Competitive and Supply Chain Strategies

We can also contrast Blue Nile, with its online retailing model for diamonds, with Zales, which sells diamond jewelry through retail outlets. Blue Nile has emphasized the variety of diamonds available from its website and the fact that its margins are significantly lower than its bricks-and-mortar competition. Customers, however, have to wait to get their jewelry and do not have any opportunity to touch and see it before purchase (Blue Nile does provide a 30-day return period, though). At Zales, in contrast, a customer can walk into the retail store, be helped by a salesperson, and leave immediately with a diamond ring. The amount of variety available at a Zales store, however, is limited. Whereas Blue Nile offers more than 90,000 stones on its site, a typical Zales store carries fewer than a thousand. 

To execute a company s competitive strategy, all these functions play a role, and each must develop its own strategy. Here, strategy refers to what each process or function will try to do particularly well. 

Finance, Accounting, Information Technology, Human Resources  

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To see the relationship between competitive and supply chain strategies, we start with the value chain for a typical organization, as shown in Figure 2-1. 

The first step in achieving strategic fit between competitive and supply chain strategies is to understand customers and supply chain uncertainty. Uncertainty from the customer and the supply chain can be combined and mapped on the implied uncertainty spectrum. 

Effective supply chain management is no longer an option it is a requirement for survival. Companies within the supply chain must reach new levels of communication and cooperation. Rather than treating each other as adversaries and attempting to gain competitive advantages at the expense of each other, companies with effective supply chain strategies are able to break... 

This section aims at evaluating the current strategic supply chain orientation for a customer segment and, in a first step, some basic questions are presented to prepare the reader for the actual determination of the supply chain strategy. In a second step, the concept of competitive priorities is explained in order to describe the current supply chain strategy of a company. Finally, the strategic supply chain orientation is evaluated. 

Second, the assigned weights to each of the competitive priorities in the first part of Table 9.2 are added up and the fraction is translated into a percentage as shown in the second part of the table, indicating the strategic importance of each of the competitive priorities . In this specific example, cost at 50 % is ranked as the most important indicator to characterize the current supply chain strategy followed by quality, lead time and, finally, flexibility. 

In a next step, the table checks to detect performance metrics especially relevant to the operations of the company which are not covered by the supply chain strategy and the corresponding competitive priorities filters. If there are additional performance metrics which need to be taken into account, they should be added to the existing list. 

Describe the appropriate apphcations of supply chain strategies and processes to achieve competitive advantage ... 

Zara s rapid and sustainable growth in a competitive market is attributed to its ability to establish an agile supply chain which also incorporates many lean characteristics. There is a success story of a combined lean and agile supply chain strategy. 

Describe how a company achieves strategic fit between its supply chain strategy and its competitive strategy. 

Discuss the role of each driver in creating strategic fit between the supply chain strategy and the competitive strategy. 

Phase I starts with a clear definition of the firm s competitive strategy as the set of customer needs that the supply chain aims to satisfy. The supply chain strategy then specifies what capabilities the supply chain netwoik must have to support the competitive strategy (see Chapter 2). Next, managers must forecast the likely evolution of global competition and whether competitors... 

Based on the competitive strategy of the firm, its resulting supply chain strategy, an analysis of the competition, any economies of scale or scope, and any constraints, managers must determine the broad supply chain design for the firm. 

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