This phase requires an analysis of the way the reengineer produces the products

and sells its services, how jobs are structured, who accomplishes what tasks and
the results of each procedure. Then the elements that should be redesigned to
make jobs more satisfying and customer focused must be determined.

3. Retool :
This phase requires a thorough evaluation of the uses to which advanced
technologies are put currently, especially electronic data processing systems, to
identify opportunities for change that can improve the quality of service and
customer satisfaction.

Requirements of the Reengineering Process :

Reengineering requires a massive change in the reengineer involving lay-offs and huge
investments in automation and information technology. However, proper reengineering
of business processes will bring big benefits to the company. Reengineering should
start with a clean state approach. It requires selection and focus on critical business
processes, process analysis, cross-functional teams, support from a strong leadership
and the use of information technology as enablers. These are explained below:

1. Clean Slate Approach

This is the original philosophy of BPR that challenges the fundamentals of a process. It
involves a fundamental questioning of the techniques and entails suitable benchmarking
to comprehend the full details of the current processes and to assess gap areas from
the customer’s perspective. Reengineering starts from the future and work backwards
unconstrained by current approaches.

2. Critical Processes
The emphasis of reengineering should be on identifying core business processes rather
than the functional and support processes, which have a greater scope for breakthrough
improvements rather than incremental improvement. Reengineering should be assured
for essential processes such as new product development or customer service that
provides what the customer wants at the price the customer will pay.

3. Process Analysis

A reengineering team must have a clear understanding of the current process — what it
does, how well it performs and what factors affect it. Such an understanding can reveal
areas in new thinking will provide breakthrough improvement. The team must work on
every procedure involved in the process throughout the reengineer, recording each
step, questioning why it is done and then eliminating it if it isn’t really necessary.

4. Cross-Functional Teams

A team consisting of members from each functional area affected by the process is
required for carrying out a reengineering project. Reengineering works best at high
involvement workplace, where self-managing teams and employee empowerment are
promoted and nurtured. Top-down and bottom-up initiatives can be combined — the
top-down for performance targets and the bottom-u for deciding how to achieve the
targets.

5. Strong Leadership

The top management should provide the required resources and create a sense of
urgency, making a case for change that is compelling. Strong leadership by senior
executives is required to execute a reengineering project. The leadership should set
and monitor key performance objectives for the process.

6. Information Technology

Information technology is a key enabler of BPR. Information should be captured once,

at the source and be reused often. Information should not be keyed-in more than once.
Information processing work should be merged with the real work that produces
information. Most reengineering projects design processes around information flows
such as customer order fulfillment.
Business process reengineering is the complete overhaul of existing core business
processes in order to improve outputs such as profits, product quality, costs, or speed.
BPR is an extremely involved process that requires buy-in from the entire organization,
precise planning, and a dedicated team to move forward. Depending on the size of your
business, BPR can take anywhere from a few months to years to complete.

The business process redesign is it is a complete refurbishment of any organization’s

key business process. This is done to achieve a significant leap in measurement of the
performance. The examples include, return on investment (ROI), cost-cutting, and
service quality.

Business processes that are supposed to be redesigned cover the whole range of
critical processes. The critical processes involve manufacturing, production, sales, and
customer service. Businesses might call in mentors and counselors to lead or contribute
to the redesign process.

BPRs may be sometimes being costly and time-consuming, and lead to redundancies
and the disturbance in the workflow. So, you need to make BPR strategies very
carefully.

The whole system and every business process within it can be redesigned from the very
start or even they can be casted-off altogether if they are not adding any value to either
the company or its clients.

So, companies must review their operations, mission statements, and other crucial
components essential for business prior to making any change in their business
processes. For example, one may consider the following norms:

• Identify the important customers.

 • Determine the way your business delivers value.
• Ask yourself what exact processes need to be redesigned!
• Compare your mission with the long-term goals. And check if the current
objectives fulfill those.

