...Warehouse Warehouse is a primary link between producers and customers. It is a part of a firm's logistics system that stores products at and between point-of-origin and point-of-consumption. Besides, warehouse provides information to management on the status. Adidas uses leased warehouse. Adidas can have the advantage of short-term space rental while using it like a private warehouse (Lambert, Stock & Ellram 2006). When Adidas took over sporting brands Reebok and Rockport. They wanted to take chance of the efficiencies and synergies that could be achieved by consolidating inventory from five key brands, which are Adidas, Reebok, Taylor Made, Rockport and Ashworth. On the other hand, Adidas’s Northern European operations, who serve and lead retailers in the UK, Ireland and Benelux was split between four conventional warehouses by using different systems and processes with the overspill being handled by third parties. According to Total Logistics’ recommendation, they develop a concept for a 30,000 m^2 fully automated facility. This was implemented in just 18 months, including the implementation of a new warehouse management system. The procedures took into account the current requirements of all five brands. This bought out the new facility layout and requirements and the overarching Adidas warehouse management system requirements (Total Logistic 2014). Transportation Adidas is one of the global leaders in the sporting goods industry. However, Adidas needs transportation...
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...ECONOMICS OF INDUSTRY Companies of firms in the same industry are bound to fall along the same vertical chain, this is the chain wherein some bit of value is being added to the product at each step. Vertical integration means the firm has complete control over its inputs, production and outputs along the value chain. The different firms only differ in terms as in how many links are present in their vertical chain. Adopting vertical integration for a firms means reduction of transportation costs as common ownership means closer geographical areas, the supply chain is more coordinated, barriers to entry are there making it hard for new firms to enter the market, core competency is expanded and access to uneasy distribution channels is gained. I think it can be in a firms interest to outsource its components from competitors rather than producing in-house because (Make Vs Buy Decision) this way the firms can gain economies of scale which is a good amount of saving in costs gained by the increased level of production (the firm being a supplier) whereas in-house production doesn’t gain much economies of scale as the demand would be little. The firm becomes obedient and efficient as they must follow the rules and efficiency as is in the entire market. Buying from the market improves flexibility but some disadvantages of the buy decision are the search costs, incomplete contracting which is transaction costs- under the contracts between parties only certain remedies are covered...
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...been forced to redesign their business strategies, focusing on performance measurement, new competence and skill development, product quality improvements and more strategically oriented human resources management. Yet, this new strategic focus entailed unprecedented risks, especially as regards labor practices, environmental care and unfair competition. As multinational companies embarked on this process, multilateral agencies and global NGOs had begun to look into and report on wrongful practices by large corporations, significantly calling the attention of increasingly sensitive and aware consumers and customers. Global society was urging apparel industry players to adopt a more responsible attitude to be embraced by their entire business value chain, including vendors and outsourced suppliers. Thus, Inditex was held responsible for what went on at outsourcing shop s owned...
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...Crafting And Executive Strategy Assignment 1 Case Study # 6 Dell Inc. In 2008 : Can it overtake Hewlett – Packard as the worldwide leaders in personal computers ? Submitted to : Prof. James Farmer Submitted By : Roshni Patel Student Number : 300686000 Question 1: Dell inc. Began with a ‘winning strategy’. At this time (2012), this strategy is not used to the extent that it was once was and the company is now not the company that it was once. Did Dell’s strategy fails, did the company fail to effectively execute the strategy or did the environment changes around Dell? Evaluate the possibilities. Answer: Dell is a global company that delivers products and services in more than 190 countries and company had given employment to over 4000 employees. The company deals in enterprise computing products, monitors, printers, software and peripherals with a focus on fully integrated improved environmental performance into business. The company had gone through many ups and downs from its inception in 1984 and has to face many challenges and competitors to stay ahead in the market. Dell founded the company with simple vision and business concept that the personal computers could be built and sold directly to consumers which would eliminate the additional cost of intermediaries between the company and consumer and thus reducing the overall cost of the PCs making it cheaper than other PCs in the market. The other advantage was that it reduces the costs and risk associated with...
