Operations and Supply Chain Strategies

Internal Assignment

June 2023 Examination

Q1. List down the competencies needed for an efficient global Operations and
Supply Chain. Which competency would you highly prioritize if you are a
producer of a semiconductor, which has a global demand in today's scenario?
Justify?

Ans 1.

Introduction

Global supply chain management generally refers to all processes regarding a

product’s lifecycle, from the concept of its creation to distribution to endpoints. Global
SCM is aimed to enhance the productivity of each stage of this lifecycle, get rid of
inefficiencies, and deliver the products timely and seamlessly. Supply chain
management (SCM) is a new approach to satisfy customers of products and
services via an integrated management for the whole business processes of the
manufacturing from the raw material procurement to the product or service delivery
to customers. With the rapid development of the information technology and global
market environment the company is required to manage whole supply chain network
to gain the competitiveness in business. Typically semiconductor industry is the one
whose supply chain network is distributed all over the world, and its manufacturing
process has the particular characteristics which have to be considered in the
modelling of supply chain. Integration, operations; purchasing and distribution are
the four elements of the supply chain that work together to establish a path to
competition that is both cost-effective and competitive.

A supply chain is a complex system made up of people, processes and technologies

that is engineered and managed to deliver value to all involved. Supply chain
management (SCM) covers all aspects of product motion from the supplier’s supplier
to the customer’s customer; and everything from production and product
development to the information systems needed to direct these undertakings toward
sustainability and the creation of a more circular economy.

Concept and Application

1.    Capacity Planning

 Assuring that needed resources (e.g., manufacturing capacity, distribution centre
capacity, vehicles, etc.) will be available at the right time and place to meet logistics
and supply chain needs. In other words, capacity planning focuses on determining
the appropriate production levels the company can complete. This also includes
capacity planning with suppliers at all manufacturing cells and also critical
machine/equipment; this also includes overall Equipment Effectiveness (OEE)
and Sales Inventory & Operations Planning (SIOP).

2.    Demand Management 

Demand management is the process of determining what customers will purchase

and when, in other words predicting demand. Good demand management uses
qualitative and quantitative methods to use customer data to reduce uncertainty, and
predict short-term incoming demand for use as input into the Sales, Inventory, &

Operations Planning (SIOP) process. The competency includes using high analytical
techniques; excel spreadsheets and maybe software to generate baseline statistical
forecasts. In my view demand management is one of the most important Supply

Chain competencies. Demand management strategy is the process of analyzing the

key trends and dynamics in the industries and markets. The objective of this analysis
is to identify cost trends, technology trends and potential structural changes in the
market and associated risk factors. This analysis will provide direction for the design
of supply chain strategies.

3.    Order Processing 

Out of all supply chain competencies, Order Processing is the most underrated
competency. Order processing entails the system that an organization has for getting
orders from customers, checking the status of orders, communicating with customers
about them, and actually filling the order and making it available for customers. In
some businesses, it also includes processes until invoicing. 

Part of the order processing includes checking inventory status, customer credit and
accounts receivable in some businesses. Because the order processing cycle is a
key area of customer interface with the organization, it can have a big impact on a
customer’s perception of service and, therefore, satisfaction. The knowledge and
skills are necessary to manage the receipt and scheduling of customer orders.
Processes included in this competency include standard order receipt, exception
identification, and exceptional resolution.

Key to the success of this function are

a) the ability to work effectively with customers to clarify requirements and

negotiate solutions when constraints exist, and

b) the ability to work effectively with other company functions to assess the
ability to meet customer needs and to develop workaround solutions when
necessary. 

4.    Master Production Scheduling

 The Master Production Scheduling is a statement of the anticipated manufacturing

schedule for selected items by quantity per planning period (Fogarty and Hoffman
1983; Higgins and Tierney 1990). It is a response to the forecast demand described
by the production plan and the actual demand in terms of received customers’
orders. This supply chain competency also includes the evaluation of plant capacity
effectively, attaining the strategic objectives of the business as reflected in the
production plan. Unlike a forecast of demand, the master schedule represents a
management commitment, authorizing the procurement, manufacturing, or materials
in most cases.