The process redesign helps for overhauling of business process of an

organization by using following steps.

o Set up achievable and clear objectives and goals.

o Analyze all the business processes and identify the key business processes.
o Follow data capturing and processing on a daily basis.
o Merge multiple workflows in one single workflow.
o Design and develop changes to empower people involved in the process.
o Implement and monitor the changes.

Set up achievable and clear objectives and goals :

The design process required to achieve certain specific objectives. It is important

to understand how you will take actions to achieve those objectives. And, this is
possible only when you establish a crystal-clear outcome (what you expect from
the new design of the business process). When you set or target a clear and
achievable goal, then you can ensure that all the tasks work accordingly towards
the same desired outcome. For instance, if you aim to create a better and more
secure network then you have to make sure that everything from password reset
processes to the ways people print need to be taken into account.

Analyze all the business processes and identify the key business
processes :

I understand that keeping a track of each and every process can be a cumbersome task
to do but it’s crucial to have a clear and updates lists of them. If you don’t know the
depth and core of the business processes, you can never make genuine and effective
changes within your business.

Follow data capturing and processing on a daily basis :

Make it a routine task to capture and record data as you receive them. This is essential
to understand the in and out of business processes and what changes can you make for
improving it. Don’t load yourself with extra work by keeping the data analysis part for
later. Track and record them immediately.

Merge multiple workflows in one single workflow :

It’s always recommended to keep things simple and uncomplicated in a business.

Instead of creating multiple workflows, merge everything at single place.
Don’t separate new activities and changes to a different stream, try integrating them to
the same workflow. Streamline and consolidate all your business activities by
developing and improving designated business processes for each core business
activity. This also implies to the freelancers and contractors as well. In today’s business
world, they prove to be an asset to your business. Don’t treat them as mere external
resources. Count them equal to your regular, in-house employees.

Design and develop changes to empower people involved in the

process :

It is the simplest and easiest one. Empower the employees involved in the process to
take charge and make decisions regarding them. Check if multiple approval levels are
even required, or is it a sheer waste of time! Shred unnecessary red tapes and create a
single approval system wherever possible.
Implement and monitor the changes:
Successful business process redesign projects are clear, crisp and controlled. They dig
out expertise from people all over the business so they can develop grounded
processes in reality. Implementing and monitoring the impact of the change is important
to check the working of the process. If the concept doesn’t work then all the processes
need to repeat all over again. Many public and private sector organizations and SMEs
world-wide have undergone major. Business process reengineering efforts. These top
tier have applied BPR and seen positive results. Some of them include:

• IBM
• Sony
• Walmart
• Hewlett-Packard
• Citibank

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Q. 2 Make comparison of Business Process Re-engineering and Total Quality

Management with examples.(20)

Reengineering and Total Quality Management (TQM) are neither identical nor in
conflict; they are complimentary ,While Reengineering and Total Quality Management
focus on processes, customers and higher efficiency, there are also differences
between them. Reengineering moves a company where they need to be very quickly
usually by radical change, whereas TQM moves a company in the same direction more
slowly, usually with incremental adjustments. Reengineering is a top down, vision driven
effort that requires continuous senior management participation and support, while TQM
once implemented into a company's processes can work day and day out without much
attention from management.
A comparison between Business process reengineering and TQM is given in the
following

(i) Both BPRE and TQM primarily focus on customers. Success of BPRE and TQM is
reflected in adequate response to the changing needs of customers in a competitive
business environment. Even though BPRE does not explicitly high-light the concept of
internal customers like TQM, its success very much depends on satisfaction of internal
customers.

(ii) Both BPRE and TQM are process-oriented concepts involving cross-functional
activities. While TQM may or may not involve break-through improvements, BPRE
always attempts to achieve major or dramatic improvements in the existing business
processes. For process improvement, TQM and TQC tools such as Pareto analysis,
cause-and-effect diagram, control charts etc., to identify the root causes of problems
and to eliminate them. BPRE aims at drastic changes to improve the processes which
are markedly different from the existing processes.

