Concepts that shape the supply chain

The market
Business strategies are usually long term plans usually for a period of 3-5 years. The plans are concerned with major resources in the company and business activities.

The market is the interactions of suppliers, customers, economic factors, technology that affect competition in any industrial factors/frameworks, which include:

  • Demand Variation – It influences the stability and consistency of manufacturing in terms of quantity/quality.
  • Product Life Cycle – They continuously get shorter in response to change in trends.
  • Market mediation cost – Costs resulting from imbalance of the market, where supply is more than demand and products have to be sold at throw away prices.
  • Competition (Unique Value Proposal) – For a firm this is how it is considered as a relevant option by customers and also how it differentiates itself from competitors, so as to have a bigger customer base making it stand out. This can be done by:
  1.  Product improvement.
  2.  Product differentiation.
  3.  Advertising and promotion.
  4.  Product pricing.
  5.  Product availability.
  6.  After sale services.
  7.  Innovation and quality.
  • Management Focus – This is linkage between supply chain processes and business strategies by matching both sets of growth and ensuring that none overlaps/under laps the other.
  • Firms Internal Processes – This is coordination of various functions of organization interact with supply chain activities.

It is also how a firm ensures proper connection and combination of supply chain activities e.g. sourcing, delivery, customer needs etc.

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