Logistics and Strategies, Term Paper Example

MBD should adapt push-pull strategy because balancing both strategies creates a great marketing mix that has the ability to entice a customer into taking your products because some customers will react to push strategy while others will react to pull strategy. For instance, the customers who love bargaining might respond to the tactics of pull marketing while the buyers who have social awareness might react to the push marketing.

Push Strategy

The push strategy ensures maximum use of all available distribution channels like retailers and wholesalers to push the offer up via the channels into the marketplace. Such strategy takes advantage of trade promotions activities and the sale force of the company to create consumer demand for the product hence minimizing the high costs of advertising.  Generous discounts when using the strategy are necessary requirements in achieving the goal of giving incentive to the distribution channels to promote the offer hence minimize the need for advertisements.  Push strategy employs tactics like:

Face to face or direct selling  to  the customers in showrooms ,encouraging retailer demand through  trade show promotions, efficient supply chain to ensure supply to the  retailers is  efficient ,negotiating  with retailers to stock your product, displays at the point of sale and using a Package  design that  encourages purchase

Pull Strategy

In Pull marketing, promotional and advertising strategies which are aimed at enticing the prospect to buy the product or service are developed. For example “buy one get one free” the strategy revolves around motivating customers to actively look for your brand. Tactics employed in the strategy include advertising and promotion via mass media. Managing customer relationship as well as using a word of mouth and giving Sales discounts and promotions. A combination of these two will achieve the best for the company.

The company requires an understanding of the existing market dynamics and expressly setting up customer relations functions to ensure that they are fully responsive to customer needs. This department will help them keep touch of the customer needs and hence ensure that they are always in touch with the customers and maintain their loyalty.

The best distribution strategies that the business should utilise is the direct retailer distribution strategy where the get ways of availing their products directly to consumers without having to use wholesalers and middlemen. The question that the management should ask is concerning the prevailing market conditions and the likely response that the market will have on the increased demand for the goods and services. If the company is operating in a highly competitive environment like MBD is doing, they need to ensure that they get new customers hence the need for push strategies, at the same time they need to ensure that they run customer loyalty programs that enable them to retain the existing customers hence the need for pull strategies. The functioning of these strategies depends on the ability of MBD to deliver their goods to the consumers. The use of third party logistics providers serves as a very good strategy. The impact being that they will be able to reduce the time required to avail the goods to the consumers as well as the costs incurred in this way they will be able to reduce the eventual cost of their products on the consumers.

The benefits that the company is likely to enjoy on the change in strategy is that they will be able to reach their customers faster and reduce the cost incurred on holding inventory as well as the existing costs of transportation will be highly reduced. This will hence ensure that the customers get more value for their money and hence they will stick more with MBD for their book needs.

If MBD has fewer ware houses they are likely to enjoy several advantages, these include and are not limited to the following. First, the company enjoy more ease of administration since all the units will be closely monitored and within reach of the administrative functions of the organization. The second advantage is the cost control will be easier since the functional units will be few hence easy to monitor. The third advantage is aligning the warehouses to the general strategy of the organisation as well as the mission statement. This will ensure that the few warehouses are well coordinated in terms of the levels of inventory help at any particular time as well as ensuring that they have congruence in their overall direction.

The advantage of the organisation having a decentralized administrative structure as well as many warehouses is that they will be able to utilise the varied locations to split down their operations into small manageable units. This will ensure that they can easily manage risks as well as any unforeseen incidences in these detached units. Secondly small varied warehouses make it easier to monitor movement of inventory as well as managing the reorder levels required. The place aspect of the marketing mix is requires that the customers needs are addressed at the point of sale. This implies that the many small warehouses will enhance the company’s accessibility to the people as well as ensuring that they deliver the services with more ease.

Consider a manager developing a logistics strategy. Discuss specific situations for which the best approach would be to: (20 points)

Employ internal logistics expertise.

In situations where the manager is dealing with an internal distribution network such as the transfer of raw materials or some unfinished products between the various functions of an organization. The use of internal logistics expertise serves the company well since they will be able to reach their various departments with more ease. This is likely to work very well with MBD in the distribution of materials to the various warehouses they might be having in the many parts of their markets. Similarly a company that is involved in the distribution of confidential and sensitive information in the various departments might opt to use internal logistics expertise to deliver these services as they will seek to retain the confidentiality of their information.

Acquire a company with this expertise.

When a company is involved in wide spread activities and requires to reach the people across the borders or in a wide region, they need to use external expertise to ensure that they satisfy they deliver these commodities to the consumers in good time and with the quality that the consumers demand to ensure that they remain competitive in the market as well as ensuring that their customers are satisfied with these services.

Develop a strategy, and then employ the specific suppliers to carry out well-defined portions of the strategy.

If an organization is involved in various activities that involve joint processing intra-organizational communication and eventual delivery of services of commodities to consumers, then they should use this strategy. This will ensure that they meet the part that requires them to supply these commodities to within their departments for them to carry out their responsibilities. The logistics experts then take over some portions of the responsibility and discharge them. They therefore develop a synergistic cooperation that enables them deliver on their responsibilities.

Develop the strategy with a third-party logistics provider.