(iii) Both BPRE and TQM emphasise cultural changes in the organisation and
behavioural changes in employees by introducing customer focus and process-
orientation in the minds of employees. Employees are motivated to behave not just as
job holders in the organisation but as part of the whole process of the business.

(iv) Both BPRE and TQM require top management support. The chief executive of the
company has to play the role of a leader for successful implementation of BPRE and
TQM. Since both BPRE and TQM are supporting processes to achieve business goals,
it is necessary that the top management must take initiative in these processes, rather
than delegating the responsibility to middle management.

(v) Both BPRE and TQM are not “one-time” experiments. Both need to be implemented
on a continuous basis.
(vi) Every employee in every department is directly or indirectly involved in BPRE and
TQM.

QM is based on customer focus and realization that if the customer is not satisfied,
TQM is used by an organization is to aim to sustain or outperform customer expectation
in order to earn a reputation of being a high quality product producer.However, quality is
variable and it must be based on customer definition. Therefore, it must have a system
that explores customer’s perception and expectations of a product or service, indicating
this is a crucial element of for achieving outstanding TQM programme. Nasierowski
(1997) emphasis that TQM is about research data and it is the base of an action that will
be enforcing in the future businesses.

Thus, TQM is necessary to identify the customers and determine their needs and wants.
This could be done when the organization met the expectation of customer (Bank
1992); giving a strong impression on providing high quality products and services. TQM
is also seen as a continuous program that continues to strive towards zero defects to
meet 100% of customer satisfaction.

In addition, it is also stated by Zairi and Sinclair (1995) that the integration of re-
engineering with TQM philosophy is a continuous improvement and can be highly
effective. In addition, customer can be containing personal customer or industrial
customers i.e. distributors, suppliers or distributors. According to Shoal et al. (1997),
says that when the organization structure is bigger, the organization also recognizing
both internal and external customers.

There are three elements that if the organization wants to achieve the aim of a high
quality product or service; time factor when delivering a product, cost efficiency of the
product and quality that customer perceived (Field & Swift 1992). When there is a
minimal usage of designing a product, the element of high quality it is not competitive in
the marketplace, thus, the cost and the price will affect the products tremendously.
This problem is concerned because TQM it is all about reducing cost by minimize the
defects rework, scrap, late deliveries and surplus items, etc (Bank 1992). It is believed
that zero defect precuts is the most possible time efficient, therefore, this will emphasis
on prevention rather than inspection (Field & Swift 1992).

On the other hand, the structure of an organization and culture are important. These
elements are considered when implication of TQM is occurred. TQM method of
approach sees an organization as interactive networks that consist of communication
and control (Flood 1993).

But, communication is tough when the organization is big and communication will not be
efficient when there is many of a big contrast of position, e.g., a toilet cleaner and Chief
Executive Officer, they could not communicate well because of there is no similarities in
job position and also the workplace . Therefore, the changes in culture may also be one
of the factor that to ensure that all departments are proceeding in the same direction.

TQM is not only concerning about the commitment from the management, it also needs
the commitment from the employee. If employee is not supportive to the approach, the
road to success is hard to achieve. From the management, the leadership and ability of
conveying the benefits of TQM are important (Goestsch & Davis 1995).

Manager and employee resist TQM can be a stopper to the cultivation and usage of the
quality practices (Sohal et al. 1997). TQM is also customer focused but in the
meantime, it also requires all employees and teamwork (Moosbruker & Loftin 1998).
TQM culture would facilitate the development of human resource but, the development
would focused more on customer service skills, technical skills and other skills that are
concerning about improvement of service quality.

TQM is about continuous improvement of products, services and processes through the
commitment that is given by the people at the workplace (Nasierowski 1997). TQM
approach view organization as interactive communication. Therefore, communication
should be vertical as well as horizontal because this process included member of the
organization and the internal customer. Thus, the organization communicates with
suppliers and consumers to make sure that the quality that they aimed is met (Flood
1993).

