1. Teguh I Santoso, MBATeguh I Santoso, MBA
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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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
Leader
The Senior Executive who authorizes money and people, and who provides
motivation
Process Owner
One Manager who already has a serious stake in the process under study, and
who guides the effort for that process
Reengineering Team
A group of people who examine the existing process and then redesign it
Steering Committee
A group of Senior Executives who connect the effort to larger company
strategies and who encourage people to join in supporting the changes
Reengineering Czar
A 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