Where the processes involved are multiplexed and the company does not have the capacity to handle the responsibility successfully. To achieve this, they need to manage the responsibility through a third party logistics provider who will provide the necessary network as well as the knowledge of the field that is required to make informed estimates of the costs as well as the operational requirements of the strategy.

How does technology deliver for the United Parcel Service? (20 points)

The use of mobile technology devices is a new technology adapted by the service providers to ease parcel delivery. This involves the use of tagging system to ensure that customer’s services are delivered at the convenience of both the customer and the parcel company. This service ensures that there communication and coordination between the company and the consumers.

A good example is that of SDS that was implemented using the SwifTXT. This method operates such that the person making the delivery upon getting that a customer is not present to collect the delivery leaves a card for the customer asking him to contact the company by way of text. Through this the customer upon getting the card is able to contact the company and by use of preset prompts is directed on how to either choose a more convenient time for delivery or choose an alternative location for delivery. This ensures that no time is wasted in trying to make a delivery to an unavailable customer. In other circumstances, the customer is able to provide adequate timing information to enable the delivery to be timed to coincide with the time that he is available.

The use of such modern technology will enable john make appropriate decisions on the order in which to make the deliveries and therefore be able to save on time. The use of these cards to select the manner in which the deliveries are to be made as well as the timings is vital in ensuring that the deliveries are appropriately planned. This is also important to ensure that john only makes deliveries that are pre-timed and arranged. The ability to get a live feed on the hand held device will also enable the delivery to be made at the right time and make any changes in the routes in case the need arises.

The process of strategic planning and management involves more than the profitable matching of the needs of the customer and the competencies of the firm and over the competitors. It involves integrating all tactics like focus, diversification, marketing audit, cost leadership, SWOT analysis, globalization, entrepreneurship, among others as well as related methods to adapt to and effect dynamic environment. It is clear that the present business environment is competitive and highly dynamic and therefore the strategy must be flexible and able to respond to the increasing uncertainty. The increased competition comes with globalization in which case global strategies will be affected by global competition, the convergence of global market, cost advantages as well as influenced by government and cost advantages. There is need for the organization to redefine boundaries, structure and relationship issues. Therefore in developing the global strategy the firm should aim at matching resources of the firm and its activities to adapt to the global competition.

Therefore as a CEO of a small electronics manufacturing firm I would choose a flexible strategy because with the rapid changes in the world of business comes uncertainty and therefore the need  to be more integrated, broader and with flexible plans to be able to respond to the conditions which keep on changing. The higher uncertainty is, the more flexible strategies should be crafted. This firm should therefore adapt flexible strategies which fit in the environment of uncertainty since it’s new in the global market and it’s not certain how the consumers and the market in general will respond to their products.

Impact of Supply Chain Management Decisions on Product Selection

Many organizations are being faced by increased financial responsibilities and the pressure to cut costs. The pressure is so much that they may inadvertently reverse the effectiveness of supply chain which consequently increase waste and cost instead of getting profit. The financial stress occurs due to Wall Street expectations and corporate aims once a company is publicly known at which time reporting of loss, gross margins and time costs become the main considerations when making decisions.

Often the financial responsibility stress forces to use their sourcing decisions where their dominant factor in selecting a product is the cost. This strategy turns the supply chain into a transaction process rather than a strategic process which considers the effect of a decision on the whole supply chain. Lack of optimal balance between customers and suppliers chips in such circumstances and as a result there is no harmony n reliability, cost, satisfaction of the customer and profitability.

Discuss how supply chain management decisions impact the ability to excel in certain dimensions. Specifically consider: (20 points)

Conformance to Requirements

Price and Brand

Value-Added Services

Relationships and Experiences

Focusing on the relevance of legacy sourcing and cost-cutting may seem attractive to an organization at first glance because the outcome can provide instant results. Bill of

Material (BOM) costs are successfully driven out of the cost model and gross margins are enhanced. The organization experiences quick success as seemingly profitable products are introduced to customers. However, this lack of attention to the rest of the supply chain impacts negatively overtime as quality issues, product failures, and unscheduled downtime become a consequence for the company. Imperfect interdepartmental communication within an organization may prevent the rest of the supply chain from realizing that product issues exist. Without this knowledge, there is no direction or warning to equality a specific vendor. In addition, the supply chain’s performance bonus may be based on the lower unit cost rather than the total cost of ownership. In this type of scenario, it becomes nearly impossible to maintain organizational supply chain effectiveness. Within the organization, there may be disparate factions working against each other with diametrically-opposed performance metrics; one chartered with getting the lowest cost, another with designing in benefits for product differentiation, and another whose mission is to increase sales and corporate profitability. In a situation where a low-cost supplier was chosen and product failures persist, sales may begin to discount products to maintain existing business and lure new business, which results in gross margin erosion. This causes the supply chain to drive costs down even further to compensate for the loss in sales revenue.

Third party logistics providers have become a key ingredient in most companies and rightfully so. This is especially the case in companies with a wide customer base and international business concerns. The ability of these providers to ease the strain on resources and increase speed of delivery and reduce lead time is what makes them the more attractive. This is more so due to the competitive advantage they give the user. Third party logistics providers have also made in strides in understanding the customer’s needs and at the same time developing models that increase their efficacy and versatility in customer service. This has therefore made them the more attractive. If a company is to develop a lean model, reduce garbage and increase efficiency, then third party logistics providers is the way to go