There is steps of implementing TQM; defining products, establishing project teams,

creating a mission, identifying the customers, determine customer requirements,
develop specification of products, determine the team process, identifying the cost of
the output, evaluate the output and measure the satisfaction of the customer (Bank
1992).

Double loop learning allows the organization to go outside the boundaries and penetrate
a new market. It is much more concerned with challenge of the current procedures,
policies and standard. Double loop recognizes that the way things are done may not e
the best way and that alternative ays may exist (Robbins 1998). Therefore, this learning
is the fundamental to the successful implementation o TQM as they are primarily
concerned with the big scale change and process.

BPR are not adequate because the criticism that in a review stated the implementation
of new technology is focused, rather than the improvement of the organization process.
Information technology is just a solution to problems that a business faced and,
promoting the existence of the issues just to improve the sales on their own products
and services (Thomas 1994). BPR has been criticized as a business will do BPR only
when the organization wants to downsize and reducing the cost, with little
considerations for quality or long term business goals (Mumford & Hendricks 1996).

BPR starts with a vision or idea. Therefore, they can be sourced from these three
method; benchmarking, which they can copy the ideas from another competitors, buy
solutions from the Information Technology companies or they can be their own ideas
(Thomas 1994). Benchmarking does not allow of gaining competitive advantage, buying
an idea or solutions is expensive, which in result, buying a solution sometimes do not
relate the products or services that the company sold. While the original ideas seem to
be the only way to develop unique and relevant solution but, these methods are bind by
the existing frameworks, thus, it is higher in chances of being accepted. Therefore,
there is a criticism about this method stating it is mutually related to its root and when it
is associated, it will fall down to a great number of downsizing (Thomas 1994).

BPR is just an approach that is concerned about the process of rethinking the current
system or processes, which it always comes out a new idea, but not sustaining the
current system or products, which could lead to a low quality product or services.

BPR also have to come to a stage where when the competitors pressurize the
organization, they have to cut the cost and may have to downsize as an option. In
addition, BPR does not have a particular set of procedures for managers to follow
(Mumford & Hendricks 1996). BPR are much more to concern about radical change in
work process, which requires a culture change and often it mean to change in the
organizational structure. BPR is widely focused on quality and defines improvements
more broadly.

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Q. 3 what are the various steps involved in the management process
toward the re-engineering of business improvement? Discuss
with examples.
(20)
Business process re-engineering definition is fundamental rethinking and redesigning of
business processes so as to attain vivid improvements in all the critical aspects like
service quality, process outcome, cost, and process speed.Business process
reengineering (BPR) intents to cut down the enterprise costs and reduce the
redundancies and repetitions within the process on a large scale. Business process
reengineering gained popularity in the world of business in the 1990s. The concept was
introduced inspired by an article called ‘Reengineering Work: Don’t Automate,
obliterate’, published in the Harvard Business review by Michael Hammer.He developed
this concept because he observed that most business houses were integrating new
technologies with the pre-existing fundamentally inefficient processes. Nobody even
bothered to think of creating something new and different, based on the advanced new
technologies.

They used technology just as a means to automate their existing systems and
processes, rather than modifying anything in the process. This can be thought of as
using technology in order to “upgrade” a horse with lighter horseshoes to make them
run faster, instead of building a car.The process of Business Process Reengineering
(BPR) start just with a blank sheet of paper, where you rethink and observe everything
about the existing processes to make it more value-aided and beneficial for customers.

This new system is primarily focused on increasing emphasis on the customer needs
and values. organizations work to minimize the layers within an organization and cut
down the unproductive activities in two major areas:

Redesign and redraft functional organizations into cross-functional teams.

Effectively use technology for the improvement in data distribution and decision-making.
And more and more technological advancements every day, BPR is gaining a lot more
popularity and relevancy with each passing day.

