The Japanese Market for Yukon Berry Farms

Outline

Selling Haskap Berries to Japanese distributor

• Foreign markets

1. Indirect approach to foreign markets
2. Risk reduction
3. Growth opportunity
4. Japanese culture
5. Low foreign investment
6. Japanese distributors

• Pre-visits before making a business deal

1. Distributors visit
2. Understanding the product
3. Face to face discussion on the deal
4. Yukon Farm’s president visit
5. Clarity on expectations
6. Identifying with the food processing process

Page 4 assignment questions

1. When companies have made decisions to enter an international market, they are faced with different options or approaches, which they are to choose from in carrying out their options. However, it is important to note that most of the agricultural farms that deal with raw products, they often use agents or rather distributors in an indirect approach. Though there is less control while using an indirect approach, it has one advantage as it reduces on risks and hence the Yukon berry Farm will have an opportunity to explore on the growth options should they decide to make a deal with the Japanese investor (Blenkhorn, et al, 2005).
2. It is important for the Yukon Berry Farm’s president to understand that there are only a few foreign companies those start-up businesses in Japan since they are afraid of the Japanese business culture. However, most of the foreign companies only enter the Japanese market through a distributor. Therefore, it is very inherent for Yukon Berry farm to consider entering a business deal with the distributor rather than selling their goods directly to the consumers (Blenkhorn, et al, 2005).
3. The Japanese distributor will have to consult some of the other stakeholders in his company as this will help the entire team to work together in identifying values, priorities, and objectives of the distribution plan initiative.
4. It is quite important for the distributor to visit the farm so that he can be able to actually see the berries before he can enter into a deal. This will allow the distributor to see the berries and if it is fitting to his expectation then it means that he will agree to the business deal. Mid-June is the best season to invite the distributor as this is the season for early ripening of the berries.
5. However, the president ought to stick to the agenda of the visit only to the farm and thus should not organize tourist activities for the distributor.
6. Similarly, it is important for Yukon Berry Farm’s president to make an appointment with the Japan distributor so as to visit the food processing company so as to be able to see how the berries are packaged and handled. This will of great importance as it will enhance the president to identify with how they are required to present their berries to the distributor so as to have a smooth business working relation.
7. The president should organize for an interpreter just in case there is a language barrier between the distributor and the president.
8. The farm should plan on making their first sale after four months from the signing of the business deal since the berries will be ready by mid June.
9. After the visit, the two parties will be in a position to be clear about their expectations and hence Mr. Haskap should expect a sale after the first visit.
10. The company should diversify their sales to varying customers as this will reduce the risks and increase on sales.

Business reply

Mr. Yoshimoto

Company Representative,

Shokuhin Corporation,

474 Miyagoka,

Japan,

12/02/2018.

It is with great pleasure; we would like to inform you that we have received your letter in relation to an interest on distributing our berries. Having gone through the business deal that you had put forth, we are ready to enter into a business relationship with you. We are inviting you for a pre-visit at our farm as from mid-June so as to further discussion on the business deal. Please let us know a suitable time for having this visit.

Sincerely,

Haskap

President  

Appendix

Haskap nutritional value and Yukon’s tourist attractions

Yukon farm is the largest organic berry producers.  Yukon Berry Farm’s were launched in the year 2004. The company’s mission is to offer healthy, sustainable and organic berries in Yukon. The farm comprises of forty acres that support the growth of 4000 berry plants which produce at least 400,000 pounds of haskap berries per season. Haskap berry is produced early in the summer and thus they are readily available at the end of the summer. Haskap berries for processing are sold at a price of $1.5 per kilogram (Wohlgemuth, 2012). We offer the Haskap berries in three forms, jam, fresh or frozen berries but there are still other forms that are underway. The farm became a certified organic farm in April 2016 and there are certificates in support of this. Apart from farming, the farm offers education to farmers on sustainable farming (Wohlgemuth, 2012).

            Haskap berries have more antioxidants than the blueberries and thus are regarded as very nutritious. Their nutritional value has resulted to their high demands from people across the globe and more so in Canada. They have a high level of potassium that amounts to 190mg, calcium that amounts to about 38mg, phosphorous that amounts to 25mg, 0.6mg of iron. It also contains some other nutrition such as vitamin A (130mg), vitamin C (44mg), vitamin E (1.1 mg) and energy of about 53kcal (Wohlgemuth, 2012).

Yukon has numerous tourists’ attractions and numerous tourist activities within the Yukon Territory. There are wilderness parks where tourists can hike, bicycle ride or even horse ride as they enjoy the beautiful scenery of the land. The land offers unique sightseeing lands with a range of amazing wildlife and mostly during spring. It has an excellent highway that offers stunning views of the undulating and rugged terrain. Yukon River offers tourists a superb opportunity to canoe and to whitewater raft. The environment in Yukon is just like none other. 

References

Blenkhorn, D. L., & Fleisher, C. S. (2005). Competitive Intelligence and Global Business. Westport, CT: Praeger.

Wohlgemuth, D. (2012). Stimulating Commercial Berry Production in the NWT Capital Region.

How Do Specialized Personal Incentives Enhance Sales Performance

According to the article by Patil and Syam, 2018, asserts that specialized personal incentives are organizationally influential interventions since they comprise of state determined effects. That is, those salespersons who earn SPIs within a given time are at a higher chance of earning the SPIs in the next given time as compared to those who do not. They thus conclude that earning of SPIs by salespeople are important as they have a double effect which involves, a direct positive link with better sales performance within the current time and an indirect positive connection to SPIs within the next given time and ultimately improved sales performance even in the next period (Patil  & Syam, (2017).

The article involves the building of analytical models as well as the empirical analyses of the data from the field. The article is all about a research on the sales force organization and it seeks to cover most favorable sales compensation plans taking account of the setting sales quotas and the designing of sales competition. The article also focuses on the analytics concerned with sales pipeline management, problems facing team selling and concerns within versus outside sales. One of the strengths of this article is the fact that it strongly emphasizes the use of an optimal based analytical method, using data so as to address the various issues in sales force management. On the other hand, the weakness of this article is that it fails to clarify the reason as to why the high performing sales personnel’s profited from earning from the SPI while the high performing sales personnel did not profit that much when the quarterly quotas were used. This leaves the readers at a dark state where the question of why is left unanswered. However, the article recommends business managers to implement an intervention that encompasses an increase in cash incentives connected with SPIs earning.

References

Patil, A  & Syam N, (2017), “How do Specialized Personal Incentives Enhance Sales Performance? The Benefits of Steady Sales Growth”, Journal of Marketing.

Nestle Ice Cream in Cuba

Executive Summary

Nestle became the leading producer of consumer products in the world when ‘Anglo-Swiss Condensed Milk Company’ was established.  Since this period, the company has been doing well in terms of employees, annual sales, market capitalization and report on quality. Since 1866-1930, the company has gained a rapid innovation, it expanded internationally in countries like U.S, EU, China and others and   it established product diversification which accelerated the corporate growth (Walker & Bell, 1).  However, after few decades, the Cuban government developed economic policies   and ‘Soviet-style’ which controlled the foreign investment and this led to a dramatic change to multinational companies. Note that the Cuban government was interested with   developing a national economic sovereignty and   this political and economic decision among other factors led to the collapse of the Soviet Union. The collapse led to economic crisis which affected the Nestlé Company. For example, the Castrol regime regulated and discouraged foreign investment as well as joint ventures. Even though Raul Castrol created economic reforms for foreign investment, the new policies affected labor and marketing making Nestlé’s foreign investment to lag behind (Walker & Bell, 1).   

 Due to the challenging environment in the foreign investment, Nestle decided to start an ice cream business in the Cuban market and for this reason, the company made an agreement with the Castro regime in 1990 (Walker & Bell, 2). After a long period of government approval process, the new Nestle-Coralac company was established in Havana.  However, the company met difficulties such as supply shortage and government regulation which hindered partnership between the company and farmers. The company also faced marketing challenges since Coppelia was a well-known ice cream parlor which sold ice creams at low price and there was no mass media communication to advertise the new products (Walker & Bell, 2).  Other challenge was that the purchasing power of consumers was poor and they could not be in a position to buy CUC-dominated goods.  To address these challenges, Netle-Coralac created a marketing strategy of providing high-quality products to tourists and few Cubans with high purchasing power.  

Later, the Obama administration decided to create diplomatic relations and currency unification   and both opened opportunities and challenges.  For example, Nestle-Coralac Company   could trade with U.S markets and make a large share. On the other hand, currency unification could open market opportunities and on the hand bring inflationary pressure and competition in local markets (Walker & Bell, 7).  At this point,  the company should now focus on making strategies that will help enjoy a competitive advantage in trade liberalization and more importantly implemented strategies as well as solutions to address challenges in currency unionization. The rationale behind the decision of making  business strategies for the matter at hand is because;  trade liberalization will create a path for economic development  through export and import and currency unification  will maximize efficiency gains, the company will  also gain an exchange rate stability  and stay away from competitive devaluations(Walker & Bell, 7). Thus, the role of strategic decision is to plan on how to set goals and achieve objectives.

Question 1

In Cuba, one major characteristic of the operating environment which the foreign firms should know is that it is controlled by government regulations. This means that business ventures need approval from the government and the venture  has a fixed time period which means that  the contract  will come to an end  unless the joint agreement decide  to renew the contract.  The economic and  financial system challenges  were rooted from  the collapse of Soviet Union and the foreign direct investment  is viewed  as  a way to  acquisition of technology, diversification and  new  resources of management(Walker & Bell, 1).   An apparent character trait is that it has a selective framework toward foreign investment and it does not show any effort in creating an attractive environment   but rather, the government focuses on making foreign investment a way of strengthening and improving the socialist system. For this reason, the movement has strict consideration on foreign investment to ensure that investment will bring technology, capital and expand the markets (Walker & Bell, 1).  

Other characteristic of the operating environment is that Cuba has limited financial information based on performance of foreign firms. The government   does not show concern on finding reliable information based on foreign investment activities and this hinders a comprehensive financial analysis.  Thus, foreign investors should know that public disclosure of financial data especially on statistics for international economics, annually, economic cycle in different sectors and countries data is limited(Walker & Bell, 7). The limited data offered is an indication that the Cuban government does not value or see the strategic importance of foreign investment.  In other words, failure of the government to update overall figure hinder a comprehensive analysis of presenting the real value of foreign investment. Note that during Cuban Revolution, the government implemented the ‘Soviet-style’ which is based on centralized decision on investment, State ownership and a centralized economic planning.  As a result, the ‘Soviet-Style’ led to economic reforms which made many joint ventures and international players to cease from foreign operations (Walker & Bell, 3).  Foreign investors recognized that   there is a big difference on goals of globalization as Cuban government had a ‘resource-seeking investment’ while foreign investors had a ‘market –seeking investment’ (Walker & Bell, 4).  Rather than allowing foreign investors to control ownership and have a direct control on the venture, the Cuban government   shows a dominating power which hinders economic development of foreign countries.