5.    Inventory Management & Optimization

 Inventory management is the practice to manage inventory as working capital. The

key objective of inventory management is to increase corporate profitability through
improved inventory activities such as demand planning, inventory optimization,
safety stock management, excess and obsolete inventory management or the right
inventory levels to meet customer services expectation with a minimum possible
inventory.

6.    Materials Replenishment Planning

The main function of material requirements planning is to guarantee material

availability, that is, it is used to procure or produce the requirement quantities on time
both for internal purposes and for sales and distribution. This process involves the
monitoring of stocks and, in particular, the automatic creation of procurement
proposals for purchasing and production.
In doing so, material requirements planning tries to strike the best balance possible
between

 Optimizing the service level and

 Minimizing costs and capital lockup.

The material requirements planning process needs all the information on stocks,
stock reservations, and stocks on order to calculate quantities, and also needs
information on lead times and procurement times to calculate dates. The material
requirements planning define a suitable MRP and lot-sizing procedure for each
material to determine procurement proposals. This supply chain competency
includes the ability to take the Master Production Schedule replenishment quantities
and “explode” quantities through the bill of materials to create component
requirements, which are compared against on-hand and on-order and forecast.
Purchasing or manufacturing orders are subsequently planned and either placed or
deferred by pull in or push out messages.

7.    Logistics, Warehousing and Distribution 

One of the key supply chain competences is to manage physical flow of goods,
which mean the knowledge and skills necessary to effectively manage logistics
communication, warehouse and storage management, material handling and
distribution of goods (including reverse logistics). This includes activities like Goods-
in (receiving), put-a-way to stores, picking, packing, shipping and managing return
goods from the customer. The competency includes the knowledge and
understanding of the above-mentioned activities, creating the right processes as well
effective application. 

8.    Knowledge of Continuous Improvement Processes or Methods 

As the name suggests, knowledge of the processes or methods that seek to improve
performance, which assumes more and smaller incremental improvement steps. In
general learning and implementing the best known of these are the
aforementioned: lean manufacturing (JIT), Six Sigma, Lean Six Sigma, and Agile. 

By learning these philosophies, it is not the rate of improvement which is important; it

is the momentum of improvement in the area you want to improve.  5S Kaizen
Guide to eliminate the clutter with Sort, arrange with Straighten, sparkle with Shine,
create a proper guideline with Standardize, and inspire with Sustain.
9. Strategic questioning: An efficient international operations and delivery chain
team must think strategically and make choices that align with the company's
average goals and targets. They have to be able to assume and plan for future
demand and align their techniques with the market's desires.

10. Cross-functional Collaboration: A successful operations and delivery chain

group must work correctly with other groups inside the enterprise, such as income,
marketing, and finance. They need to communicate effectively and collaborate to
achieve common goals.

11. Analytical competencies: The group needs to be able to research

complicated statistics and make informed choices based on that information. They
must be able to identify trends, make forecasts, and use statistics to optimize
operations and supply chain strategies.

12. Technology Savvy: In today's digital world, the operations and delivery chain
crew must be proficient in today's generation tools and software programs. This
helps them to streamline processes, reduce charges, and enhance efficiency.

13. Adaptability: An efficient global operations and supply chain group should
adapt to converting market conditions and customer wishes. They have to be able to
quickly adjust their strategies and processes to satisfy the marketplace's needs.

14. Cross-cultural Competence: In a global market, the operations and supply

chain team needs to have past-cultural competence. They must paint effectively with
people from different cultural backgrounds, apprehend their needs, and adapt their
communication and business practices.

15. Supply Chain risk control: a good operation and delivery chain team should
be able to perceive and manipulate supply chain dangers, such as disruptions,
geopolitical hazards, and natural disasters. They must be able to develop
contingency plans and take proactive measures to mitigate these risks.