Business Process Re-engineering Steps :

Business process re-engineering is not an easy task to perform. BPR works to changing
the complete course of the said processes at the core. This makes it extremely risky,
laborious, costly and time-consuming process.You need to be capable enough to
manage and carry out each and every step carefully and successfully. You may face
many failures in your attempts to make a reasonable and beneficial change in the
processes.
Here are certain steps to follow for efficient Business Process Re-
engineering:

Step #1: Identify the Need for Change and Communicate

For small startups, this step is probably very easy. You can go for BPR when you
realize that your product is receiving a huge user drop-off rate. Then, the next thing to
do is informing the co-founder, suggest a direction to spindle and you are good to go for
the further steps.For a large business, the first step is the biggest hurdle itself. You will
always find individuals who are satisfied and happy with the existing ways of working.
These individuals can be both, from management side and the employees. The
management will most probably be afraid of getting their investments sunk, and the
employees might see it as a job security threat.Before anything else, you will have to
make up their minds and convince them why the change is required for the firm. This
shouldn’t be difficult if your company isn’t doing well.

Step #2: Build a Great Team of Experts

Business process re-engineering demands a team of highly motivated, and skilled team
of individuals who has the potential to carry out all the needed steps involved.
The team of experts majorly consists of:
Senior Manager: For supervision and calling out the shots for taking major decisions. If
your BPR team doesn’t have anybody onboard from the senior management, then they
will have to get their approval for every little change.

Operational Manager: He is the one who is aware of the ins-and-outs of the process.
Their process knowledge can prove to be a great asset to build a new, effective and
more efficient process.

Reengineering Experts: They are the ones who expertise in the field from IT to
manufacturing. They will discover where and how the right changes should be
implemented to yield the best outcomes. The changes might be anything – software,
workflows, hardware, etc.

Step #3: Define Key Performance Indicators (KPI) for the Inefficient Processes

After the team is ready and you are all set to launch the initiative, there will be the need
to define the correct Key Performance Indicators (KPIs). BPR is introduced to optimize
your process. Formulate BPR strategies that can bend as per your business
requirements and, not the other way around.KPIs usually differ a lot depending on the
type of process you’re optimizing. And the following are the most typical ones:

Manufacturing:

o Cycle Time – The total time taken from initiating to concluding a process.
o Changeover Time – Time in between required to shift the line from making one
product to the next.
o Rate of Defect – The total percentage of defective products manufactured.
o Inventory Turnover – The time taken in the manufacturing process to convert
inventory into products.
o Planned VS Emergency Maintenance – The proportion of the times when planned
maintenance and emergency maintenance happened.

Step #4: Reengineer and Compare KPIs of the Processes

After the all the above steps, it is important to perform A/B testing to check the working
and efficiency of the new process. Start by implementing the modifications and solutions
on a significantly small scale.
Now all you are left to do is – put up your theories into practice and see how the KPIs
are holding up. Once you realize that the new solution works better, and start scaling
the solution gradually. Eventually put it into action within other company processes as
well. If the new solution doesn’t prove to be that fruitful, then you need to start the
process all over again. The cycle of finding loopholes and solutions to them repeats until
you form a desirable, effective process.

Business Process Reengineering works methodology:

Business Process Reengineering (BPR) is a sensational initiative for change. Its

methodology is based on five core areas, which are laid as follows:
Refocus: Align company values with the customer needs and demands.
Redesign: Draft and design core processes to enable improvements using information
technology (IT).
Reorganize: Convert individual teams into cross-functional teams to hold up end-to-end
responsibility of a process.
Rethink: Think about the basic organizational needs and issues people facing with the
current system.
Improve: Keep in mind all the business processes across the organization and work to
improve them.

There are many benefits of business process re-engineering to your business. Some of
them are as follows:

Cost-cutting and reducing cycle times:

Business Process Reengineering eliminates all the unproductive and futile activities
within an organization. This drastically reduces the costs and cycle times for the
employees performing them. With team reorganization the need for management layers
is eradicated.