            Other characteristic  is that the currency system   in Cuba  affects labor and marketing  in that  foreign investors  use the governmental   labor agencies to  employ workers  and the end results are that  the business operations are controlled by the bureaucracy in terms of  price control, security,  income tax,  export controls among other regulations (Walker & Bell, 7).  A point to note is that the Cuban government operates businesses with its own needs and interests with aim of increasing productivity and developing the economy.  On currency system, the Cuban government use Convertible peso and Cuban peso in business operations. For example, consumers purchases products with Convertible peso while Cubans or employees receive the payment through Cuban peso. Note that foreign firm pays workers with Convertible peso while the Cuban government pays them with Cuban peso-this is an indication that Cuba uses the U.S dollar in running State enterprises. Generally, foreign investors should know that the   Cuba has a centralized economy with excessive bureaucracy.  On top of that, Cuban government is selective since it needs investors who will boost growth and bring economic development (Walker & Bell, 7).

Question 2

 It is worth saying that the ice cream business has been successful since the implementation of business strategy. Even though the Nestle-Coralac  initially faced challenges  due to  shortage of suppliers, governmental regulation, low purchasing power  and the existence  of other  business, it managed to  overcome all these challenges and  gained a cultural legacy  due to its quality products.  First, the strategy that helped the company to enjoy a higher profit is that of manufacturing a high-quality ice crime and finding a target group.  In this case, the company concentrated on tourist and Cubans who had a high power and who could be in a position of purchasing CUC-denominated products.  Under this strategy, the company focused on simplification and standardization of products (Walker & Bell, 6). On simplification, it ceased from manufacturing unnecessary varieties and retained only chocolate and strawberry. It also   reduced the size and parked the products on half-liter containers. On standardization, Nestle-Coralac ensured a consistent stocking of the flavors and local distribution to retain locations, restaurants and all tourist destinations. It also ensured that products were well organized and presented a high-quality image. Since mass media communication was a challenge, the company advertised the products in-store promotion where they created brand awareness and many consumers recognized the brand. Given that the company used CUCs in selling the products, the typical retail price was $1.50-$2.00 which most Cubans could not afford (Walker & Bell, 6).  Note that the company targeted tourists and Cubans with a high purchasing power and these consumers made the company to be highly recognized by 2012. The products were ranked as the thirteenth foreign brand where the recognition was 60% compared with Coppelia which was 73%.  Even  though the government did not offer a comprehensive  financial  analysis on global ice cream business  or on foreign firms operating  in Cuba,  InsideSources reported  an annual report  in 2014  and showed that  the trade operating profits was 15.5% while  U.S business unit and  global crime business were 18.8% and 16.4% respectively.  The total   profit margin was estimated to be 15% (Walker & Bell, 6). This means that the ice cream business was a success and the higher profitable was influenced by the business strategy.

Question 3

With the current market position and potential changes on the horizon, that is, currency unification and diplomatic relations, Nestle need a strategic planning based on critical success factor-setting goals and objectives and strategies to achieve them- and future scenario planning-analysis future circumstances and environments , factors for critical uncertainties  such as social and political forces and  set strategies  to address the uncertainties which may affect the organization operations (Walker & Bell, 7). Generally, for Nestle to position it’s for future success, it should set a strategic planning. For example, it should focus on typical strategic planning-conduct organization analysis on present situation and plan for the desired future and how it will achieve success. In this case, the company should think of two things, that is, its current success (foreign food brand), the changes on currency unification and diplomatic relations. On diplomatic relation, the company should strengthen the commercial affairs with U.S and create strong state-to-state relations. With diplomatic relations and currency unification, it means that it should set strategies to achieve a success foreign trade, be ready to create import-export relation, and trade agreement, build a strong trade co-operation and strengthen the bilateral relations. Given that the Cuban government has plans to unify the currency system, the new system will allow effective business operation since there will an institutional framework controlling the currency of transaction in the markets and prices (Walker & Bell, 7). The currency system will also open opportunities in terms of maintaining economic equilibrium, stimulate foreign direct investment, minimize the fiscal deficit and use the currency unification to set national prices. However, to find a position for future success, Nestle should be aware of possible challenges such as price distortion which as a result will affect the prices of internal markets in international market and corporate balances (Walker & Bell, 7).

 Generally, in order to have a strong position for future success, Nestle should retain the strategy it selected for local markets on marketing mix. This has to do with the price-the company should focus on the selected group of consumers, that is, tourists and Cubans with a higher purchasing power. It should strive to meet the needs and desires of the target group since these consumers are interested with the products (Walker & Bell, 6). In addition, it should maintain its pricing method, that is, same price and consistent pricing and be ready to adjust the prices in case of change in the market condition. To maximize output, the company should maintain the exclusive distribution of products so that the target customers can get the products at the respective stores and more importantly, build brand loyalty (Walker & Bell, 6).  On promotion, the company should promote the products in in-store promotion until the government allows the use of commercial advertising.

Question 4

 There are prospects for future investment and economic growth in Cuba in that the country has economic policy designed to reform the economic model. So far, there is  reformation  on  growth  of small-scale business, authorization of non-state cooperatives,,  cut of subsidies  that does not bring  a sustainable development,  legalization of  economic freedom in terms of  firms autonomy in making investment decisions,  legalization of mass communication and among other structural reforms(Walker & Bell, 6). The economic reforms  will  create path for  foreign investment and economic development  since the government  is ready to create  a well-functioning economy by setting  fair rules to  all firms including  joint ventures, private, public and  other corporations. Also note that the diplomatic relation has allowed U.S firms to build telecommunications infrastructure and this show that the Cuban govrement is willing to bring economic development and to cooperate with foreign investors in achieving the goals (Walker & Bell, 7).

 Generally, potential for prosperity is strengthened by the relationship between Cuba and U.S and their efforts in forming political and economic ties.  The relation will allow the two to solve the structural issues and more importantly eliminate the trade embargo which affect effective business operations between U.S and Cuba (Walker & Bell, 7). Cuba alone may not be in a position to tackle the exiting political and economic issues but on friendly terms, U.S will neutralize the condition and ensure that Cuba build a new economic structure. Thus, future investment and development are influenced by the diplomatic ties aimed at re-establishing the diplomatic relationship. Even though the economic growth will be on long-term period due to the historical imbalances and economic isolation, Cuba and U.S have plans to unify the currency and end the trade embargo. This is an indication that there is a prospect for growth as the diplomatic relation will first solve all the underlying problems such as structural problems on monetary policy, poor capital stock, reform the manufacturing environment among other issues that hinder economic growth (Walker & Bell, 7).

Work cited

Walker Russell & Bell Kyle. Nestle Ice Cream in Cuba.  Kellog School of Management. 2018

Week 8: Final Case Analysis

1

There are various constraints or limitations that would hinder a successful implementation of change in the structure and culture of the organization. The limiting factors include policies, cultural and market constraints that would be a big hindrance to the intended change aimed at improving the performance of the organization.  The policies constraints in GE Electrical were seen in the way systems were run beginning with the planning and budgeting processes. Welch needed to bring about change that would ensure that the form became more lean and agile, so that an effective de-staffing process would be achieved in all the big groups’ companies headquarters.  It was important to achieve a significant reduction of staff so that the remaining staff could strategically be planned for.  The limitations came in terms of dissatisfaction associated with downsiszing, de-layering and de-staffing m which resulted restructuring of the organization to the point of earning Welch a nickname – Neutron Jack.  Policy constraints is seen when a change on how things should be done, including procedures and regulations is being implemented (Woeppel, 2016). Such changes can results to great resistance and dislike among individuals entrusted with implementing it.  Policy constrain mostly arises from policies that are being established or the older ones which are widely accepted in the organization (Woeppel, 2016). 

Another constraint involves the culture shock that was experienced after the restructuring and organizational culture change that was aimed at boosting productivity through downsizing and removing bureaucracy.  Change is introduced with an aim of driving growth and future success and should be welcomed as an opportunity to more efficiency and creation of new successes (Giorgi, Lockwood & Glynn, 2015).  However, the management exhaustion relating to culture shock in GE Electrical made the efforts by Welch and his team to move past the introduction of change.

 Market constraints involve limitations that the management has no control over since it involves external forces, and a leader has to adapt to these changes (Woeppel, 2016).  The internationalization efforts pursued by Welch after building a solid base at home were faced with a changing global market that required new strategies that would ensure sustained competitiveness.  This required better cultural initiatives and an improved global that would be implemented though realigning skills and mindsets of the workforce. This resulted to rumblings among those who felt that they were being overworked in an environment that was new and demanding, which increased the distrust that had arisen from the major layoffs. The limitation arose from the need to redefine the implicit contract that the firm had with the workers.  

2

 The major problem in the case was to find a leader who would drive successful organizational performance similar to the one achieved by Reg Jones, the retired manager. The coming of Welch into the leadership of the organization heralded new chapter where restructuring of the organization, change in organizational culture and internationalization were give much attention. For the solution to bear the intended results, the restricting process needed to be done in way that the performance of the organization is not disrupted.  An effective restructuring should ensure that the process is not expensive and does not lead to new problems similar to the ones being solved. This is because it takes long for the staff to adapt to new the introduced structures and this may result to dissatisfaction.  This requires a system that is based on strategic planning and operations management in way that performance is measured and rewarded (Griffin, Phillips & Gully, 2016). Progress of the new structures and policies established has to be measured against a set goal. The restructuring in GE Electricals required new staffing and budgeting processes, and re-organization of new business operations to suite the changing and competitive global market environment.  In the course of business operations, the use of a balanced scorecard would provide a framework that could align the new structure and the strategy of the organization (Koi-Akrofi, 2017).  The various CEOs of General electrical business units would use the toll as the driver for performance of their units.  This means that managers would be able to communicate to the overall leader and their staffs about the cause-effect relationship that provide the desired value proposition for their units.  The use of scorecard could serves as an essential toll in the implementation and monitoring of the strategy of every business unit (Koi-Akrofi, 2017).  

In addition, a secondary problem involved the need for culture change in the organization would require the leader to align the interest of the organization and those of employees so as to reduce dissatisfaction and rumbling from the feeling of being overworked.  The manager should avoid creation of unfeasible roles that would elicit resistance from employees who are the implementers. A change in organizational culture is normally a huge undertaking and will requires all tools for changing people mind to be integrated (Griffin, Phillips  & Gully, 2016). The change in culture should not only focus on firm’s performance but also on the growth and learning perspective.  This involves development of human capital through activities such as training and leadership development and even knowledge management. This will result in a culture where employees will feel engaged.

 The secondary problem involved redesigning processes so that the required efficiency levels are attained since inefficiencies would lead to losses due to poor crafting and low quality level within the firm. The inefficiencies lead to reduced morale among employees who felt overstretched. The introduction of Six Sigma strategy based on an efficient program was supposed to solve the problem.  The combination of lean efforts and Six Sigma would result to improved bottom –line results in the various operations of the company.  While lean efforts will lead to reduction in wastes and hence, costs, Six Sigma would be oriented towards the improvement of quality of products by constantly minimizing the flaws that arise out of production processes (Jones, 2014).