Student prespective

I would prioritize analytical abilities and demand management if I were the

semiconductor manufacturer with a global call. The semiconductor enterprise is
complex and requires a deep knowledge of market developments, demand patterns,
and delivery chain processes. Analytical abilities could assist me in analyzing
marketplace facts, forecast demand, and optimizing the supply chain processes.
This will allow me to reduce prices, enhance performance, and live competitively
globally. In the end, efficient global operations and supply chain teams require
various talents. Strong attention to analytical abilities is essential for success within
the semiconductor industry. By leveraging those capabilities, groups can enhance
efficiency, reduce fees, and stay ahead of the opposition within the global market.

As a right away consequence, an extraordinary deal of stress is placed on

businesses to fabricate things that conform to these guidelines. The delivery chain
for semiconductors includes numerous levels, from the acquisition of uncooked
materials to the shipping of the finished product. It entails tight coordination between
a few of the countless parties participating. The degrees of the delivery chain for
semiconductors are as follows: (providers, manufacturers, vendors, and give-up
customers).

It is vital to successfully manage the supply chain in order to maximize sales and
reduce risks, as well as ensuring that issues are transported to clients in a timely and
efficient manner. This will ensure that the chain is efficiently managed. This will be
finished by having green management of the supply chain. An effective management
system for the supply chain is one way to acquire this goal.

Conclusion

Developing a coherent global supply chain and operations management strategy is

clearly a complex process—one that requires managers to make a complicated and
highly interwoven set of decisions. To develop and implement viable global
operations and supply chain strategy, firms can focus on six key capabilities.

o An effective global, integrated sales and operations planning process for key
markets to ensure the firm’s customer service, cost, and time objectives are
met
o A procurement, manufacturing, distribution, and research and development
network designed to deliver a quality product, in the scheduled timeframe, at
the right price
o Tight links with the firm’s customers and suppliers so it can better predict the
demand for its products, gauge customer service levels, and reduce working
capital and cost of goods sold.
o Logistics partnerships to ensure the firm’s efforts to source products from low-
cost markets and to penetrate new markets are efficient and timely
 o The ability to recruit low-cost suppliers effectively and to ensure their efforts
are aligned with the firm’s service objectives
o A “go-to-market” strategy, which is a firm’s plan to provide value to its
customers by using the firm’s internal and external resources. For emerging
markets, this strategy involves decisions such as the number and type of
products offered; wholesalers, distributors, and retailers to be used; and
whether the products should be produced in-house or purchased from an
outside vendor. Learning these philosophies, it is not the rate of improvement
which is important; it is the momentum of improvement in the area you want
to improve.  5S Kaizen Guide to eliminate the clutter with Sort, arrange with
Straighten, sparkle with Shine, create a proper guideline with Standardize,
and inspire with Sustain. Semiconductor manufacturers need to prioritize
supply chain management due to the cutthroat nature of the industry and the
rapid tempo of technological advancement. This is because of the nature of
the semiconductor marketplace, which is characterized by excessive
opposition. That is because of the sector's character, which is marked by
using an extreme degree of competitiveness among its many participants.
This entails cultivating stable relationships with providers and vendors,
enforcing superior inventory control structures, utilizing technology to allow
real-time monitoring and visibility, and always comparing and enhancing the
supply chain's average efficiency.

Q2. Online fashion retailer Zalando to lay off hundreds of employees. Google
fires 450 staff, Twitter shuts 2 offices; Meta confirms 11000 layoffs etc. If you
are one of the founders of service industry which steps you will take with
respected to industry life cycle?

Ans 2.

Introduction

The Competition Act, 2002  is a law that governs commercial competition in India. It
replaced the erstwhile Monopolies and Restrictive Trade Practices Act, 1969. 

The Competition Act aims to prevent activities that have an adverse effect on
competition in India. The Competition Act 2002 was enacted by the Indian
Parliament to change the Restrictive Infrastructure and Illegal Trade Practices Act
1969. The Indian Competition Law Administration is active. After the implementation
of the Competition Law 2002 (the "Law"), it was changed two times by him, the
Competition Law 2007 (Modification) and the Competition Law 2009 (Amendment). It
makes it possible to establish competition compensations and actions to forestall
profound practices and advertise aggressive competition in the Indian market.