This also enhances the flow of information eliminating the errors and rework efforts
required due to multiple handoffs.
Improve work, product and service quality :

Business Process Reengineering minimizes work fragmentation and establish clear

responsibility and ownership of the processes. This impacts the overall process
effectively. Performance measurement can be evaluated easily with a prompt feedback
and this allows workers to gain insight on the output responsibility.

Some of the tangible benefits of business process re-engineering:

o Integration within the organization.

o Empowered employees.
o Reduction in the process steps.
o Natural order of process steps followed.
o Process transparency increases.
o Drastic reduction in the manufacturing costs.

So Reengineering is the fundamental rethinking and radical redesign of business

processes to achieve dramatic improvements in critical, contemporary measures of
performance, such as cost, quality, service, and speed.

However, business process reengineering is not business process improvement. It’s not
automating existing processes and keeping them, but restructuring them, reshaping
them so they bring value to the company and customers. It means throwing away all
your current process documentation and creating a new one from scratch.

Q. 4 How does the business organization deal customer friendly for

getting competitive edge in the market in your view? Discuss with
examples.(20)
Competitive advantage is not likely to be a formal goal of a business. However, having
competitive advantage means a company will have resources to pursue its goals. When
firms beat their competitors it means they can finance more research and development
to improve their products or services; they can spend more on advertising and
promotions to attract customers; they can donate to charities to improve community
relations; and they can provide greater profits to their owners. In short, competitive
advantage is the means to meeting organizational goals.

Because strategy is a plan to achieve long-term goals, we can define strategy as a plan
to create sustainable competitive advantage.Competitive advantage is what makes an
entity's goods or services superior to all of a customer's other choices.

While the term is commonly used for businesses, the strategies work for any
organization, country, or individual in a competitive environment.
For instance, a retailer that offers the lowest prices around has a competitive advantage
over other retailers whose prices are higher. The low prices can make that retailer's
products more attractive than other, higher-priced options.

How Competitive Advantage Works

To create a competitive advantage, a business must provide a clear benefit to its target
market that's better than what the competition offers.It must be something that
customers need, and it must offer real value. Business owners also need to stay up to
date on the new trends that affect the product, including any new technology.

For example, in the early days of the internet, newspaper owners were slow to respond
to the availability of free news online. They thought people would continue to pay for
news delivered on paper once a day. By not staying up to date on the advance of the
internet, they allowed their competitive advantage to slip away.
A business also needs to be closely attuned to its target market to create demand, the
driver of all economic growth. They need to know exactly who their customers are and
how they can make their lives better. In the example above, newspapers' target market
shrank to older people who weren't comfortable getting their news online.

Finally, it's important to identify competitors. Competitors aren't just similar companies
or products. They also include anything else your customer could do to meet the need
you can fulfill. Newspapers thought their competition was other newspapers until they
realized it was the internet. They didn't know how to compete with a news provider that
was instant and free.

Gaining a competitive edge can help you in reaping a lot of benefits. Here’s why a
competitive edge is important:

1. Attract more new customers.

2. Gain the customer’s loyalty.
3. Stand out of the competition and shine.
4. Maximizing the revenue by expanding the customer base.

A little competition can be a healthy thing. It can also be both costly and disastrous if
you aren't up to par with others in your particular business or industry. How you handle
competition can be a direct link to the success or the failure of your company. we can,
however, significantly increase your chances of coming out on top by creating a
competitive edge.

Having a competitive edge means possessing an advantage over your competition. This
does not take the luck of the Irish, but rather some solid strategic planning. Before you
can accurately identify your competition, it's crucial to first define and analyze your
target market.
o What are you selling and to whom
o Next, make a list of those companies trying to do the same. What are their
strengths and weaknesses
 o Their strategies and goals?
o How do they draw in customers?
o What, if anything, makes them stand out from the pack?

If you don't have this vital information, get it quickly. You shouldn't live in awe of your
competition, nor should you fear them, but you must find out who they are and what
makes them attractive to current and potential customers. Assessing your competitors
openly and honestly will play a key role in helping you develop a competitive edge.