3

 The participative leadership explains the kind of leadership employed by Welch in his endeavor to restructure the organizational and change the organizational culture. The leadership style adopted Welch involved a lot of consultation and engagement with managers in various business units and employees. He developed a team that would help in change implementation, and with which he held long discussions on challenges arising from the changes introduced at various business units. The employees were also provided by an opportunity in which they could air openly speak their minds on how the business would be conducted more effectively.  Participative leadership seeks the involvement of others in decision making process including stakeholders and the subordinates (Western, 2013).

 Two major qualities that defined Welch’s leadership are vision and courage.  This is seen in his unwavering focus on the issue that mattered most for the organization remain competitive to in the change global environment.  The focus was a new organizational structure that emphasized on the performing business units and driving them to achieve the goal of internationalization. Courage is one quality that enabled the leader to take bold steps in restructuring the whole organization.  Courageous leaders have to take risks that are perceived as going against the grains of the organization (Western, 2013).  Servant leadership that is a major style that Welch would have followed in bringing required change in GE Electricals.  The primary focus of servant leadership is the well-being and growth of others and starts through a natural feeing that a person wants to be a servant and the choices to lead (Focht  & Ponton, 2015).

References

Griffin, R. W., Phillips, J. M., & Gully, S. M. (2016). Organizational Behavior: Managing People and Organizations. Mason, OH: Cengage Learning.

Focht, A., & Ponton, M. (2015). Identifying primary characteristics of servant leadership: Delphi study. International Journal of Leadership Studies, 9(1).

 Giorgi, S., Lockwood, C., & Glynn, M. A. (2015). The many faces of culture: Making sense of 30 years of research on culture in organization studies. The academy of management annals, 9(1), 1-54.

 Woeppel, M. (2016). Manufacturer's guide to implementing the theory of constraints. CRC Press.  148

 Koi-Akrofi, G. Y. (2017). ORGANIZATIONAL PERFORMANCE IMPROVEMENT USING THE BALANCED SCORECARD APPROACH: THE CASE OF AN ACQUIRED TELECOMS COMPANY. International Journal of Innovation and Applied Studies, 20(3), 850.

 Western, S. (2013). Leadership: A critical text. 34-37

Jones, E. (2014). Quality management for organizations using lean six sigma techniques. CRC press. 41-43

Fallacies and Errors in Sound Reasoning

 False authority in advertisement is used by many companies to attract the buyers and increase the amount of revenue.  False authority is when the company’s spokesperson in the advisement   acts like an expert in particular but in real sense, the spokesperson is not an expert on the things being advertised.  The spokesperson acts as marketing tool to attract customers.  The opinion which the celebrity offers makes customer like the product as he or she behaves as an expert in something.  For example, “Ellen DeGeneres's Covergirl Commerical” is an advisement with false authority fallacy (Tong, 2015).   Ellen DeGeneres acts as a spokesperson and   attracts the intended audiences by showing them that   she is old but her skin is flawless as she uses ‘Simply Ageless Foundation’. The advertisers used the fallacy in the ad to capture the attention of the audiences and allow them see the benefits of using ‘Simple Ageless Foundation’ which gives a younger look (Tong, 2015).  The fallacy was not used effectively in that the adverse underrates the companies that sell ‘liquid foundation’ and says that the foundation makes someone look like an apricot or older.  Again, there is no evidence or true credentials for this but   a conclusion is made   with an aim of making false beliefs.  If I were an advertiser, I could show evidence that women who use liquid foundation have wrinkles and lines on their faces so that they audience can see the difference (Tong, 2015).

Appeal to ignorance: in appeal to ignorance, a fallacy is made when the spokesman makes a statement which cannot be proven true or false. Due to lack of evidence, audiences tend to rely on the conclusion that something is true or false as it is initially stated. For example, in ‘Alec in Huluwood’ advisement, Alec Baldwin advertises Hulu websites by stating that ‘TV will rot your brain’ (MCCARTHY, 2009).  The advertiser used this fallacy to allow the television audiences’ shift from TV to Hulu.  This fallacy was not effective because there is no evidence that TV rots the brain. As an advertiser, I could offer substantial premises and real evidence to allow the audiences understand how TV affects the brain.

References

MCCARTHY C. (2009). Hulu: We're evil, and proud of it. Retrieved from:

https://www.cnet.com/news/hulu-were-evil-and-proud-of-it/

Tong Emily. (2015). Ellen DeGeneres's Covergirl Commerical. Retrieved from:

http://aplac7thperiod.blogspot.co.ke/2015/01/covergirl-commericalemily-tong.html

Retirement case study

Question 1

List of twelve sources that be created to bring in clients

1. Online platforms such as social media i.e. Facebook and twitter. Most changing trends can easily be captured in social media platforms. This gives the sales manager a chance adjust according to ideas common in the public domain.
2. Printed media i.e. newspapers and monthly magazines. Print Media will spread the word faster and to various people and entities.
3. Consultations with other experts familiar with the field. Experts have the knowledge and experience on how to capture clients. In addition, they can bring in more clients.
4. Getting into contact with potential customers through phone calls and by sending emails
5. Through trading show exhibits that lecture people on all levels of CCRC
6. Proving free services and resources will attract potential customers. The public will be more acquainted with the services offered and the charges also.
7. Using the best skilled personnel to develop trustworthiness and potential customers.
8. Advertise in the appropriate media that will easily attract customers
9. Phone directories contain contact and addresses of potential clients.
10. Public relationships create social networks that in turn can be used to 1identify clients.
11. Giving free samples that will encourage clients to return to the business entity.
12. Offering competitive prices that will appeal to the market in general. (Armon, 2007).

Question 2

A checklist that shows clients how it handles social life of the patient and how it promotes other relationships within the institution. The checklist will be ticked in accordance to what the client wants.

A dementia checklist of a patient whose condition is worsening

Part 2

CASE 1

Steps that can be taken to solve the problem

The first and obvious step that one can take to solve the issue between Mark and Harold, is to call a meeting that will involve a third party if necessary. Secondly allow both of them to air out their issues from their own perspectives .This will enable one to get details. If the Harold’s complains hold water, gain his trust and take action by either making Mark admit he was wrong or by giving Harold an alternative staff member to assist him. By doing this all the parties will be satisfied and the conflict will be solved.

CASE 2

The first step is ensuring that a notice is written to the one hundred and twenty five clients informing them of the inconvenience that will be caused by the breakdown of the two elevators. Ensure they are aware of the computer malfunction .After revealing information on the matter, caution the residents to ensure they take great care of themselves as they use the elevators, in case the elevators develop a similar problem. Finally give a date when the performance of the elevators will be back to normal operation.

CASE3

Evacuation procedures

In most scenarios, the evacuation procedure is simultaneous in case of a fire. This actually means that everyone in that premise will respond based on the fire signs and warning signs. Then, they will escape the fire by the means available in the premise to avoid any causality or injury. A simultaneous procedure is initiated by an alarm installed in the building’s warning system. (Bernardini, 2017).

Another alternative involves coming up with an impromptu evacuation procedure to allow individuals who are not in direct danger to slow down the evacuation. It is vital to evacuate people who are in immediate danger first then the rest can follow. This can be done by evacuating the people on the floor that has fire. The other floors can then be evacuated each at a time  to ensure safety and no one is left out in the building .Necessary amenities can be given  outside after all the residents are safe from harm. (Bernardini, 2017).

After evacuation the residents can be taken to a defense location sector of the building. This room ensures that medical needs of any injured individual is taken care. If there is no defense section, injured residents can be rushed to the hospital to seek immediate medical attention or any other assistance that they may need. (Bernardini, 2017).

References

Armon, R. Y. (2007). Leading the sales force: A dynamic management process. Cambridge: Cambridge University

Bernardini, G. (2017). Fire Safety of Historical Buildings: Traditional Versus Innovative “Behavioral Design” Solutions by Using Way finding Systems

Template for Report

Introduction of the Idea

Instead of streetlights vehicles can transition to the use of some green glowing lines that lights the boundaries of roads similar to a landing airstrip during the night which can best be categorized as the future of the highway (Stinson, 2014). In that, the project is the striving vision of changing impassive infrastructure with innovative roads that create a direct communication with roads drivers directly. As the vehicles become more innovative then the infrastructure should getter smarter to support such developments. The road sector has remained to be among the most conservative industries for decades with less innovation taking place not because it is not possible but based on hesitation that is fueled by uncertainties. The glowing lines will not only facilitate better grounds for infrastructural innovation but also result in cost and energy saving.

Background of Work

Market or Technology Pull

The glowing lines product is market pull opportunity. In this context, the glowing lines are a market pull rather than a technology push product because they are based on solving the energy and cost issues in the market. It is evident that it is through market research that the issues have been identified which therefore shows that the product has been created based on the existing demands in the market. In that technology, push can best be described as the situation where research and development with respect to the new form of technology lead to the rise of new products (Fischer, 2011). On the other hand, market pull describes the necessity of a fresh product to be part of a solution to the existing problems as experienced in the marketplace in general. This need is established through relying on market research. In that with the development of technology and the need to utilize more energy and cost efficient products the roads infrastructure is not an exception (Fischer, 2011). Consumers and the automobiles companies are mainly focused on more fuel and cost-saving products and this should be supported by the roads that the vehicles utilize.

The problem that is related to replacing streetlights with luminescent lines has evolved from the market. In that, the government spends too much in supporting and maintaining the lights. As communities spend much on electricity the application of green lighting lines can act an innovative solution to the issue that will lead to saving money, conserving the environment and reducing the number of accidents on the roads during foggy days.

How have you worked on the idea?

The idea was mainly worked on through the use of research design and trend analysis and available statistics in the sector. In that, the research design was accomplished through the utilization of personas and consumers journey in order to identify the need for the products. Based on the existing statistics it was established that maintaining streetlights is expensive and energy consuming which affects individuals financially.

Market Analysis

The general target consumers for the products are government and the public. In that, they are the most affected by the rising costs in regard to the maintenance of streetlights. In addition, the solution cannot be adopted without engaging the government as the primary funder while the public is involved in funding and the use of roads. The potential competitors include the companies that are involved in the development of solar fueled lights and electric lights both on the national and global market. This is because the market is comprised of some of the most established companies.

Novelty – Roger’s Model

Based on the originality of the innovation the diffusion will be a rapid one. In that, the product will begin to be adopted by innovators who are individuals interested in technology adoption first based on their interest with regard to having fresh thoughts. In that this categories those that are highly willing to take given risks even though little has been done to lure them (Sideridis, 2010). On the other hand, the early adopters are those that mainly embrace any transformative roles and need no information to be convinced. On the other hand, early adopters will not embrace the ideas prior to the average individuals given that they are interested in getting evidence to understand that the technology is operational and they are mainly appealed by successful reviews. The late majority only seek to embrace ideas after being tried by most individuals and need to understand how the adoption was done and the associated success. For laggards, this group is made of conservative persons and are not easy to lure as they wait for the adoption and the resulting statistics for review (Mlecnik, 2013).