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...Distribution Strategy (Group D _ Session 7 _ Assignment) San Fabian (SF) - MacDowell Philippines (MP) - Paulo Remita Incorporated (PR) Problem Statement After 19 years of an established “exclusive-distribution” agreement with San Fabian; MacDowell Philippines decided to terminate the deal. MacDowell Philippines decided to take over the Wholesale role of San Fabian (SF) and would participate directly in large Commercials as well as Government Projects. Accordingly MP (MacDowell Philippines) products line will be made available to Construction Supply dealers across Philippines. MP claimed to be forced to take that step to help increasing Sales since they experienced an operation capacity around 50%. Situation Analysis As Mr. Paul Cheng _ President of SF was looking at that situation imposed by MP; he went back in time when the relationship started between both corporations in 1967 and continued since then and saw how that engagement was considered to be a “ Natural Fit “ or in other words a “ Win to Win “ situation. There were things SF wanted in MP and other things MP was missing that could be briefly explained as follows: a) SF MP * SF was missing the roofing product line * MP was the only manufacturers who accepted the “exclusive-distribution” agreement b) MP SF * SF was a growing co. with a solid, good reputation * SF didn’t carry any competing product line * SF could offer a national coverage * SF would be able to pay...
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...control from Spain, the sole logistics hub. Although 34% of Inditex’s manufacturing is outsourced to Asia, and 14% to parts of Europe including Turkey, those tend to be the more basic items. The high-fashion stuff, 49% of what it sells, is cut and finished in Spain though some sewing is done elsewhere. So this structure clearly makes sense. Long lead times and the concomitant inventories are more tolerable for basic T-shirts and such that will essentially always be carried. Labor savings from sourcing in Asia are likely more than enough to offset the added holding cost. That wouldn’t be true for products with more “fashion content” that may sell today but not tomorrow. Keeping that work in or near Spain shortens the lead time and avoid supply-demand mismatches. But how long will Zara be able to keep with this model? Particularly if the real growth opportunity is in Asia. A big question, however, is how far [Inditex] can go on growing from its home base. Now that 15% of its sales are in Asia, does it make sense to run product design and logistics just from Spain? Some clothes it has made in China are shipped to Spain and then back to shops in China. The...
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...Which type of vertical marketing system does Zara employ? List all the benefits that Zara receives by having adopted this system. Zara employs a Corporate Vertical Marketing System. Zara has managed to build a system that is controlled from a single place and that it allows it for quick response, decision and problem solving. Because Zara’s parent company Inditex owns most of the resources needed for the process of clothing design, production and distribution it is able to “control most every aspect of the supply chain, from design and production to its own worldwide distribution network” (Armstrong & Kotler). Vertical Marketing System Introduction In an organization, effective marketing strategies play an important role in boosting the performance of the business. In the integration of the corporate leaders in pursuit of their financial objectives, the creation of marketing system has been established. The creation of vertical marketing system is introduced and defined as a distributing channel in which the manufacturer, wholesaler, and retailer act as a single system. An organization that can control the product and services until it reached to the end consumers is the plain example of vertical marketing system. Apparently only few of the businesses around the world successfully managed this type of system. It may define as a difficult approach to maintain the sales and effectiveness but it serves as the strongest point of the organization to boost the various...
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...Shidler College of Business University of Hawai´i at Mānoa Vietnam MBA Program Fall 2011 BUS 632—Business Strategy Dates of Course: Oct. 20 - 29 Professor James Richardson BusAd C501f Office Phone: 956-7270 Email: jamesr@hawaii.edu Course Outline and Objectives: BUS 632 covers strategic management as an integrating paradigm for your business knowledge. The aim is to develop an understanding of the strategic challenges facing managers in competitive markets. Globalization, foreign competition, and rapidly changing technology have sharply increased the intensity of competition in most industries. We will learn how leading firms have devised strategies, structured, and managed their organizations to achieve competitive advantage in this challenging environment. Strategic management deals with uncertainty and unstructured situations. You will learn tools and concepts for putting some structure into your analysis of strategic issues. But most strategic choices require judgment. Case studies enable us to test our judgment and learn vicariously from successful and unsuccessful managers in a variety of situations. Hence, class discussion of the cases is a central part of your learning experience. Methods: We will combine cases, lectures, individual and group papers and presentations. Pre-requisites: First semester of Core. Textbook: Jay Barney, Gaining and Sustaining Competitive Advantage, Fourth Edition. Case Packet will be available. Assignments and Grading: 1. Participation: (15%)...