Concept and Applications

As a founder of a provider enterprise, the modern fashion of agencies laying off

employees due to numerous reasons, including automation, downsizing, and
restructuring, indicates that the industry is going thru a segment of decline or
maturity in the enterprise life cycle. To cope with this example, I might take the
subsequent steps:

1. Innovate: one of the approaches to cope with the decline stage of the
industry life cycle is to innovate and find new ways of delivering offerings that cater
to the changing needs of the marketplace. This may be accomplished by investing in
research and development, upgrading era and gadgets, and adopting new business
models. Innovation can be in any of the 4 Ps of ‘marketing. In connection with the
product, it would mean quality improvement or improvement in features (e.g.
introducing piano key type controls for table fans) or even style improvements like in
case of clothes where collars are changed from time to time because of the fashion
life cycle. Ultimately a time may come when the product will have to be removed
from the product mix.

2. Diversify: another method that can be followed is diversifying the services

offered. This could be done by identifying new markets and client segments,
exploring new geographies, and imparting new offerings that complement the
existing ones.

3. Optimize Operations: to improve efficiency, lessen fees, and grow

profitability, I would like recognition for optimizing the operations of the carrier
enterprise. This can be achieved by streamlining strategies, enhancing supply chain
control, and leveraging generation.

4. Talent Retention: To retain high-quality skills within the company, I would

focus on supplying conducive work surroundings that foster innovation, collaboration,
and creativity. Providing education and development packages, bendy work
arrangements and performance-based incentives also can help preserve pinnacle
talent.
5. Economies of Scale
When firms become more efficient in large-scale production, the total production cost
increases but their cost per unit declines. This is achieved by using competent
machinery and procuring raw material in bulk, at a discounted price. Although there
is an increase in production and raw materials, the firm’s fixed cost remains the
same. Therefore, the fixed cost distributes evenly across the entire output.
Ultimately profit margin increases. In contrast, small businesses price their goods or
services higher than large organizations—low scalability. After all, small businesses
cannot afford discounts—the cost of production is high. In addition, most small firms
employ labor-intensive processes instead of machinery, inflating their per-unit cost.
Similarly, some businesses do not get discounts due to low purchase volume. Up
scaling resolves all such issues. Example: Supermarkets are the most common
example of economies of scale. Since they buy goods in bulk, they avail discounts.
Therefore, they enjoy the benefit of reduced average cost.

6. Mergers and Acquisitions

Mergers and acquisitions (M&A) are strategic alliances between two or more
companies. In mergers, companies join hands to create a new firm by pooling their
assets and resources. In acquisitions, They are carried out for various reasons. First,
M&A improves the quality of corporate performance by reducing the redundant cost
of operations. Its other benefits include elimination of excess workforce, growth
acceleration, technology, and the procurement of new talent. By merging or
acquiring firms, companies overcome competition, attain economies of scale,
acquire a monopoly, and multiply profits.however; one organization buys more than
51% shares of the other business entity.

7. Competitive pricing
Competitive pricing is the process of strategically selecting price points for your
goods or services based on competitor pricing in your market or niche, rather than
basing prices solely on business costs or target profit margins.

8. Alternative uses of products

Through innovative ideas the survival in the industry can be assured by making the
product useful in alternative ways. Example: minute maid where it changed its
strategy from just making it use for tea and coffee it advertised it as sweet maker
which increased its sale and consumption across the country.

9. Promotional Expenditure
The promotional expenditure can be reduced as the product is in maturity stage and
has sufficient customer base. Product and service-based businesses, develop short-
term promotional campaigns that directly respond to customer needs, or add-on gift
cards to lock-in future sales.

10. New or niche product line

The market niche defines the product features aimed at satisfying specific market
needs, as well as the price range, production quality and the demographics that it is
intended to target. It is also a small market segment. Sometimes, a product or
service can be entirely designed to satisfy a niche market.

11. Penetrate new market segments

Expand streams of revenue Consider new ways to increase your income and
alleviate predicted financial loss. In the restaurant industry, adapt to social distancing
measures by offering curbside pick-up, delivery, or take-home meal packages
featuring your top-selling drinks and entrees. .