Possible Business Model

Mission

The main objective of the business is to generate profit. In that, based on research the business has proved to be a feasible one that is fully supported by technology and innovation. However, in order to be established in the market, more promotion should be conducted to increase sales and in turn generate more profit.

Revenue Stream

Money will mainly be generated by selling the product to the government which involves focusing on contracts. In that, if the company is given the contracts it can higher individuals to accomplish the tasks which will, in turn, result in good marketing and financial gains.

Application of Teece’s strategy Model

Teece Strategy Model is mainly objected to commercializing the developed thoughts in the quest of winning the started operations while decreasing existing opportunities for duplication by competitors (Teece, 2008). In that in the case of replacing streetlights with glowing lines, there is a need to utilize several complementary assets such as brand name, strategic alliances, distribution, promotion abilities and building strong relationships with consumers through asserting on quality. In that, the use of these assets will be essential in differentiating the product with all the existing competitors. The business has the ability to get into the market on its own based on the associated benefits and the fact that it adheres to innovation in order to compete adequately with other companies. Most of the companies in the market are conventionally based which implies that they have not yet adopted technology and thus their products have failed to offer cost and environmental solutions (Teece, 2008). However, based on the needed capital to support operations as well as promoting the product fully the business can get into partnership with an already established firm so that it can access the market at ease and gain a significant share with the shortest time possible as it is likely to make substantial revenue.

What is your next Step?

The next step is to study the market and understand the feasibility of the products demand, the possible competition, barriers and different approaches that can best be applied in creating business efficiency both in the local and international market. In other words, the next focus is to understand how to strategically place the product on the market.

References

Christensen, B. J., & In Kowalczyk, C. (2017). Globalization: Strategies and effects. Springer.

Fischer, T. (2011). Managing Value Capture: Empirical Analyses of Managerial Challenges in Capturing Value. Wiesbaden: Gabler.

Gerybadze, A. (2010). Innovation and international corporate growth. Heidelberg: Springer.

Hockenos, P. (2013). Street Smarts: From Holland, Bright Ideas for Highways. Retrieved from http://www.nytimes.com/2013/04/28/automobiles/from-holland-bright-ideas-for-highways.html

Locke, R. M., & Wellhausen, R. L. (2014). Production in the innovation economy. MIT press.

Mlecnik, E. (2013). Innovation development for highly energy-efficient housing: opportunities and challenges related to the adoption of passive houses. Amsterdam, [Delft University Press].

Sideridis, A. B., & International Conference on E-Democracy. (2010). Next generation society: Technological and legal issues ; third international conference, e-democracy 2009, Athens, Greece, September 23-25, 2009 ; revised selected papers. Berlin: Springer.

Stinson, E. (2014). Awesome Glowing Roads That Could Be the Highways of the Future. Retrieved from https://www.wired.com/2014/11/awesome-glowing-roads-highways-future/

Teece, D. J., & World Scientific (Firm). (2008). Technological know-how, organizational capabilities, and strategic management: Business strategy and enterprise development in competitive environments. Singapore: World Scientific Pub. Co.

            Tesco’s Supply Chain Network

Introduction

This report offers a detailed analysis of Tesco’s supply chain Network while focusing on the logistical and distribution system. Tesco organization is one of the leading retailing companies in the United Kingdom and beyond as its specialty lies in supermarket retailing chain (Christiansen, 2016, p.6). As the mode of generating value for the firm, the company’s supply chain will, therefore, be evaluated from the view of dealing with indecisions, encouraging efficiency and guaranteeing that certain measures are met fully. The study will also look at the Supply chain management programs that the company has employed in developing a consumer satisfaction oriented operation while adhering to operational managerial and organizational concepts. Tesco currently operates with the objective of transforming the retailing shopping experience for its consumers while creating financial value for itself. The report will also offer a detailed valuation of the supply chain analysis. The last part of the study is on the conclusions and recommendations for better performance, where it was determined that Tesco holds a customised and unique supply operation system which seek to support the values related to quality, convenience, and choice.

Overview of the Company

Tesco was established by Jack Cohen in 1910. The company began its operations in 1929 with its first retailing supermarket store opening in 1956 (Tesco, 2018, p.1). Tesco has evolved to be the leading retailer in the UK with its major operations grounded in Europe as well as the East region where it has proved to be successful. The company has a customised brand that differs from a region to another based on the general needs of the consumers within the given market. Tesco is well known for its effective supply chain that is mainly supported by the continuous use of technology and networking improvement. However, due to the changing operating setting, the company has not operated without a number of persisting challenges that have in numerous times affected its reputation and decreased revenue. One of the major approaches that are applied by Tesco is to become the leading value brand inventor that assert on quality along with affordable pricing. It is rather evident that for Tesco brand quality is a fundamental component that seeks to create a more valuable supply chain (Tesco, 2018, p.1).

Tesco has evolved to being one of the most successful supermarkets in the United Kingdom. The company is focused on becoming the leading service and retailing provider in the grocery market. The company mainly employs lean management along with RFID technology in the better management of its Supply System (Kachitvichyanukul, et al., 2015, p.14). The corporation is more advantageous when equated to all its competitors who are well established in the market based on its increased inclusion of innovation within the supply chain which helps in the consistent flow of goods and convenience. The company’s logistics and distribution network can be compared to no other as it is not only characterized by efficiency but also the ability to meet the increasing demands of the market. The company also relies on consistent replenishment and constant distribution (Tesco, 2018, p.1). In that, as the company is mainly focused on the high piling of goods it also values the idea of selling the commodities are lower prices in order to attract more buyers.

Tesco’s Logistic and Delivery Network

In the beginning, the company was more focused on increased products provisions under affordable pricing. The notion was mainly driven by the success of bulk inventory purchases that in turn resulted in high sales, low operating expenses thus increasing the profit margin for the retailing firms (Kachitvichyanukul, et al., 2015, p.14). However, with time increased and rapid changed in the market that was mainly characterized by the need to transition and competition subjected by some of the well-established companies in the market resulted in decreased profit generations which resulted in the ruining of its global brand reputation. Tesco made the decision of setting for essential, radical and consistent changes with respect to its retailing operations thus redesigning its logistics and delivery system with the aim of creating an effective and operational supply chain as supported by the inventive application of technology.

Currently, Tesco has its operations grounded in the domestic and international markets.  There are a number of consistent growth in regard to the operation and distribution strategies (Christiansen, 2016, p.6). Prior the company was dependant on centralized distribution, and collaboration strategies but despite their efficiency, they failed to uphold and enhance its sustainability in the complex market. Currently, the company utilizes primary distribution which mainly involves the movement of commodities from the manufacturers to the distribution sites. This approach is aimed at applying different changes that enhanced the net value of the supply chain with time. For Tesco similar to most other retailing companies the effectiveness of the supply chain is essential in determining its general success in the market as well as its strategic position. Since the stabilization of the primary distribution strategy, this has created the need of creating a more flowing logistics system that seeks to create additional cost advantages abilities which have resulted in the rise of highly competitive distribution charges (Christiansen, 2016, p.9). The fact that Tesco depends on the model of consistent changes as well as improvement of the delivery network has thus resulted in a radical reduction in the lead period to the company’s stores from the vendors.

Logistics and Delivery Elements within Tesco’s Supply Chain

Supermarkets as retailers mainly differ from other processing manufacturers given that they acquire their products from the producers directly through the use of an integrated distribution approach. Supply chain based on Tesco’s operations can best be described as the general integration of some essential operational processes from the suppliers to the retailers that results in the provision of products and needed data that leads to increased value for the consumers and stakeholders (Bourlakis & Weightman, 2008 p.16). For Tesco, while its objective lies in creating maximised earning for the stakeholders it asserts that satisfaction and the ability to meet the ever-changing needs of the consumers is a necessity. Tesco boasts of its leading position in regard to retailing capabilities in the provision of superior retailing experience which is mainly asserted by its main philosophy that holds that quality is also as important as convenience and affordability. In order to fulfill the set values for the company’s delivery network, the company seeks to create a number of benefits to the consumers (Zentes, Morschett & Schramm-Klein, 2017, p.24).

To begin with through consistently upgrading the delivery and refilling systems the company seeks to create convenience for the shoppers. In that, it has a number of distribution channels that help in the provision of goods when needed and at all the needed store without fail or delay. In that, with convenience, there is a unique shopping experience based on the ability to physically purchase the required commodities (Zentes, Morschett & Schramm-Klein, 2017, p.24). On the other hand, choice is also a value that is provided through its focus on the provision of products ranges. In that, the company focusses on home-based goods along with food and grocery products. The company is well known for its provision of recognized, popular as well as quality brands along with their own customised brands in general. In that while the company has positioned itself as an affordable and diverse brand it is able to offer a choice and opportunity for its consumers to choose from variety of products while comparing the associated pricing of each in order to settle for the one that best appeals to them and suits their financial state (Bourlakis & Weightman, 2008, p.18). Consumers are consistently becoming sensitive to products pricing as most of them seek to follow companies that are focused on affordability. However, this does not necessarily imply that quality no longer matters. In that, majority of the consumers, are more driven by quality rather than price, when it comes to foodstuffs based on the increasing health-related issues.

Tesco has in the past suffered from quality issues despite the fact that the company asserts on sustaining the quality value. The company mainly seek to maintain the value by following on the delivery network which is fast and helps in evaluating the wellness of every product (Jones and Clarke, 2002, p.31). Previously the company would acquire products directly from the suppliers but now acquires most of its goods from the processors as a way of enhancing quality. Based on the establishment of the company and the fact that it procures products in bulky it holds a power bargaining power over the suppliers and with the need to upgrade the system often the suppliers finds it hard to abandon the provisions of the company. Its multi-networks have increased its general ability to operate within the global scale at ease while seeking to meet each market need and ensure that the set values are acquired by all the consumers (Fernie and Sparks 2004, p.3).

Analysis of the Supply Chain and Related Operating-Level Processes

Tesco’s supply chain management effectiveness is one of the primary factors that have assisted the company in evolving as the leader in the retailing sector in the United Kingdom and beyond. In that, the company successfully applied lean management resolutions as well as technology efficaciously into its SC. The company has constantly adopted a number of approaches such as primary distribution, RFID technology consistent replenishment and improvement and forecasting data (Gustafsson et al, 2006 p.12). These approaches are not only aimed at ensuring that the supply system becomes effective in delivery of goods but also to ensure that the products are provided at the needed time, amount and quality. With the increasing competition in the international and domestic market, there is a need to decrease the operating expenses to maximise gains. It is through the reliable system that Tesco has been able to meet these elements which in turn supports the development of a system that is consumer oriented and one that seeks to transform the retailing sector. Tesco’s delivery and logistic network can best be defined as a system that integrates the demands of the consumers, shareholders and retailing industry. Through quality servicing the company is able to focus on building better associations with the consumers which are objected at creating grounds through which their needs can be understood and meet. Having an effective SC has assisted the company in creating strategic positioning and sustainability in the market (Christopher, 2016, p.18).

