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A push strategy involves using the sales force to penetrate the market. In this case, MBD should hire salesmen to convince buyers t buy their products. On the other hand, a pull strategy entails enticing customers to try a new product. It also lures customers from the substitute products by holding and rewarding them. A push strategy is normally employed in cases of low brand awareness while a pull strategy works well in cases of high brand awareness and instances where the products being pushed are pricey and customers are looking for differentiation.
MBD has been in operation for 80 years but competition mainly from nonconventional means of distribution threatened its existence. This means that MBD a loyal customer base. However, given the emergent technologies, the company cannot rely on pull strategy alone in the face of competition. It should combine both push and pull strategies to retain the old customers and reach for the new. The impact of the pull push strategy is to retain the loyal customers and creation of new customer base reliant on the new forms of distribution such as the internet.
In the face of rising competition, it is important for companies to remain close to their customers. The Question MBD should ask is which of these distribution strategies facilitate the company toreach the customer in the cmost convenient manner. Given the geographical distribution of its customer, the company should establish an online portal for the new savvy customers while maintaining the large distribution centers that it had previously used to create competitive advantage.
Establishing the online retail store will bring down the distribution costs as well as other operational costs. Inventory costs will be kept to a minimum as well as insurance premium. The opportunity cost of cash stored in inventories will also be freed.
Fewer warehouses will lead to less operational expenses. More warehouses and more decentralized operations will lead to more responsiveness to the changes in the market.
Employing an internal logistics expert should be done when the distribution chain has already been implement and certified as fit for use. The expert would be expected to manage the distribution system. An expert should also be hired if the distribution system is not complicated and can be managed by a few people under instruction from an expert.
MBD should acquire a company with logistics expertise if the distribution scale is huge and such acquisition is likely to give it a competitive edge. also, the company should acquire a logistics company if the distribution system is ver y complicated as to be managed by an in house expert.
The company can develop a strategy and outsource the distribution n system to another company if there are no available logistics companies with the needed expertise to contract or acquire. This can also be done if MBD has the capability to develop a unique distribution strategy likely to give it competitive advantage but lacks the capacity to implement it in house.
MBD can develop a strategy with a third party service provider if it lacks internal capacity to develop such strategy and has resources to implement it.
UPS relies on technology tom maintain efficiency. The company has a global data network that that provides a platform for processing international delivery packages. The network, dubbed UPSnet has communication lines and satellites to link all of the companies distribution nodes scattered across 50 countries. UPSââ‚¬â„¢s former CEO James Kelly explains that the key to success in logistics is globalism, connectivity and service.
Kelly explained that globalism refers to the ability to provide preferred standard of service to customers scattered around the world. On connectivity, Kelly noted that UPS is connected to almost all businesses and homes in the US as well as its operating markets. This connectivity allows for two way information flow between both ends of supply chain. Its only though technology that UPS makes this possible.
Beginning in 1980s, the company shifted emphasis from traditional values of reliability and efficiency to focus on the customer. To this end, UPS developed technology tools such as Maxi Ship and Total Track. Total track provided customers with tracking information for all packages sent through air or land. MaxiShip enabled customers to track the entire distribution process an generate customized reports on their deliveries. Other tools include Enhanced Tracking which enabled shippers to track packages using their own codes, Published Rate &Service Selection which enabled customers to compare UPS published rates for various services, Service Mapping which enabled customers to generate maps detailing the transit routes between various zip codes and Electronic manifesting which enables customers to generate their own tracking number to track their parcels. From the foregoing, it is evident that UPS relies heavily on technology to enhance efficiency and accuracy of its distribution chain.
Being the CEO of a new manufacturing company, I would prefer a flexible strategy in developing the companyââ‚¬â„¢s global strategy.
A flexible strategy will enable the company to take advantage of different scenario in the supply chain. I would ensure a dual sourcing model with a redundant manufacturing capacity in various markets. In all the factories, I would design flexible manufacturing capacity with equally flexible distribution chains scattered reaching the critical markets. This would make the company respond to surges in demand in the various markets while maintaining low operational costs when demand subsides. In addition, risks in one region can be mitigated by switching to other regions for supplies to sustain consumption during the interruption.
My answer would not be different if I were a CEO of an electronic firm. This is because most electronic devices are not differentiated according to markets. This in turn means that electronics can be manufactured from any particular point in the supply chain and supplied to other destinations. A flexible strategy would mitigate against the effect of supply chains disruptions in parts of the market.
This in turn means that electronics can be manufactured from any particular point in the supply chain and supplied to other destinations. A flexible strategy would mitigate against the effect of supply chains disruptions in parts of the market. My company aims at maintain the highest level of responsiveness to the needs of the market.
Supply chain manageemtn affects the way a company conforms tocustoerm requirements in that it determines a company ability to offer what the customer wants. Inability to offer what the customer wants and costs normally arise if supply is more than demand (resulting in high inventory costs) or demand is more than supply (in which case the firm suffers lost sales).
Question 5b Product strategy
With the proliferation of product options, supply chain management strategy helps firms manage supplies and predict demand. Firms know which products to specialize in to appeal to the mass market. To cope with large variety, supply chains are designed to configure products only when orders are placed. Other strategies involve accumulating larger inventories at distribution centers to saturate the market.
Question 5c Price and Brand
Efficient supply chains enable firms to develop premium brands. Premium brands are known to be reliable and therefore command premium prices. When a brand espouses qualiy and reliability thorough efficiently planned supply chain strategy, it becomes a guarantee of quality and cuts a competitive edge for the organization.
Question 5d value added services
Value added services improve profits and user experience for a companyââ‚¬â„¢s services. They also offer differentiation from the competition. An effective supply chain offers the company a chance to deliver the value added services in addition to the main products. For instance IN IBM, most revenues come from services as opposed to sale of products. A supply chain strategy that gets as close as possible to the customer is crucial to determining consumer needs. With this knowledge, is possible to tailor value added services to address such need.
Question 5e relationships and experiences
An effective supply chain management builds relationship with the customers making it more difficult for customers to switch their loyalty. For instance, Dell configures computers and supports them for large consumers, customizes them making it possible to switch to other vendors.