12. Extend employee roles

To reduce overhead costs, it may be beneficial to pause outsourcing talent for jobs
that can be done in-house. Small businesses can often redistribute employee
responsibilities when in a financial crunch to minimize non-productive time, or NPT,
and keep your employees on payroll. For example, instead of contracting a technical
writer for your website, you may be able to assign copywriting to your in-house
marketing team.

13. Put Promotions and Raises on Hold

Unless critical to your business, halt all promotions. If they are necessary from an
operational continuity perspective, communicate to the promoted employee that they
will experience a change of title and responsibilities, but they will not receive a salary
increase until financial conditions improve. And to save immediate payroll costs,
place salary adjustments and merit-based increases on hold as well. If you have pay
equity adjustments deemed critical, move forward with those. For non-sales staff,
halt all incentive payments immediately. Communicate these changes to your
employees, explaining that to save jobs, the business must be as lean as possible—
therefore, bonuses must be sacrificed.

14. Evaluate Your Company’s Top Performers

Careful research across different jobs and industries has highlighted a clear pattern:
The payoff from employing top talent increases as a function of job complexity. So
for jobs that are mildly complex, top employees outperform average employees by a
median margin of about 85-100%. And for highly complex jobs, such as senior
leadership roles, the contribution of top performers is more than double that of the
average performer. Talented employees can also act as "force multipliers" and raise
the performance bar for their colleagues. Simply adding a star performer to a team
boosts the effectiveness of other team members by 5-15%.
Now more than ever, companies will need to locate and use their best employees.
Through technology like talent management systems or via regular conversations
with team leaders and managers, organizations should collect and track
performance data on their workforce. So if and when a company needs to make
workforce planning decisions, they know which workers to keep around to help them
survive.

In summary, as a founding father of the carrier industry, I take a proactive approach

to cope with the decline or maturity section of the industry life cycle. This would
involve innovating, diversifying, optimizing operations, and retaining pinnacle
expertise to remain competitive and ensure lengthy-term sustainability.
This would want us to increase the size of our personnel and the scope of our
activities, each of which would increase the quantity of cash we spend.
Notwithstanding this, the primary consciousness may be establishing a solid basis
for continuous improvement in the future.

If the enterprise is already at the extent of maturity, my priority could be to shield our
market percentage and locate extra sales resources as a buffer in opposition to the
potential that the call for would decrease. I'd spend money on innovation to generate
new services or items that appeal to an extra substantial customer base. The
execution of the cost-optimization strategies supposed for utilization would not result
in a decline in the quality of the offerings provided in any way.

Suppose the industry is now in a downward fashion. In that case, I will focus the
sizable emphasis of my work on reorganizing the company to save charges and
increase the efficiency of its operations. I would investigate the possibility of entering
new markets or locating niches inside contemporary markets where we deliver
unique services and differentiate ourselves from other firms. Further, I would inspect
the possibility of extending into only wishes so that I should give more extraordinarily
diverse sorts of revenue. To ensure that our company can provide our customers
with the help of the maximum tremendous possible fine, I would invest in numerous
regions, including technology, the training and advancement of our group of workers,
and the increase of our company.
When starting an organization inside the business of supplying a provider, it's critical
to make sure that the company can quickly adjust and maintain its flexibility despite
modifications inside the life cycle of the enterprise. This is specifically true if you
have been the pioneer who created the enterprise or the industry within the first
location. Continuous overview, alongside the formulation and execution of strategic
plans, will want to take region if the business has any danger of being profitable for a
greater extended length of time.

Conclusion

When starting an organization inside the business of supplying a provider, it's critical
to make sure that the company can quickly adjust and maintain its flexibility despite
modifications inside the life cycle of the enterprise. This is specifically true if you
have been the pioneer who created the enterprise or the industry within the first
location. Continuous overview, alongside the formulation and execution of strategic
plans, will want to take region if the business has any danger of being profitable for a
greater extended length of time.