Proposals and Justifications for Change

Based on Farahani et al, (2014) despite the fact that Tesco has for years claimed success in the retailing market due to its effective supply network that seeks to uphold the needs of the consumers and generate high earnings, it is evident that there is a need to adjust the system. The company’s delivery and logistic system is one that follows the primary strategy that has proved effective based on its capability to reduce expenses related to operations and lowering the lead time there are a number of challenges that might affect the sustainability of the company’s SC due to the complexity of the supply and delivery system (Bourlakis & Weightman, 2008 p.16). In that despite the fact that the company has placed a number of strategies to control quality and delivery effectiveness, it has been proved that the complex structure of the SC has resulted in operations inconsistency as the reputation of the company has been affected heavily by some of the most recent scandals. Due to the use of vertical integration the company holds less control in regard to the general process of manufacturing which creates challenges in its general ability to sustain quality standards for the long run.

According to Mylan et al, (2015), there is a need to create a supply network that promotes both responsibility and transparency in order to gain trust from the consumers. The retailing industry is particularly sensitive given that most of the commodities being offered need to uphold to healthy and quality standards and if one of the aspects fails then the company can fall rather easily. The use of technology and constant upgrading of the systems has proved to be rather effective for the company but it has, in turn, generated a number of difficulties throughout the system. In the quest of rebuilding high value within the system, Tesco is fully committed in the creation of fresher objectives that seek to rebuild the main focus of its system (Farahani et al, 2014 p.95). This is mainly aimed at easing the system in the quest of upholding its values and encouraging transparency. It is not easy to operate in the contemporary market with a reputation that has been painted with mad because consumers are also interested in companies that appears to be highly responsible in general. The delivery network is the most important aspect of the company based on the fact that it seeks to ensure that goods are provided to the stores in the right amount and time in order to fulfill the convenience and choice value for the consumers.

Critical Success Factors, Risks, and Cost Drivers

Based on the success that Tesco has acquired in the past few decades and its ability to sustain the desirable performance, it can be interpreted that the company owns all the necessary success forces that are needed in the creation of an operational and value grounded SC (Christopher, 2016, p.20). In that, the company owns some of the most skilled staffs that play part in supporting its consistent improvement and technology application in management. In that, with upgrades, the company is able to tap the larger market even more as it seeks to create choices for some of the most recognized brands for its consumers along with convenience. By focusing on a system that is ruled by minimal expenses the firm has, in turn, be able to develop consistent growth while supporting affordability and high profits earning for the shareholders. However, despite this success, the company is mainly threatened by the inability to sustain some of the most dominant values such as quality and with that, it lowers its general capability of gathering more consumers. In addition, competition is a major risk given that the existing competitors are slowing copying its strategies which will intensify competition in the near future (Christopher, 2016, p.20). Some of the cost drivers within the firm include technology and the company’s focus on constant improvement of some of its dominating processes.

Impacts on the Operations Management of the Organisation

The retailing industry is among the leading sectors whose success depends on the effectiveness of the operations management. If the retailing operations beginning with the logistics, delivery and servicing networks are not managed effectively them this will result in automatic failure and decreased profit gains (Mylan et al, 2015, p.23). The success factors and the supply initiatives that the company has undertaken in managing operations have proved to be effective. In that, the company has been able to create convenience, quality and choice values for its consumers even though a number of challenges have been experienced while attempting to balance and sustain the quality value. The company boasts of having the most efficient as well as responsive supply chain that is mainly oriented on the needs of the consumers in general. In addition, the approaches have been useful in enabling the company to operate under reduced expenses, increasing its sales based on the ability to boost the retailing experience and increased profits gains.

Recommendations

There is a need to focus on the recreation of quality value through the company’s Supply network in general. In that, the company should customise its vertical integration approach which hinders it from having control over certain measures such as quality. The ability to oversee the operations of the manufacturers will, in turn, increase its ability to uphold different values such as convenience and quality. Tesco can create improved relationships with consumers by creating better modes of payment and order. In regard to making some radical changes, Tesco needs to implement a system that is mainly applied by most of the retailers which involve setting a more stable online retailing platform. In addition, the company should create a more simplified supply network that works to reduce the operating expenses while increasing efficiency in general. This will, in turn, increase its general ability to respond to competition and changes in the market.

Conclusion

Based on the above analysis, it is evident that Tesco has evolved from being a retailing organization to be the leading firm in retail operations in the UK and globally. This success has mainly been facilitated by the existence of some essential success forces that it values and focuses on them throughout its operations ranging from innovation, quality, convenience, cost control and constant processes improvement. Tesco acknowledges the fact that although its success has mainly been influenced by having an effective supply network its strategy has created some barriers that might affect its future’s sustainability. The company is consistently seeking to better the manner in which it creates operational value via its SC and the manner in which it has designed its strategies in the recent has demonstrated that it has a flexible delivery network while it seeks to focus on responsibility and effectiveness.

References

Bourlakis, M. A., & Weightman, P. W. H. 2008. Food Supply Chain Management. Hoboken, Wiley.

Christiansen, B. (2016). Handbook of research on global supply chain management. http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=1095588.

Christopher, M., 2016. Logistics & supply chain management. Pearson UK.

Farahani, R.Z., Rezapour, S., Drezner, T. and Fallah, S., 2014. Competitive supply chain network design: An overview of classifications, models, solution techniques and applications. Omega, 45, pp.92-118.

Fernie J and Sparks L. 2004. Logistics and Retail Management: Insights into Current Practice and Trends from Leading Experts, Second Edition, London: Kogan Page

Gustafsson K, Jönson G, Smith DandSparks L. 2006. Retailing Logistics & Fresh Food Packaging: Managing Change in the Supply Chain, London: Kogan Page

Jones, D T and Clarke, P. 2002. Creating a customer-driven supply chain, ECR Journal, 2 (2), Pp. 28-37

Kachitvichyanukul, V., Sethanan, K., & Golinska-Dawson, P. 2015. Toward sustainable operations of supply chain and logistics systems. http://public.eblib.com/choice/publicfullrecord.aspx?p=3567583.

Mylan, J., Geels, F.W., Gee, S., McMeekin, A. and Foster, C., 2015. Eco-innovation and retailers in milk, beef and bread chains: enriching environmental supply chain management with insights from innovation studies. Journal of Cleaner Production, 107, pp.20-30.

Tesco. 2018. Tesco’s Leading Food Business. Retrieved from www.tesco.com/corporateinfo/

Zentes, J., Morschett, D., & Schramm-Klein, H. 2017. Strategic Retail Management: Text and International Cases. http://dx.doi.org/10.1007/978-3-658-10183-1.

PROJECT on BMW supply-chain + presentation

Introduction

Increased competition, fluctuation in market demand, changing customer requirements has brought about changing preferences of customers in the market.  In the automobile industry, such changes have been experienced as firms get involved in globalization that has presented various risks and opportunities. At the same time the changes have put a lot of pressure on manufacturers to improve quality, efficiencies and drive innovation in serving the needs of the customers (Campos & Rebs, 2017). This can be related to the need for increased value-based performance for the various organizations operating in the automobile industry. The role of effective supply chain in improving performance is critical and cannot be overlooked since it gives competitive edge to firms operating in the automobile industry (Schaltegger & Burritt, 2014). The various structural changes and arising issues have informed the supply chain management strategies adopted by organization around the world. BMW is not unique in terms of facing and dealing with such emerging issues. The BMW supply chain has been characterized by a franchise network that is complex and consisting of the manufacturer, suppliers (tier 1-tier 2), distributers, dealers and providers of required logistics (Fleischmann, Ferber & Henrich, 2006). The BMW vehicles are products of much complexity where a range of components are combined in a clear manner (Ambe & Badenhorst-Weiss, 2010). The production of a typical car requires over 20,000nparts or 10,000 major components, while a manufacturer supplies many models that needs constant upgrading. This means that the supply chain should therefore, be robust and flexible in terms of production  line , effective suppliers and even distribution network  that is complemented by customer care and sales department that is responsive enough. To BMW, quality and delivery of suppliers is an important supply of its supply chain and requires an approach that is effective and holistic during selection and evaluation of the supply methods. The build to order system employed by BMW and a strategy for mass customization in accordance with the requirements of customers should be such that it serves the goal of the organization (Melo et. al 2009).

Discussion

The beginning of BMW’s supply chain is the customer and the end is still the customer. The firm has a large supplier network consisting of over 12000 suppliers in over 70 countries (BMW, 2016). The highest percentage volumes is derived from Germany and other parts of Western Europe and the purchasing division of firms  is tasked with selection , evaluation , validation and even quality assurance of products supplied while making sure that sustainability is maintained (Stadtler,  2015). Major aspects in the development of the supplier system involves building of a consistent channel of communication, having the appropriate system for rating supplier and employing many sourcing strategies to know these suppliers. The firm obtains the components and parts from different suppliers around the globe and this determines the supply chain system of the firm

Collaboration and Cooperation with suppliers

Since the firm obtains various parts and components from different suppliers, developing and maintain good relationships with them is very important since as a car manufacturer, its supply chain depend majorly on quality and responsiveness of their services (Reuters, 2017). The firm strategy comprises of Just-in-sequence and Just –in-time methods, where the need to collaborates and communicate on real time basis is an very necessary. Accuracy and on time information is a major aspect for effective and management and controlling of supply chain. The information may get distorted along the chain, from retailer to supplier of raw materials which can lead to bullwhip effect. This may result from conflict on objective views or delays resulting from the complexity of the distribution network. Such delays have been observed in the past where a Tier-1 supplier – Bosch- which suppliers steering gears that are used in building of the BMW cars  1 to 4 series – was unable to meet the demand for such parts which greatly affected the operations of the company (MCGee, 2017).

This represents the type of risks that automobile manufacturers faces in the current supply chain networks in the globe. BMW has tried to negate such issues through integration of IT systems and other technologies like EDI for the bigger suppliers and even mySAP and at the same time making sure that its development is made alongside its suppliers and distributors. The mutual knowledge transfer arising from such collaboration has benefited that firm and assisted in strengthening the supplier network (Noor , 2013). For instance, the North American supplier network has been tied together through its centre for process development that works closely with suppliers and its role is crucial in development of suppliers’ capacity (Brandes et. al 2013).   Such collaboration has created a personal relationship with suppliers in emerging markets like China and India and it has been a tremendous asset. BMW is able to benefit from the knowledge of local customer requirement and make the right strategic changes that are needed for effective process of decision making (Cesarani, 2015).