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...achieve world-class supply chain efficiencies targeted primarily at driving down costs. Wal-Mart isn’t just the largest retailer in the world, over the past several years it has popped in and out of the top spot on the Fortune 500 list—meaning that the firm has had revenues greater than any firm in the United States. Wal-Mart is so big that in three months it sells more than a whole year’s worth of sales at number two U.S. retailer, Home Depot.[1] At that size, it’s clear that Wal-Mart’s key source of competitive advantage is scale. But firms don’t turn into giants overnight. Wal-Mart grew in large part by leveraging information systems to an extent never before seen in the retail industry. Technology tightly coordinates the Wal-Mart value chain from tip to tail, while these systems also deliver a mineable data asset that’s unmatched in U.S. retail. To get a sense of the firm’s overall efficiencies, at the end of the prior decade a McKinsey study found that Wal-Mart was responsible for some 12 percent of the productivity gains in the entire U.S. economy.[2] The firm’s capacity as a systems innovator is so respected that many senior Wal-Mart IT executives have been snatched up for top roles at Dell, HP, Amazon, and Microsoft. And lest one think that innovation is the province of only those located in the technology hubs of Silicon Valley, Boston, and Seattle, remember that Wal-Mart is headquartered in Bentonville, Arkansas. A Data-Driven Value Chain The Wal-Mart efficiency...
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...My organization, EIS (Enterprise Information Solutions), GBS (Global Business Services) at MWV has many different vendors. MWV has many different vendors and a Global Supply Chain organization to source and support. A quick Google search should be enough to convince anyone that there many, if not a vast array, of vendor selection options out there to choose from. If you begin to focus on “current” literature you can observe that the selection techniques have sped along like Moore’s law as we hurtle into this future where ideas and projects have a shelf life and have to happen very quickly, often as a matter of survival. There is everything from simple, agile approaches to very complex mathematical and computer modeling solutions that attempt to simplify Multiple Criteria Decision Making (MCDM). The longer you look, the more you begin to realize just how complicated this subject is. MWV didn’t get all it’s vendors the same way. Vendors were evaluated in different ways, some more some less. Many different approaches or methodologies were used to evaluate the criteria. Different tools were also used. There are many different criteria that were considered or ignored. It seems like the list of criteria just grows and grows over time. Dickson (23 criterion) and Weber (10 criterion) and then Zhang introduced and summarized supplier selection criteria from publication reviews starting in 1966. . Sim, Omar Chee and Gan in A Survey on Supplier Selection Criteria...”...
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...Slide One Hello, my name is Miguel Chavez and this is my presentation on the Benefits of Outsourcing for DeVry Univeristy ENGLISH 230. The purpose of this speech is to provide a business audience a clear perspective on the benefits of outsourcing. Slide Two First, lets discuss what is outsourcing? As found on ivestopedia.com outsourcing is a practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally. It is sometimes more affordable to purchase a good from companies with comparative advantages than it is to produce the good internally. In the long-term outsourcing presents cheaper prices on consumer goods, allowing individuals as well as companies to spend money in other ways. Slide Three Many individuals are not aware of the benefits of outsourcing. As seen in this graph from publicagenda.org 69% of Americans believe that outsourcing is bad for the economy where as 17% believes it helps. Slide Four Lets look at the benefits of outsourcing. The first is Cost. In order for companies to remain competitive, they must find the easiest way to reduce costs. Lowering labor costs is just one way of doing this; also boosting efficiency will help cost reduction. “As a result of moving these support jobs oversees, a reduction in cost is seen for the company in the form of lower labor costs. This in turn will lower the cost of the goods and services to you, the consumer, and...