Remember, winning companies aren't successful by accident, though often it may seem
that way. A closer look usually reveals that most have sized up their target markets and
zeroed in on a unique approach to meet their customers' needs, values and
expectations. Through important considerations like location, product, services and
product features, they have somehow found a fresh spin, a new way to offer buying
incentives that similar companies either can't or don't offer.

Once you have developed a competitive edge, maintaining it will be a daily challenge. It
will require you to look into your crystal ball and attempt to forecast where the trends
and changes in your industry will come from, and what your company can do to stay
ahead of the game. It will demand that you continuously track your competitors and their
future plans. You will also need to recognize that through the course of time your
customers' needs may change due to a variety of circumstances. Your company must
be flexible and willing to change as well.

The following questions are designed to help you determine whether your company has
a competitive edge:

1. Have I clearly defined my company and its target market?

2. Who are my competitors?
3. What is my company's clear-cut strategy and plan for success?
4. Do I regularly track my competitors' moves?
 5. Do I take advantage of my competitors' weaknesses?
6. What have I learned from my competitors' mistakes?
7. What have I learned from my competitors' strengths?
8. Do I take advantage of competitive opportunities?
9. Does my company possess a uniqueness that easily separates it from my
competitors?
10. Would I pay money to use my own product or service?
11. How do my prices compare with the rest of my industry?
12. Who are my customers?
13. Do I have a loyal customer base?
14. Am I sensitive to my customers' needs and requests?
15. Are my employees trained in customer service?
16. What trends do I see for my industry in the future?
17. Do I have the capabilities and resources to compete in the market five to 10
years from now?
18. What is my vision for my company five to 10 years from now?

Competitive advantage is defined as the capacity a corporation has to outdo its

competitors in both quality and price. A successful business can beat its competitors in
the market in terms of sales and revenue margins because of these advantages.
Businesses may frequently outperform their rivals thanks to them. It is possible to get a
competitive advantage in business, from excellent branding to well-thought-out
distribution networks. A self-checkout lane is a mechanism for gaining a competitive
advantage, especially in supermarkets. Thanks to the new delivery technique, large cost
savings can be passed on to customers using a self-checkout lane.

Competitive advantage is often a result of a combination of variables, such as:

1. The quality of the item

2. Pricing strategy
3. Customer service
 4. Positioning in the market
5. Networks of distribution
6. Access to cutting-edge technology and new ideas

A product or service's target market will be more likely to purchase it if it combines these
attributes. A competitive advantage is either the foundation of a company or a set of
criteria that can be used to locate one. Deduction and elimination are useful tools for
solving a lot of these problems. A competitive edge is something that rivals lack. To gain
a long-term advantage over competitors, locate something that they can't easily
reproduce or imitate.

A company's competitive advantage sets it apart from its competitors. As a

consequence, one will be able to attract more clients and foster loyalty to their
company. Competitive advantage of this kind should be one of the most important aims
of any organization. Corporate America demands it these days.

Competitive Advantage in Marketing

When a corporation has a competitive advantage in marketing, it can draw in more

customers and expand its market share. Smaller businesses can't compete since they
can't offer the same overall value. The company owner and his management team
devise marketing strategies to optimize revenue during the annual planning process.
Competitive advantage in marketing plays an integral part in a company's business
operations because it gives a company the cutting edge over its competitors, which
could prove beneficial in its long-term objectives. Typically, it attracts customers towards
its products and services over its rivals. A competitive advantage in business is helpful
because it distinguishes a company from its competitors. Thus, it brings more
customers, which translates to a significant increase in sales, brand loyalty, and high
prices, which means a higher return on investment. It's the dream of every business to
establish a competitive advantage in its operations.
Strategic planning is the art of creating specific business strategies, implementing them,
and evaluating the results of executing the plan, in regard to a company’s overall long-
term goals or desires. It is a concept that focuses on integrating various departments
(such as accounting and finance, marketing, and human resources within a company to
accomplish its strategic goals. The term strategic planning is essentially synonymous
with strategic management.