Designated Production

The industry has experienced many changes since the inception of BMW manufacturing, where the emphasis has seen a shift from mass system of production to a lead system of production and currently a system that is more driven by customer demand. While previous normal practice involved a “built-to-stock” system where car stock was produced on the basis of anticipated demand and sufficient units were built with the warehouse capacity of the manufacture in mind, the shift has seen more focus on market demand (Muller, 2010). The aim of built-in-stock was to achieve economies of scale and constant production of the product in bulk leads to lower production for every unit. In the current market, manufactures have to achieve the right balance between market demand and production and this is a major point of consideration in a market that is continuously volatile (Alenuskin & Schotter, 2012). The production strategy for BMW comprises major of a pull mechanism where the market demand but not forest demand in forms its production cycle. This is enabled by the supply chain which ensures that build-to order, just-in-sequence and just-in-time are integrated into the production system (Pitts, 2015).

Build-to-order Supply Chain

The current market environment is very diverse and the changing customer needs and preferences make it to be fast-paced. There is rapid technological changes and increased globalization which presents opportunities and needs for automobile firms that are aiming at achieving a bigger product range in the different markets in the globe. The risk arises for complexity in the range of car products and need for customized products to satisfy the needs of customers. BMW tries to tackle the market risks through adoption of strategy aimed at designing to defer product differentiation , a case where final product configuration is put off as many times as possible until the market demand allows (Gunasekaran  & Ngai, 2005). The BOSC supply system helps the firm to deal with such risks and exploit the existing opportunities. The system leverages the outsourcing and technologies’ advantages to serve the specific customer needs with effective responsiveness. This involves a ‘Customer-Oriented Sales and Production process ‘where customer informs the production process but not the car. Through the supply system, the company allows the customer to change his preferences in some few days to car delivery which makes it possible BMW to achieve high degree of customer satisfaction and responsiveness (Muller, 2010). All the aspects that are captured in the process like finished goods zero inventory and zero work-in-process stocks are achaived in the process.

Distribution system

The system of distribution revolves around market demand and such strategies used are periodically evaluated. The basic idea is supplying and unloading products in different ports where BMW’s biggest market can be found and this ensures that lead times are greatly reduced. The company is always aiming optimizing the distribution network using built-for distribution project where the department handling materials deals with the incoming transportation and remaining in constant facilities with company’s facilities, purchasing departments and suppliers (Olhager et. al 2015).

Reverse logistics network

This comprises of all operations involved in reusing finished products and surplus materials that are used in forward chain. The framework for BMW reverse logistics is effective and involves utilization of re-manufacturable, recyclable and reusable parts of vehicles. In the production cycle, the company applies a closed-loop method where the residual materials that are reusable are used up in the same machine (Hausladen et. al 2015).The materials such as scrap metal are reused in the production process. The recalling of products also forms part of the aforementioned process of reverse logistic by the company.

Development areas plan 1

Sustainable transportation and logistics

Sustainable transportation requires resources and time which are dedicated for optimization of the inbound and outbound logistics (Schiller et. al 2010). This involves controlling the transportation network for parts and components and the finished products with an aim of optimizing space, reducing cost, improving time needed and reducing the usage of assets. BMW needs to improve on its transportation during the supply of parts and components and optimizing it using the reverse logistics network.

Option Appraisal

The goal of this strategy is to ensure that there is optimization of the transportation route with the aim of minimizing costs of inbound and outbound shipments and other containers used in transportation of materials. Another objective is find an efficient way of obtaining various parts from suppliers in different areas for timely production of cars and hence meets customer demands. Where possible, smart algorithms can be used to determine the best method for optimizing the flow-paths of products and materials used in production.

 Strategic approach

The strategy for this plan is to have a consolidation center where supplier selection and analysis will be done. Since the suppliers for BMW are many and supplying different components and parts, the center can be used for combining smaller trucks or shipments for less large containers and hence reduce the transportation cost. The optimization of the flow-path can select the products to be taken to the center and a network optimization will determine the number and location of consolidation centers. The strategy will ensure that transportation cost is reduced greatly while deliveries are made on time.

Project timeline

         Week 1                    week 2              week 3                    week 4                       week 5

The timeline for the project involves 5 weeks between approval and completion. The first week will involve project approval by the management after which it will kick off. The second week will involve analysis the cost of establishing the consolidation centers and planning for the resource. In the third week, the funding of the plan in the initial development stage will done followed by will involve programming and certification of the process. In the fourth stage, the documentation of the project and obtaining usability feedback will be done after various tests. The fifth week will involve a final checkpoint of the project and closing it.

Resources

Resources for the organization include the funds, equipments, materials, time and knowledge required in the completion of the project (Subramanian, 2015). For the development of the consolidation center for BMW, the resources required will be sourced from the company and will be distributed through a plan for resource allocation. A plan for resource allocation is an essential tool that ensures effective management and allocation of the scarce resources set aside for a project. The various resources required for this development include skilled human resources, equipments for carrying out the logistics and funds will be necessary.

Budgeting

Risk register

Plan 2

Supplier social responsibility

Establishing supplier code of social responsibility demonstrates a clear intention to have a sustainable ground for validating the economic, environmental and social benefits of the operations being carried out by an organization.

Option appraisal

The establishment and requirement for BMW suppliers, dealers and distributors to be socially responsible is aimed at safeguarding the reputation of the firm and complying with existing legislations. It also aims ensuring that the company meets the expectations of the customers and the society in which it operates. When the firm is associated with suppliers who have little regard for the wellbeing of the community and the environment, it may lose the hard earned reputation and even a portion of market share (Manners-Bell, 2017).

Strategic approach

 The strategy for implementing this suggestion will involves the development of a policy on social responsibility and which a supplier is required to abide with if they are to continue with a business relationship with BMW. This involves the establishment of standards on working practices, management of water and waste, policy on minerals from conflict zones, health and safety for workers and community.

Project timeline

                       Week 1                      week 2    week 3                          week 4

The first week will involve obtaining approval for establishing a code for corporate social responsibility. Presentations on suggested best practices will then be presented to management and suppliers in 3^rd week. The management and suppliers will then have to approve of these suggestions and then enter into an agreement.

Resources

The resources needed for this project include mainly funds for recruiting personnel both internally and consultants with knowledge on automobile industry and related social and environment impact. The resources will be provided by the firm

Budgeting

 The budget include the cost of recruiting internal experts and consultants from outside to draft the required policy

Risk register

Reflective analysis

An effective supply chain forms an important part of competitive business strategy since it leads to reduced cost, improved quality of services and products to customers. With increased changes in the global market, BMW supply chain has to manage to face such changes without negatively affecting the operations of the firm. The supply chain of the firm is largely based on 1-tier and 2-tier suppliers who supply various parts and components necessary for manufacturing of various car models. The supply chain has enabled the growth of the company in terms of production capacity and market size since it is based on the market demand. The system has experienced various hitches where the suppliers have been unable to meet the production demand of the firm which has affected the operations of the firm. This calls for an improved system of supply which will ensure that increased efficiency is achieved by suppliers at reduced cost. The adoption of consolidation center will enable the firm to optimize on the optimization of materials and products and this will lead to reduced cost and hence, profitability. In addition, adoption of a corporate social responsibility policy will ensure that the firm’s reputation is protected at the global market.

References

Schaltegger, S., & Burritt, R. (2014). Measuring and managing sustainability performance of supply chains: Review and sustainability supply chain management framework. Supply Chain Management: An International Journal, 19(3), 232-241.

Campos, J. K., & Rebs, T. (2017). Opportunities of Combining Sustainable Supply Chain Management Practices for Performance Improvement. In Social and Environmental Dimensions of Organizations and Supply Chains (pp. 13-34). Springer, Cham.

Fleischmann, B., Ferber, S., & Henrich, P. (2006). Strategic planning of BMW’s global production network. Interfaces, 36(3), 194-208.

Ambe, I. M., & Badenhorst-Weiss, J. A. (2010). Strategic supply chain framework for the automotive industry. African Journal of Business Management, 4(10), 2110.

Melo, M. T., Nickel, S., & Saldanha-Da-Gama, F. (2009). Facility location and supply chain management–A review. European journal of operational research, 196(2), 401-412.

Stadtler, H. (2015). Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.

BMW, (2016).KEY INDICATORS: SUPPLIER MANAGEMENT. Retrieved from: https://www.bmwgroup.com/content/dam/bmw-group-websites/bmwgroup_com/responsibility/downloads/en/2016/BMW_GROUP_KeyIndicators_Supplier_Management.pdf

Reuters, (2017).Supply problems hit production at BMW: Focus. Retrieved from: https://www.reuters.com/article/us-bmw-factories/supply-problems-hit-production-at-bmw-focus-idUSKBN18O0GI

Drones for Delivery Services

Rapid development in technology has been the most welcoming part of advancement that has seen many companies which deal with deliveries fade away day in day out. At one point in time, people could only communicate through the use of written letters that were sent via messengers who were trusted to deliver the message without making any alterations in the letter (Westcott, 2017). The problem came in when the people who intended to communicate were separated by a relatively large distance or even by a huge mass of water such as oceans. This would mean that the message would take a lengthy period of time to be delivered and to bring back the response.

The magic of civilization, industrialization and technology has turned this situation into a benefit for many while making others suffer through being pushed out of business as people and other companies embrace technology as a way of doing business. In the contemporary world, people no longer depend on post-offices to deliver their letter in a week’s time; rather there are other direct delivery services that have been innovated to enhance satisfactory delivery of urgent goods or letters. Innovations in the area of flight have led to the development of drones. These aerial vehicles which are unmanned have made a very significant achievement in surveillance and other military functions such as dropping bombs (Redding et al., 2017). Supposedly, it is this latter use that opened a lee way for innovators to think of the use of drones in delivering goods. This paper seeks to explore the function of drones in delivering goods. It will comprehensively consider the limitations and the abilities of drones as compared to other parcel delivery services with regards to distance, cost efficiency, amount of load, control, danger of operation and other important factors.

A photo of a drone delivering pizza

The Technological Perspective

The technical aspect of drones also has the source of energy as a great concern. This is because making drones to use fuel will mean that the machines will need to be operated manually. Conversely, the use of fuel would have immensely increased the weight of the machine. In addition, environmental pollution would also become another issue to deal with since the use of fuel by drones would have increased the amount of carbon emissions content in the atmosphere. In addition to this, drones are programmable machines which also need some form of electric power to run the inbuilt computers in the machines (Park et al., 2016). Even though drones will be responsible for some environmental crisis, they will have some benefits which will be many compared to the disadvantages. Some of the benefits include the fact that they can be used to save lives where people cannot access during emergencies such as in the oceans. The study of the weather and any upcoming storms can be identified by researchers before the storms hit humans living in specific parts of the world.

As such, the unmanned aerial vehicles were left with the option of using batteries as their source of energy. The batteries used by drones can be classified into two groups. The first group is made up of the inbuilt batteries while the second group is made up of detachable batteries. The removable batteries can also be classified into single-use batteries and rechargeable or multiple use batteries. Rechargeable batteries are commonly used for the function of powering drones. This is because they have an added advantage as compared to inbuilt batteries. The batteries also outdo the single-use batteries (Park et al., 2016). Rechargeable batteries are very convenient when it comes to services. A charger can be used to recharge a battery unlike the single use which will require installation of a new one or time wastage when it comes to their use. The performance of the batteries is very good as compared to the single use batteries in terms of the voltage which is approximately 1.5 volts. Although the cost of buying a rechargeable battery is expensive, there is cost saving in the long run since it is a onetime investment for the users.