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...retailers. The resources for rent include its many square feet of warehouse spaces worldwide to spare computer capacity, data storage on its disk drives and software codes written to coordinate all of the operations (Cravens& Piercy). Even though skeptics have claimed that Amazon is on the path to destruction, the organizations is focused to the big price, that one day all the investments and planning will pay off. Bezo’s’ reassures, that the company has in the past been misunderstood, which is something it is comfortable with. Amazon’s ability to innovate and to stay aware of its customers’ needs and preferences will keep them at the forefront of other competitors and retailers worldwide. Amazon is re-inventing the wheel by offering value chain options to consumers, retailers and even competitors. Its strategy is that, by offering a wide range of services, and turning itself inside out to suppliers, retailers and even competitors, it will be able to access a large customer, consumer and...
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...Introduction In examining, the case study on Crocs; it displays an overview of the company’s objectives in operations to include the supply chain. This examination reveals the success behind how the company thrives in times when others are unable. Part of Crocs leading objectives and primary function is to reinvent the supply chain to provide less shortages and increase awareness and customer satisfaction. This paper will outline a brief overview of company history, Crocs two primary core competencies and in which manner do they exploit them; continued evaluation will cover vertical integration, acquisition, or product extension growth. Further discussion consists of company production and inventory as well, as how margins affect their decisions. History and a Foundation for Core Competencies Lyndon Hanson, Scott Seamans, and George Boedecker created Crocs, INC. in 2002 out of Boulder Colorado. The idea came from a trip taken by the three, where one of them had purchase a pair made from a company out of Canada. The decision to start a business selling the shoes was realized after they leased a warehouse in Florida; when sales took off, they contacted Ronald Synder a college friend who which was employed for Flextronics (electronics manufacture) in an executive position. The addition of Snyder was positive as he helped invent their supply chain strategy (Schroeder, Goldstein & Rungtusanatham, 2011). In historical industry practice, it was commonplace to build orders for...
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...losing ground as more styles, more colors, and better fit became more important to its customers. Market research showed that only 24% of women were completely satisfied with their jeans purchase, at $50 a pair they were becoming a tough sell. Levi’s responded by recognizing a need to be in closer touch with their customers. They began to open stores to sell directly to their customers (rather then trough another retailer). They also implemented new technology such as EDI to help their supply chain. Unfortunately the lag time for their products was still 8 months. Levi’s was a company that needed a way to strengthen their business. Using the value chain analysis Levi’s was a prime textbook case of a company that needed to improve its value chain in order to sustain a competitive advantage. The results of their value chain analysis are as follows: 1. Value: only 24% satisfaction rate. 2. Value stream: ROE average more then 38% lead to little improvement in their cumbersome value chain. 3. Continuous flow: 8 month lag time. 4. Pull: The customer initiated nothing, activity was driven by sales forecasts. 5. Perfection: A good ROE led management to miss opportunities in improvement. In addition, use a pull driven distribution strategy Levi’s lost big profits when retailers had to markdown their products in order to make them more appealing. Levi’s often made good on these markdowns to their retailers. Although the opening of Original Levi’s stores helped eliminate...
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...increased competition in the frozen foods market. In 1978 their market share of 60% declined to 29%. Private label competitors had gained over 21% of the frozen food market. The increase of stiff competition drove prices down and lowered profitability for Birds Eye. A huge factor in loss of profitability and market stronghold was their internal strategy. The company’s vertical integration strategy worked for in the beginning to initially strengthen their brand, but lost its performance during the 1970's and 1980's. Due to the rising costs of producing frozen foods in the 1970's, and increasing market competition, the company needed to shift to a more horizontal strategic approach. Analysis Value Chain Birds Eye value chain was the chain of activates that it was operated on. The chain of activities gave them more value to its service and its products until early late 1960’s. The primary activities for Birds Eye were inbound logistics, operations, outbound logistics, marketing...
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