hal yang dilakukan BPR
Beberapa pekerjaan digabungkan menjadi satu
Para pekerja membuat keputusan
Tahap-tahap dalam proses dilakukan menurut kebiasaan
Proses-proses mempunyai banyak versi
Pekerjaan dilakukan pada tempat yang paling berarti
Pemeriksaan dan kontrol berkurang
Rujukan minimum
Manajer kasus membuat satu titik kontak
Sentralisasi dan desentralisasi merata
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The Kinds of ChangesThe Kinds of Changes
Changes Before After
Work Unit Functional Departments Process Teams
Jobs Simple Tasks Multi-dimensional Work
People’s Roles Control Empowered
Job Preparation Training Education
Focus of Performance and Compensation
Activity Result
Advancement Criteria Performance Ability
Values Protective Productive
Managers Supervisors Coaches
Organizational Structures Hierarchical Flat
Executives Scorekeeper Leaders
Text Book: Bab 4
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Who will ReengineerWho will Reengineer
LeaderThe Senior Executive who authorizes money and people, and who provides motivation
Process OwnerOne Manager who already has a serious stake in the process under study, and who guides the effort for that process
Reengineering TeamA group of people who examine the existing process and then redesign it
Steering CommitteeA group of Senior Executives who connect the effort to larger company strategies and who encourage people to join in supporting the changes
Reengineering CzarA Senior Manager who develops reengineering competence in the company and develops synergy across various efforts
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How it is supposed to workHow it is supposed to work
The Leader appoints a Process Owner
The Process Owner assembles and leads the Reengineering Team
The Reengineering Czar develops the skills and abilities of the Reengineering Team
The Steering Committee ensures that this Team develops strategic result
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Thank You
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