Detachable batteries which are rechargeable make the delivery drones to be more efficient in delivering parcels. When drones get back to the depot, the used batteries are removed and the recharged batteries are installed immediately. This takes a relatively negligible amount of time as compared to the amount take to recharge batteries that are permanently installed in a drone. The power that can be drawn from these batteries determines the distance and that can be covered and the load that can be carried by a drone (Park et al., 2016). The number of batteries purchased during the initial investment period should also be limited matched with the operation period. Rechargeable batteries undergo a depreciation known as calendar aging and this may consequently affect the operation of the drones or even increase the charging period (Zhang and Sheng, 2015)

Another aspect of designing drones should be directed towards the construction of heterogeneous batteries or drones which will possess the capacity and the capability of carrying heavy and other bulky products from one point to the other. Different customers order different sizes or loads of goods. As a result, it is more economical to attach small goods to small drones and large goods to large drones. Conversely, attaching batteries that are unnecessarily huge to drones that are carrying small goods or delivering goods in a short distance range is also a waste of resources or overkill (Redding et al., 2017). For this reason, the use of heterogeneous batteries can help in reducing the weight of the drone when necessary (Park et al., 2016).

The technology applied to deliver goods by drones goes beyond the flight time or the design of the models. Efficiency in time management largely depends on the time it takes for a drone to be set and ready for the next take off for either a delivery service or a rescue mission. The loading time also involves the exchange of batteries. As such, the charging speed can also act as a factor that can facilitate efficiency in operation and cost (Park et al., 2016). This implies that if the charging speed is high, less spare batteries will be purchased than if the charging speed is low. Another consideration that ought to be made is the replacement of the batteries from the battery pool. This decision is highly dependent on the life of the batteries and the frequency of use of the batteries. When batteries with a long-life span are used more frequently, they also retire more easily (Park et al., 2016).

The Operation of Drones

The operation of a drone depends on five components which form the drone operation system. These include the drone, the means of communication, the control station on the ground, the pilot, as well as, the support team. The drone can either be designed as an octocopter or a quadcopter. Whether the design team opts to go for quadcopters or octocopters, there is a need for them to understand that each of these designs has its own advantages and shortcomings. Besides being agile, the quadcopters have a restricted endurance and payload capacity. Lengthy and detailed delivery of goods requires a more sophisticated architecture in the design of the drones as well as in the setting up of the entire drone support system (Redding et al., 2017). The time taken will be of benefit since the drones are set to perform certain activities. The setting will now depend on the workload and this will influence the level of activities done to make sure that the drone does not malfunction before it delivers.

The control station on the ground hosts the pilot who is responsible for flying the drone to its destination and back to the depot safely. There are three types of control which can be applied in controlling the drone (Westcott, 2017). These include supervisory control, high-level mission planning, and full control authority. The choice of the mode of control used to direct the drone should be governed by the safety of the third parties on the ground and other airspace users (Redding et al., 2017).

Another important aspect of the operation of drones is the communication method applied. The communication system plays the noble role of connecting the drone to the control station on the ground. It is also through this communication system that the pilot is able to interact with the environment in which the drone is operating. Quadcopters operate using radios tuned to the frequency of 2.4 GHz (Redding et al., 2017). Operating in this frequency has a limitation of a relatively shorter range in terms of reach. For lengthy deliveries where the drones get out of the line of site, satellite technology can be applied. The use of satellite relay to control the drones may, however, have a disadvantage of creating large amounts of latency (Westcott, 2017).

The satellite has a bigger advantage of allowing the drone to be controlled from any point on the globe, therefore, countering the short-range disadvantage of radio transmissions. These communication systems and others that are available for use can be combined to ensure efficiency and effectiveness in communication between the drone and the pilot. Combining these systems of communication helps to supplement the weakness found in one system of communication with the strengths of the other system of communication (Redding et al., 2017).

Below is a framework for a drone delivery service from the seller to the buyer where it is controlled by a specific network and personnel to ensure that the drone stays on the course.

Fig.1 drone delivery service architecture. Retrieved from: A Security Framework for a Drone Delivery Service (Seo et al., 2016). 

The support team forms an essential portion of the drone system. This team is responsible for a number of tasks including repairing the drones, replacing the batteries, loading the right package to the right drone and informing the pilot on the readiness of the drone (Redding et al., 2017). It is, therefore, necessary to ensure that there exists an efficient communication between the support team and the pilot. The support team needs to keep a good record of the repairs made as well as the battery replacements made. This information helps in avoiding system failure due to overused batteries of poorly maintained drones. The maintenance should be done with the help of experts from the manufacturing company.

Even though it may be true to say that technology is replacing human intelligence, it may also be true to hold that the failure of technology may have worse outcomes than any natural disaster ever witnessed in the universe. The substantial reduction in the mishap rate of drones is what will lead to the development of full potential in using drones to deliver goods (Redding et al., 2017).  A good example is when the communication systems of a company hosting over one thousand drone that are on transit fail. If, by any chance the company happens to lack a back-up system or a way of making the drones to switch to safe mode, the outcome of a thousand unmanned aircraft systems on free fall from the sky would be adverse.

The technological aspect of drones is vast than the simple advantages of saving time and labour. A company operating these drones need to conduct a complete risk analysis with respect to technology failure and improvise alternative measures that can be applied to secure the lives of people. Airplanes operators have also reported cases of experiencing close calls from drones. This may be another impending danger if the routes used by drones are not specifically designed to avoid criss-crossing the paths used by airplanes (Park et al., 2016). As such, the use of drones goes beyond the interests of the company in making profit through timely and convenient delivery. This is so because it has to involve other stake holders in the initiation and implementation of the whole process. This may drive interested people into questioning the viability of this technology with regards to the risk it may pose to the public.

Survival Chances for Drones

Some Amazon logistic analysts in Amazon and Co. argue that transportation of drones cannot be limited by weight or distance. The statistics from Amazon reveal that about eighty-six percent of the packages they deliver weigh less than five pounds. In addition, Walmart has also established that nearly seventy percent of Americans live near a Wal-Mart depot (Wang and Ryan, 2017).  The aspect about distance can also be covered by companies moving closer to customers or by opening new branches and depots with the aim of reducing the distance coverage of drones. This in return will ensure that the drones do not travel long distances where they are prone to challenges and which could cause damages to goods in transit therefore the closer the distance the higher the survival chances.

Another plus to the implementation of drone delivery services is the fact that there are some areas in the world that have no access to all weather roads. As such, customers in these places are always forced to pick their goods from the towns that are close by are that are covered by all-weather road networks. This hinders effective business performance since it is easier to implement drone infrastructure than build roads (Wang and Ryan, 2017). This problem can be averted by the use of drones since there are some areas which will never by all-weather roads. Such include hilly areas in which construction of roads can prove to be uneconomical. In such places, drones have higher chance of thriving as the only machines that can ensure effective parcel delivery.

In order to ensure that drones stand the test of time, there are three other considerations that also need to be made. The first consideration is to find a way in which drones will be flown out of the line of sight since the current laws stipulate that it is important for the pilot to make eye contact with the aircraft at all times. Secondly, drones are known to fly with the help of cameras as visual aids. The cameras may fail to display some things. As such, the flight of drones can be made more accurate by the installation of sensors such as the ones used in autonomous cars. With cameras on, the question of privacy also comes into play (Berkowitz, 2014). This implies that sensors may remain to be the best flying aids for drones (Westcott, 2017).

Lastly, it has already been indicated that the current size or types of drones are not capable of carrying heavy goods as compares to trucks which have the capacity to carry a large load over a big distance. Though companies may claim that most of their deliveries are not as heavy, it is important to note that making single deliveries calls for multiple drones. As such the interested companies need to research on a technology that will allow a number of drones to be operated by a single person (Westcott, 2017). The implications brought about by having drones such as being very noisy need to be looked into since it would be very difficult to continue with studies in a place where there are numerous drones in the air on their way to deliver customer orders.

Conclusion

The use of drones would be one of the best technologies in the history of parcel delivery. The companies aspiring to have this project implemented are more than ready to ensure that the project comes to realisation. On the other hand, there are several issues that have been raised by authorities and even by individuals. Such include the issue to do with the privacy, accidents that may be caused by crashing of drones, the nuisance of noise pollution and failure of technology. It is also hard to determine whether these drones can operate in busy areas or out of the line of sight (Westcott, 2017). Other than cost effectiveness and delivery of goods without delay, it is mandatory for the participating companies to ensure that these issues are settled in order to enhance a comprehensive delivery system that is free of posing any dangers to the human population.

References

Berkowitz, Roger. "Drones and the question of “The Human”." Ethics & International Affairs 28.2 (2014): 159-169.

Park, Sangyoung, Licong Zhang, and Samarjit Chakraborty. “Design space exploration of drone infrastructure for large-scale delivery services.” Computer-Aided Design (ICCAD), 2016 IEEE/ACM International Conference on. IEEE, 2016.

 Redding, Louis, Rajkumar Roy, and Andy Shaw. “Advances in Through-life Engineering Services.” (2017).

Seo, Seung-Hyun, et al. "A Security Framework for a Drone Delivery Service." Proceedings of the 2nd Workshop on Micro Aerial Vehicle Networks, Systems, and Applications for Civilian Use. ACM, 2016.

Wang, Dan, and Ryan Petersen. "The Economics Of Drone Delivery." Flexport. N.p., 2017. Web. 12 Sept. 2017.

Westcott, Richard. "New Trials For Delivering Goods By Drones." BBC News. N.p., 2016. Web. 12 Sept. 2017.

Zhang, Zhengcheng, and Sheng S. Zhang. Rechargeable Batteries: Materials, Technologies and New Trends. , 2015. Internet resource.

 Internal and external customers

 In every organization, there are internal and external customers and both play a significant role in running the business. Internal customers are workers who provide services such as production, operations, human resources and so forth. They include superiors and subordinates who interact in providing quality customer service through applying their knowledge and skills in business operation. On the other hand, external customers are customers (retail buyers, discount buyers, service buyer, service user, wholesalers, distributors, and so forth) who purchase the products (Bouranta, Chitiris & Paravantis, 2009).  Internal and external customers need quality services for them to run the business effectively and purchase the products. For example, internal customers need to be appreciated, they need respect, a positive work culture, effective guidelines and effective communication. These will help them increase productivity, morale, performance and provide quality external services. On the hand, external customers need positive relationship, excellent experience,   quality customer service, positive response and professional behaviors (Bouranta, Chitiris & Paravantis, 2009).

