Chain Model for Competitive Advantage Term Paper

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SAMPLE EXCERPT:

[. . .] (Burt, Starling and Dobler, 39-117)

Growth by Product Extension

The organization can also opt for enhancing its growth through product extension. This strategy would enable the organization to increase its sales revenue in an evident manner. In addition to that it would also enable the organization to explore new directions in which it can move its products. (Burt, Starling and Dobler, 39-117)

In addition to that, through the strategy of product extension the organization may introduce new product lines. The introduction of new product lines may enable the organization to diversify its risks and enhance its revenue in an effective and appropriate manner. (Burt, Starling and Dobler, 39-117)

Furthermore, the strategy of product extension has an influential and positive impact on the consumer base of the organization. This is because it enables the organization to attract a wide number of consumers who have varying tastes and preferences. (Burt, Starling and Dobler, 39-117)

This, as a result, increases and expands the potential target market as well as the market share of the organization. This strategy expands the supply chain of the organization and also enables the organization to have strong and reliable relations with its retailers as well. (Burt, Starling and Dobler, 39-117)

Question 3: To what degree do the alternatives in Question 2 fit the company's core competencies, and to what degree do they defocus the company away from its core competencies?

The approach of vertical integration may benefit the organization the most as it is most strongly aligned with the core competencies of the organization. This is because the organization already has a very supply chain and enjoys global capabilities of producing and distributing the goods. (Burt, Starling and Dobler, 39-117)

The process would enable the organization to use these capabilities to further enhance its growth. In addition to that, the strong workforce of the organization would also enable it to appropriately handle the supply and value chain by getting indulge into them and eliminating unnecessary elements from these chains. (Burt, Starling and Dobler, 39-117)

The only drawback that the organization might face due the process of vertical integration would be the reduction in the number of suppliers. This reduction in the number of suppliers would reduce the competition that exists between them and would have a deteriorating impact on the bargaining, negotiating and pricing power of the organization. (Burt, Starling and Dobler, 39-117)

The prospect of growth through acquisition is very time consuming and expensive as well. This is because the acquisition of another organization may require Crocs to invest huge amount of money on the transaction. But the long-term return, which may be provided by this strategy, is very high. (Burt, Starling and Dobler, 39-117)

In addition to that, after the acquisition of the enterprise, Crocs and its management would be required to perform a number of tasks so that they be able to reap all the possible benefits of the acquisition. These tasks may include alteration of infrastructure, reengineering of processes and training and development of the employees. (Burt, Starling and Dobler, 39-117)

The approach of product extension also aligns with the core competencies of the organization. This is because the organization has a large and flexible supply chain, which might enable the organization to produce and distribute the new product in an effective and easy manner. (Burt, Starling and Dobler, 39-117)

In addition to that, the organization also shares strong and reliable relations with the small retailers. These retailers will market the new product and will position this product appropriately in the minds of the consumer and hence enhance the potential target market for the organization. In addition to that, the retailers would also provide the organization will test marketing services and feedback in relation to the new product. (Burt, Starling and Dobler, 39-117)

The two important and evident drawbacks of this approach are the high time and money consumed on research, development and production of the new products and the deteriorating impact that the sales of the new product might have on the sales of the existing products of the organization. On the basis of these drawbacks the organization might avoid using the 'growth by product extension' strategy for the further enhancement of its growth and profitability. (Burt, Starling and Dobler, 39-117)

Question 4: How should Crocs plan its production and inventory? How do the company's gross margins affect this decision?

The organization shall plan its production and inventory on the basis of the demands and needs of the consumer. In other words, the organization must have high production and inventory during high sales seasons and low production and inventory during low sales seasons. (Staff of Cognizant 2-20)

This can be accomplished through the deployment of highly advanced technological equipment. As the advanced technological equipment enables the organization to effectively produce the number and range of products necessary to meet the needs and demands of the customers in an effective manner. In addition to that, the organization would also require an effective and flexible supply chain and a strong and skilled workforce. (Staff of Cognizant 2-20)

All of the above mentioned variables depend heavily on the gross profit of the organization. This is because the higher the gross profit, the higher would be the ability of the organization to incur all the expenses that would be required for the implementation of the above mentioned decisions in relation to the inventory and production of the organization. (Staff of Cognizant 2-20)

Conclusion

Crocs has a great potential for the further enhancement of its growth. Through the deployment of effective strategies for growth, the organization can attain higher rates of growth. In addition to that, another important factor that might enable the organization to enhance its growth is the effective decision making in relation to its inventory and production. Another critical success factor that the organization must keep under consideration is to abide by the basic values, which acted as the foundation for the growth and profitability of the organization.

Works cited

Burt, David N, Stephen L. Starling and Donald W. Dobler. World class supply management. Boston: McGraw-Hill/Irwin, 2003. Print.

Staff of Cognizant. Five Strategies for Improving Inventory Management across Complex Supply Chain Networks. Teaneck: Cognizant, 2011. 2-20.

Stanford Graduate School of Business. Crocs: Revolutionizing an Industry's… [END OF PREVIEW]

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