Q3. The Landmark Group owned "Home Centre" has grown into one of the
largest retail and hospitality conglomerates in India. They have presence in
India, North Africa and Dubai operating over 630 stores across 145 cities with
over 9.4 million square feet of retail space. The company is planning for an
aggressive growth in the next 5 years and as part of this is planning to expand
to business to many countries in South America and Far East. The biggest
challenge they face is of shipping the heavy furniture and maintaining the
huge inventory, which adds on to a lot of costs.

a. You are appointed as business consultant in the organization. Suggest

some different level of strategies that ultimately helps them. (5 Marks)

Ans 3a.

Introduction

In my capacity as a business consultant for Home Centre, I would suggest the

following approaches to assist them in tackling the difficulty of sustaining high
inventory expenses while still delivering heavy furniture: This will help us bring in
new clients while also assisting us in maintaining the relationships we have with the
ones we already have.

Concept and Applications

If home Centre optimizes the control of its supply chain, it will be able to lower the
charges of its delivery instances while simultaneously increasing the efficiency of its
operations. They will also be able to reduce time spent on inventory control, which
will be a huge benefit. To minimize the fees related to the cargo, they have to
consider different answers, including drop-shipping, for instance.

1. Just in time: JIT is a form of inventory management that requires

working closely with suppliers so that raw materials arrive as production is
scheduled to begin, but no sooner. The goal is to have the minimum amount
of inventory on hand to meet demand.

2. Make Packages Lighter: While product weights remain the same,

ensure to use minimal packaging material to reduce the overall weight of the
package. Use more lightweight, efficient materials like air pillows to protect
items. You can also use light boxes to pack. For durable products that won’t
cause spillage, try switching to plastic bags with branding rather than bulky
boxes to reduce shipping costs.

3. Club Orders Wherever Possible: It is much cheaper to ship a single

box that is bigger and heavier than multiple small boxes with single items.
Bundling orders is possible when the same customer orders various products;
this can help reduce shipping costs. You can also provide discounts on order
volumes to increase customer delight.
4. Network of Multiple Shipping Partners: Having various shipping
aggregators to negotiate with will help get better rates and will decrease
shipping costs. Shipping companies decrease shipping costs if the business
has consistent order volumes. This provides an excellent opportunity to
negotiate with multiple providers based on prices offered by competitors.
5. Use Packaging Provided by Carrier Partners: Since shipping costs
are affected by package dimensions, it’s better to use packaging materials
offered by the carriers themselves. This will eliminate associated dimensional
fees and reduce shipping costs, overall
6. Reduce Shipping Distance: Keeping inventory at locations closer to
areas of high demand will help decrease shipping costs drastically. The closer
the products are to delivery locations, the less money and time businesses
need to spend in getting their orders to customers. Having a third-party
fulfillment partner will optimize the delivery experience and decrease shipping
costs. 
7. E-commerce: The organization is now in a position to pay attention to
its efforts to grow a solid e-commerce infrastructure. This may permit clients
to peruse product catalogs and place online orders. Due to this, the business
enterprise can provide a progressed carrier to its customers. This can
decrease the expenses involved with working a physical save, which may
increase the number of people that patronize the company's
institutions. Through entering into business partnerships with regional
distributors and traders in countries within the long way East and South us,
worldwide expansion domestic Centre has the potential to increase the scale
of its consumer base and serve a greater significant variety of cease users.
This will help decrease expenses connected with transportation, and it also
gives the company the opportunity to tap into the revel in the nearby market
in addition to the options of the local consumers. 
8. 3PL Partner: The best way to decrease shipping costs, reduce order
processing times and improve customer satisfaction is to outsource fulfillment
operations. Here is how a 3PL fulfillment services provider like WareIQ can
help businesses maximize profits and reduce shipping costs:
 9. Flexible Warehouse Space: Allows businesses to pay only for the
warehouse space that is actively used without the businesses having to invest
anything in warehouse management.
10. Packaging Optimization: Having experts manage fulfillment ensures
that products are packed with suitable materials that provide damage-free
delivery and avoid an increase in the DIM weight.
11. Provision of Discounts: Having a fulfillment partner helps improve
shipping costs as they buy packaging materials in bulk and can help reduce
overall fulfillment costs.
12. Inventory Management: With access to fulfillment centers, businesses
can easily manage optimal stock levels and scale the business without high
capital investments.
13. Use regional carriers: If you do most of your business within a
regional area Regional carriers offer the same services as major carriers like
UPS and FedEx but at significantly reduced prices. The only difference is that
– as their designation implies – their delivery network is limited as they only
operate within a small geographic area. For example, you can partner with
OnTrac in the West, LoneStar in Texas, and Spee-Dee in the Midwest. This
can be a good option if your deliveries are within their region.
14. Outsource fulfillment: Last but not least, fulfillment, in general, is
expensive. Outsourcing it can often save you money. You save on labor,
training, supplies, and storage at a minimum. You often also benefit from
having peace of mind and retaining more customers. Once you’re shipping
more than 100 orders per month, outsourcing fulfillment should definitely be
on your radar