 The big issue in modern organizations is that they do not value the internal customers.  For example, the organization management do not value the internal customers in that sometimes customer use poor equipment, they lack complete instructions and work orders, they work in unhealthy work environment and management ignores internal complaints and so forth. This issue result to devastating effects on organization’s business since internal customer decreases performance and external customers become dissatisfied with the services offered.   Note that lack of teamwork and communication will result to fail to achieve common goals and organization effectiveness (Bauer, Duffy & Westcott, 2006).

Many organization pay attention on external customers and pay little attention on internal customers. Management tends to offer quality service to external customers with objectives such as retaining them and to maximizing revenue. They focus on business growth and profitability and for this reason they apply all the possible strategies to ensure that external customers are satisfied (Bouranta, Chitiris & Paravantis, 2009).  However, it is importance to understand that both internal and external customers play role in promoting positivity and productivity. The fact is that if internal customers get better services, definitely external customers will get high quality services. According to Bouranta, Chitiris and Paravantis (2009), internal customers need internal quality services such as teamwork, training, policies and procedures   and more.  For them to offer quality services to external customers, internal processes are key determinants in that they influence willingness and satisfaction.

To address these challenges, the organization management must care for internal customers for them to offer quality services to external customers. Bauer, Duffy and Westcott (2006) add that quality external customers’ services are rooted from quality organization function. Therefore, management should build a customer-focused organization   which encompasses quality function deployment (QFD).  This is an approach where the business understands all the customer needs and creates plans and strategies to meet the needs. In other words, in order to effectively respond to the ‘voice of the customer’, internal customers should produce quality products through product planning, process planning, quality control and so forth (Bauer, Duffy & Westcott, 2006). The point is for them to achieve quality; internal customers need clear expectations, reasonable guidelines, clear responsibilities, clear communication, training and more. These will help them increase retention, foster external customer satisfaction, increase productivity and minimize acquisition costs. It is important for the management to pay more attention on internal customers and build a positive relationship with them. They should ensure that internal customers gain a sense of empowerment through addressing their problems and concerns (Bauer, Duffy & Westcott, 2006).

Reference

Bouranta Nancy,  Chitiris Leonidas & Paravantis John. (2009). The relationship between internal and

external service quality. International Journal of Contemporary Hospitality Management. 21  (3)

pp.275-293,

 Retrieved from: http://www.emeraldinsight.com/doi/pdfplus/10.1108/09596110910948297

Bauer, J. E., Duffy, G. L., & Westcott, R. T. (2006). The quality improvement handbook. Milwaukee, Wis:

ASQ Quality Press.

Consumer Behaviour

Introduction

The purchasing decision of consumers is often affected by aspects which are beyond their control, but have either direct or indirect impact on how they live and how they consume. Due to that reason, consumers are usually faced with a lot of external influences which may include individual’s beliefs, culture, subculture, structure of the household, and the people which a person relates with. Market and business owners therefore refer to this us external influences, since the source of the influence is based on the outside person, and not on the inside. Currently, consumers are faced with a wide variety of product assortment, and competition is also stiff among different companies. Internal and external factors are linked, hence they work hand in hand in aiding consumers in the process of decision making. This paper is therefore going to analyse the key influential/external consumers of Chinese consumers, before providing an analysis of each consumer behaviour.

The following are the key influential/external consumer behaviour in China: Age, product preferences, and subcultures.

Age

Over the years, Chinese consumers have been majorly affected by age, a factor which determines which products will be on high demand and which ones will not. The Chinese were earlier known to be extravagant, where they would spend their finances on products. However, currently, their purchasing power has really dropped, a factor which has been attributed to economic decline. Similarly, in the early days (1960s), the consumer group was not well educated, a factor which made them to earn less finances, hence they became price sensitive (Hoyer, MacInnis & Pieters, 2018). This price sensitivity made it hard for them to be able to purchase extravagantly, hence they considered price and quality before actually purchasing any given products (Du & Schultheis, 2015). On the consumers in the 1966-1976, during this period, consumers were well educated, hence they would earn high salaries, and have small families, and thus they did not have high expenditures on their families (Belk, 2010). This group therefore comprised of those who did not care about prices, and all they cared about was the quality of the product, and were willing to purchase, more products.     

         The third group is commonly known as the thirties group. This was a well-educated group, which spend more and saved less. They would therefore save less money, and spend more on entertainment (Du & Schultheis, 2015). In addition, this group did also spend a lot of money, as it was supposed to cater for their parent’s needs, children’s needs and to also cater for their needs. The final group is the wealthy group, which lives in urban areas (Hoyer, MacInnis & Pieters, 2018). This group is majorly attracted to foreign products, and is also willing to spend its money on premium quality products. This group is also motivated by what is trending in the market, and would do anything to purchase it guaranteed it is trending (Belk, 2010).   

Product Preferences

The Chinese are majorly attracted to products which they know are effective. It is therefore not easy for consumers to change their product preference, hence new products may take long before being accepted by the consumers (Du & Schultheis, 2015). This has been a very key external behaviour, whereby since the early 1960s, consumers have always been attracted to products which they have used and understand their effectiveness. Equally, they have since been attracted to cheap products, particularly from other countries. Based on the year, and the generation, different groups of Chinese consumers have been attracted to high quality and cheap products. On the other hand, consumers have been very specific particularly on the types of products which they have used, and they also understand how they work (Hoyer, MacInnis & Pieters, 2018).

In modern times, the Chinese are still attracted to dominant brands, hence they only purchase products which they know are of good quality (Lu, 2011). The wealthy, for instance, are more than willing to spend more on high quality products, and not on products which are not of good quality. However, due to the changes in economic conditions in the country, most of the consumers have opted to purchasing high quality products which are good and durable. In addition, they are not spendthrift, and they therefore concentrate on high quality products which can last longer, thus having them the cost of purchasing other items due to poor quality (Belk, 2010). Consumers have changed their purchasing behaviours, and are nor spending less on products, and saving more, hence they only focus on high quality products.

Subcultures

Consumer behaviours are majorly affected by subcultures in China, whereby the consumers uphold high cultural beliefs (Hoyer, MacInnis & Pieters, 2018). On the other hand, consumers who live in different geographical regions in China have different purchasing behaviours, based on what motivates them to purchase. For instance, the poor, and the less educated, who live in villages have different consumer behaviours as compared to those living in urban areas, are well educated, and are also rich. This consequently affects these two groups of consumer tend to behave particularly when purchasing different products (Belk, 2010).  

The rich, well educated, and rich who particularly live in urban, have since been extravagant and willing to spend more. On the other hand, the poor, less educated, and those who live in villages, tend to be price sensitive, and are not extravagant (Du & Schultheis, 2015). These subcultures have been brought about by differences in geographical regions and education level. Similarly, those who live in villages have a huge responsibility, due to the huge families which they have, as opposed to those who live in urban areas and have small families, thus they spend more on entertainment. As compared to the poor, the rich constitute 1.5 million of the country’s economy, hence making the overall purchasing power of the Chinese to be low, since the poor are more as compared to the rich, a factor which makes the country to experience low purchasing behaviours (Lu, 2011). 

Marketers have understood these external influencers, thus they have incorporated new influencers on their advertisements. For instance, marketers have come up with new methods of advertisements, which target the youths (Hoyer, MacInnis & Pieters, 2018). The use of the social media for marketing purposes has been embraced, particularly when targeting the youths who live particularly in urban areas. Due to the consumer behaviours of the youths who  live in urban areas, marketers are consequently using the social media as a means of advertising and also boosting the quality of certain products, thus making them to trend, since the youths are attracted to products which are currently in the market, and those products which are trending. Similarly, the thirties group has been greatly targeted by the marketers, through offering product promotions, which offer entertainment packages for the consumers (Belk, 2010). This therefore becomes one of the ways of luring the consumers, since they are adapted to entertainment, hence providing entertainment promotions enables them to increase the rate of purchases, thus boosting the number of sales of a given product.     

Product preferences is another consumer behaviour, which the marketers are exploiting. Marketers are introducing new products with similar effects and quality to the ones which are highly preferred. For instance, if consumers prefer a certain washing machine due to its efficiency and low price, new companies produce products with similar features, and effectiveness at lower prices, thus making the consumers to opt for the cheaper product (Lu, 2011). This has consequently seen more consumers shifting from their preferred products to other products. Nonetheless, subcultures are also being used by marketers in such a way which improves the number of sales of different products. For instance, marketers produce small and cheap products for the villages, whereas they produce huge products which are relatively expensive for those in towns (Du & Schultheis, 2015). This explains how the poor would end up purchasing more, as compared to the rich, because the poor purchase products in small quantities.  

Under these external influences, dominant companies have been very successful, thus being able to attract more and more customers as the years go by (Hoyer, MacInnis & Pieters, 2018). In addition, they have also been able to retain their customers, since the consumers are very loyal, and they consequently stick to products which are of high quality as compared to low quality products or products which they do not know about. On the other hand, new companies have not been successful with these external influencers, because consumers have not been able to see the need of moving from the marketers whom they have known for a very long period of time, and whose quality of products they understand (Belk, 2010). This is also a factor which has made it hard for new business to easily thrive in the country.

In order to improve the sales, marketers would need to understand the external influencers, thus being able to come up with strategies which can meet them (Du & Schultheis, 2015). Moreover, understanding what consumers are looking for is also significant, as it allows marketers to use it as a means of reaching the consumers (Lu, 2011). For instance, understanding what those in villages want if it is the quality of the product or its price, then marketers can produce cheaper products, hence being able to attract these consumers.

When it comes to age, marketers need to understand the age brackets of the consumers who can purchase, and impact their businesses for a long period of time (Belk, 2010). Secondly, they need to also understand what these consumers like, where they are likely to be at certain times, thus making marketing moves in such areas, advertising their products in areas where they are most likely to visit (Hoyer, MacInnis & Pieters, 2018). For example, if marketers believe the youths are the consumers who will impact their businesses positively in the future, then they should use the social media as a means of reaching them, and to find out what they like about the social media, thus using it as a means of reaching them. In so doing, business will grow in the country.

Conclusion

In conclusion, external consumer behaviours are significant, as they dictate the choices which consumers make. This is a factor which therefore drives the markets, thus making marketers to see different approaches and strategies, in order to attract the consumers to their products. However, as discussed in the paper, consumers are majorly influenced by what they believe in, and it is therefore the authority of the marketers to come up with ways of improving the sales and attracting the consumers to the products.

Reference

Hoyer, W. D., MacInnis, D. J., & Pieters, R. (2018). Consumer behavior.

Lu, P. X. (2011). Elite China: Luxury Consumer Behavior in China. Chichester: Wiley.

Belk, R. W. (2010). Research in consumer behavior: Vol. 12. Bingley: Emerald.

Du, W., & Schultheis, F. (2015). China's Westernization and its Impacts on Consumer Behavior: A Study of China's Wine Consumption. St. Gallen.

In Ng, S., & In Lee, A. Y. (2015). Handbook of culture and consumer behavior.

Mooij, M. K., & Mooij, M. K. (2010). Consumer behavior and culture: Consequences for global marketing and advertising.