Potential Advantages and challenges in International Business Strategy.pdf

Outbound logistics similar to suppliers customers

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Outbound logistics Similar to suppliers, customers have been granted access to the company web site ( ) and to order on- line. The order information is then sent to pro-
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The Journal of Global Business Issues – Volume 6 Issue 1 25 duction and delivery people responsible for the sales. However, only existing customers have the accounts and passwords on the site. In other words, new business customers still need to firstly contact the company by phone, e-mail, or physical mail. This facility is more complicated for overseas buyers as the web site is only partly written in English. Business buyers contribute larger shares to the company’s sales than individual custom- ers. As the competition is getting stiffer, the de- livery of final products from the factories to the buyers really plays an important role in satisfy- ing customer needs. For instance, KFC outlets require that all chicken be the same in size and quality, and all deliveries be done timely. The use of ICT again helps the process, both by in- creasing the quantity and the quality of products delivery. The provision of customer access and on-line order has indirectly built a database to be used in customer relationship management. Subsequently, on-time delivery can be achieved since the operations centers receive the order information simultaneously and then include the demanded products in the production plan and process. Trend and seasonal analysis is also ena- bled by SAP CRM, ERP, and Analytics. CPI used to be the firm selling the best agricultural products, especially poultries and feeds. However, this advantage has eroded ow- ing to the quality convergence of technology and competitors moving towards better management and service. Several decades ago, the machiner- ies were exclusively possessed by CPI and the market was not as big as it is now. Barriers to entry are not high either, attracting some other big players to enter to the industry and take cer- tain proportion market share. The circumstances force CPI to shift its strategic options from “best product” to “customer solutions.” Figure 4 : CPI’s Strategic Options Source: Chen, S. 2005. Strategic management of e-business , 2 nd ed. Sussex: John Wiley and Sons. In this case, lock-in the market seems difficult, if not impossible, since: (1) dominant design is not difficult to copy, (2) competitors can easily enter the industry, (3) there are a myr- iad of suppliers such that locking them in tends to be difficult, and (4) nor many complementors are found in this industry. One advantage of CPI over other competitors is that CPI can sell the feeds to its own poultry farms, ensuring large quantity of internal sales. Nevertheless, the management has been highly concerned about the quality and professionalism on account of decentralised authority it has. Should the poul- try farms find that feeds from other companies are better or quicker in delivery, they are allowed not to purchase from CPI Feeds Division. Hence, the feeds business has to strive to continuously
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