I will attempt to outline below the key issues whether or not a multinational company is able to maximise its competitive advantage by controlling its own supply chain. Introduction There are many multinational companies which operate on such a high level worldwide such as Walmart, a multinational company is basically a corporation that is known to be registered in more than one country or that functions in different operations within a couple of countries. Multinational companies may consist of function between both procedures of selling goods or providing a service within different countries or continents. “Multinational companies, many of them extremely big, are today the most powerful agents of innovation” (Mattes, J. 2010) Production patterns have been known to drastically change significantly within the current economic globalisation. Many large multinational companies are known to compete against each other in there markets due to the increasing development of globalisation in the economy of countries. Many characteristics are mainly formed the implementation of supply chain management. A supply chain is basically the network which has been created amongst different companies producing, distributing or handling a specific product. In detail the supply chain takes upon the steps to get goods or services from the supplier to the customer. It is very important that supply chain management is composed correctly for multinational companies; most companies will strive to have an enhanced supply chain as it will normally tend to translate efficiently in lowering the costs for a company. “It is now apparent that the supply chain is the main artery of all businesses” (Poirier, C. C. 1999) Poirier stated how important the supply ch... ... middle of paper ... ...bility and eliminated all the uncontrolled factors of staff shortage. When Walmart deliver its inventory it is known as customers by the distribution centres, cross docking is something what Walmart use very cleverly as this technique allows to reduce costs of handling operations and cutting down any storage of an inventory. “Walmart’s supply chain management has over 40 distribution centres” (Batten, L. 2008). Techniques implied by Walmart allowed them to take orders placed by stores and promoting them to ties they may already have with manufacturers, which would then give the chance for manufacturers to agree to their services they have proposed of refuse as there may be a non-availability of the goods at a certain time period. The result of this cross ducking allowed eradicating the warehousing process, and operates on demand chain rather than the supply chain
The purpose of supply chain is to improve overall performance of a business. Whether organisation is functioning national or worldwide the competition is always increasing and offering products at the lowest possible cost with the best possible customer service is a way to ensure market share.
Certainly, X1 also knows the disadvantages for their supply chain and makes some special change for the disadvantages and reduces those problems effectively. Therefore, this is their Opportunities for supply chain to become better than before.
A supply chain is a system through which organizations deliver their products and services to their customers. The network begins with the basic ingredients to start the chain of supply, which are the suppliers that supply raw materials, ingredients, and so on. From there, it will transfer the supplies to the manufacturer who builds, assembles, converts, or furnishes a product. The chain now needs to get the product to the consumer by transporting the finished product from the manufacturer through a warehouse or distribution center. An example is that Wal-Mart has a nearby distribution center where products are delivered there and then split up to be delivered to a retail Wal-Mart. “Wal-Mart will take responsibility for breaking down larger loads and delivering the product to other Wal-Mart stores” (Ehring 1).
Challenges of global supply chain management: some of the global supply chain managements biggest challenges are as follows (Anderson, 2016):
The business environment is increasingly becoming competitive and challenging. In the recent past, manufacturers have found themselves facing the threat of dwindling profit margins due to unfortunate global events such as the 2007 global financial crisis and the on going Europe economic crisis. The need to improve operation efficiency so as to ensure current and future investment yield the highest rate of return has therefore become extremely important. Manufacturers are now actively engaged in, managing their costs, Research and Development, adopting best procurement strategies, among other Actions. While such actions might eventually lead to positive results, additional business value can be achieved through proper management of the supply chain (Waymer, Ivanaj & Mussa 2009; Krivda 2004).
Despite the adumbrated achievement, the supply chain management strategies employed by Walmart have experienced some challenges. The first one is the evolution of the standards of the technologies that are used globally. These are always becoming advanced, and the company has to keep up with them to be able to stay ahead of the pack.
In today’s competitive advantage firms which excel have to go achieve cost reduction, quality and delivery improvement, cycle time reduction, improved customer service and competitions from the market. As the organizations are looking for new ways to achieve competitive advantage and development global strategies and approaches become an attractive option. Many of the world top companies are going for the global sourcing strategies in order to reduce cost and in order to improve the performance of their global supply chains.