Strategic Planning Process

The strategic planning process requires considerable thought and planning on the part
of a company’s upper-level management. Before settling on a plan of action and then
determining how to strategically implement it, executives may consider many possible
options. In the end, a company’s management will, hopefully, settle on a strategy that is
most likely to produce positive results (usually defined as improving the company’s
bottom line) and that can be executed in a cost-efficient manner with a high likelihood of
success, while avoiding undue financial risk. The development and execution of
strategic planning are typically viewed as consisting of being performed in three critical
steps:

1. Strategy Formulation

In the process of formulating a strategy, a company will first assess its current situation
by performing an internal and external audit. The purpose of this is to help identify the
organization’s strengths and weaknesses, as well as opportunities and threats (SWOT
Analysis). As a result of the analysis, managers decide on which plans or markets they
should focus on or abandon, how to best allocate the company’s resources, and
whether to take actions such as expanding operations through a joint venture or merger.

Business strategies have long-term effects on organizational success. Only upper

management executives are usually authorized to assign the resources necessary for
their implementation.
2. Strategy Implementation

After a strategy is formulated, the company needs to establish specific targets or goals
related to putting the strategy into action, and allocate resources for the strategy’s
execution. The success of the implementation stage is often determined by how good a
job upper management does in regard to clearly communicating the chosen strategy
throughout the company and getting all of its employees to “buy into” the desire to put
the strategy into action.

Effective strategy implementation involves developing a solid structure, or framework,

for implementing the strategy, maximizing the utilization of relevant resources, and
redirecting marketing efforts in line with the strategy’s goals and objectives.

3. Strategy Evaluation

Any savvy business person knows that success today does not guarantee success
tomorrow. As such, it is important for managers to evaluate the performance of a
chosen strategy after the implementation phase.

Strategy evaluation involves three crucial activities: reviewing the internal and external
factors affecting the implementation of the strategy, measuring performance, and taking
corrective steps to make the strategy more effective. For example, after implementing a
strategy to improve customer service, a company may discover that it needs to adopt a
new customer relationship management CRM software program in order to attain the
desired improvements in customer relations.

All three steps in strategic planning occur within three hierarchical levels: upper
management, middle management, and operational levels. Thus, it is imperative to
foster communication and interaction among employees and managers at all levels, so
as to help the firm to operate as a more functional and effective team.
Benefits of Strategic Planning:

The volatility of the business environment causes many firms to adopt reactive
strategies rather than proactive ones. However, reactive strategies are typically only
viable for the short-term, even though they may require spending a significant amount of
resources and time to execute. Strategic planning helps firms prepare proactively and
address issues with a more long-term view. They enable a company to initiate influence
instead of just responding to situations.

Among the primary benefits derived from strategic planning are the following:

1. Helps formulate better strategies using a logical, systematic approach

This is often the most important benefit. Some studies show that the strategic planning
process itself makes a significant contribution to improving a company’s overall
performance, regardless of the success of a specific strategy.

2. Enhanced communication between employers and employees

Communication is crucial to the success of the strategic planning process. It is initiated

through participation and dialogue among the managers and employees, which shows
their commitment to achieving organizational goals.Strategic planning also helps
managers and employees show commitment to the organization’s goals. This is
because they know what the company is doing and the reasons behind it. Strategic
planning makes organizational goals and objectives real, and employees can more
readily understand the relationship between their performance, the company’s success,
and compensation. As a result, both employees and managers tend to become more
innovative and creative, which fosters further growth of the company.

3. Empowers individuals working in the organization

The increased dialogue and communication across all stages of the process
strengthens employees’ sense of effectiveness and importance in the company’s overall
success. For this reason, it is important for companies to decentralize the strategic
planning process by involving lower-level managers and employees throughout the