The organization has had to ensure that it has retail stores in many countries globally and website options in more than 100 countries. The company further enhances access of online stores in more than 37 countries which is accessible all the time and people are able to access the services regardless of their location. Globalization further affects the organization in the sense of international market management which requires it to engage in strictly global decision making. The organization’s production networks have been geared to enhancing global competition (Lüsted, 2012) .The Company is further good when it comes to seizing the opportunities available in global market. For the organization to find efficient as well as cheap means of production, it has to bargain hard so as to allow its contractors to have low profits. This mostly is consequential to the suppliers cutting corners with the use of cheap
Wal-mart has been able to achieve respectable leadership in the retail industry because of its focus on supply chain management. Discuss in detail the distribution and logistics system adopted by Wal-Mart.
Today, many companies enter the global market, and some companies have become extremely successful in the global marketplace and others still struggling. In Theodore Levitt’s article “The Globalization of Markets”, he states that a well managed corporation focuses on selling standardized products with high quality and low priced instead of focuses on selling on customized products with high cost. Levitt defines the differences between multinational corporation and global corporation, and adopts many specific examples to proves his view. He defines the multinational corporation who operates in many countries and adjust its product based on the taste of specific region. This will result in a high cost to produce the product because company have to input more resource into each individual product. However, global corporation sells similar product worldwide at relative low cost. According to Levitt, the cultural differences are becoming more and more “homogenized”; therefore, becoming a global corporation will lead to the successful of the company in the global market.
To be more simply, any company that gained a quarter of company’s revenue comes from domestic are called multinational corporations. These are firms that practice corporate ownership beyond national borders. Through managing and production of goods, services and the proper allocation of resources in more than one country. There can be divided into two main types to describe an MCN (multi-national-corporation), most MCNS are running from headquarters in one country, with their facilities running in other countries. Another type of operations running is with the Parent company running in one country whilst having subsidiaries running globally. In more recent times, multinational corporations have grown in power and visibility, but have come to be viewed more ambivalently by both governments and consumers worldwide. Indeed,
Multinational Strategy: Basically focuses on the tastes of local bazaar. The participation of company in a number of local bazaar besides its national market. Hence a particular strategy should be adopted to cater to the needs of each different country considering its consumer needs. This leads to a competitive advantage in each different country.
The global economy enables all sizes of businesses to connect with foreign companies. For example a U.S. based store can import material from companies in china through the web on a website called Alibaba.com. Managers are affected by globalization because it changes the planning function of the 4 factors of management. Rather then only focusing on domestic operations, managers must now look into opportunities brought by global partners. Also global companies can drive competitive forces into the domestic marketplace. If consumers can order cheaper products directly from foreign suppliers, domestic managers will need to use the controlling function to adapt to these competitive forces that are
Lean manufacturing and just-in-time processing are great business strategies that can severely stress a supply chain. The supply chain and supply chain management is a critical operations management element for any major company to succeed and remain competitive in the global market. The supply chain is one of many pieces critical to maximizing value to the end customer and requires close management to minimize external impacts. If a company is relying on another company to supply the raw materials needed for their production line, then impacts to this other company could impact their supply chain. Careful risk management is needed to optimize performance. As a company expands into global markets and global suppliers, this risk and management challenge is multiplied. The global nature of the company could impact important activities such as transportation, funds transfers, suppliers, distributors, accounting and information sharing. Disruption to the supply chain can significantly reduce revenue, cut market share, inflate costs and threaten production. A major disruption would have obvious impacts to profit, but could have additional intangible impacts to the credibility of the company if products are not delivered on time.
Nowadays, business is set in a global environment. Companies not only regard their locations or primary market bases, but also consider the rest of the world. In this context, more and more companies start to run multinational business in various parts of the world. In this essay, companies which run multinational business are to be characterized as multinational companies'. By following the globalization campaign, multinational companies' supply chains can be enriched, high costs work force can be transformed and potential markets can be expanded. Consequentially, competitive advantages of companies can be strengthened in a global market. Otherwise, some problems are met in the changed environments in foreign countries at the same time. The changed environments can be divided into four main aspects, namely, cultural environment, legal environment, economic environment and political system problems. All the changed environments make problems to multinational companies. In particular, problems which are caused by changed culture environment are the most serious aspect of running a multinational business. This essay will discuss these problems and give some suggestions to solve them.