15. Product Innovation: home Centre may additionally decide to prioritize

the introduction of novel and ahead-thinking merchandise to satisfy their
customers' ever-increasing expectations to differentiate themselves from their
competitors and meet the ever-increasing expectations of their customers.
This is a method by which the home Centre can meet those wishes. 

Conclusion

Combining these strategies can assist home Centre in triumphing over the
challenges related to shipping heavy furniture and maintaining substantial stock fees
while helping its aggressive boom plans in the subsequent five years. Combining the
two techniques can facilitate faster growth for the domestic Centre, which could
benefit the business. This is because combining these strategies can assist the
home Centre to grow extra quickly. Domestic centres could gain from a more rapid
expansion if each procedure were combined.

b. Explain different expansion strategies with respect to "Home Centre

Ans 3b.

Introduction

As a business representative for the home Centre, a spread of potential increase

strategies may be supplied to help the firm increase its business while
simultaneously controlling its costs and preserving its profitability. Those growth
methods can be furnished within the context of assisting the firm in receiving
assistance from the consultant. Businesses and companies use different methods
and techniques to stabilize their earnings. It’s also one of their goals is to grow their
business and become more prosperous. They call it expansion.

Concept and Applications

Expansion strategy is a corporate level strategy that is centred on expanding the

business unit. The goal and reason behind the business expansion strategies may
vary from business to business. It could be increasing the social benefits, increasing
the market share, achieving economies of scale, prestige, and higher profit.   There
are many strategies like Expansion through Concentration, Expansion through
Diversification, Expansion through Integration, Expansion through
Internationalization but restricting to the relevant expansion strategy for home
centre the following are mentioned in detail in the following:

Expansion through Concentration 

Expansion through concentration is the grand level strategy, and it requires an

investment of a plethora of capital and resources in a specific product line. It’s to
satisfy the needs of the target market with the specific verified technology.

In other words, when a business or a company invests its capital and resources into
one or more product lines and businesses, the purpose is to satisfy the needs and
wishes of customers. However, businesses and companies employ concentration
strategy by any of the following methods;

1. Product Development. Here you launch some new products in the existing

market to increase the product line of your business.

2. Market Development. You expand your market and attract more customers

by using the existing and current product line.

3. Market Penetration Strategy. The focus of your business is on the current

market by using the existing product line.

Businesses and companies utilize concentration strategy because they’re already

familiar with the field and product niche. They don’t have to make any structural
changes in the company. It is because they already know their business.

Expansion through Integration 

Through integration, expansion is when you combine/join various current operations

of the company without changing the target customer market. Businesses and
companies use a value chain system for integration.

The value chain is the process of related activities that a company performs, from
the raw materials procurement to the finished good. The company increases or
decreases the number of steps in the value chain system and develops the product
to satisfy customers’ needs.

The expansion through integration has two main types;

1. Horizontal Integration. Horizontal integration is when a company

overpowers the competitor by offering the same products/services
and marketing strategy. For instance, a pharmaceutical company overcomes
the competitor brand by providing similar products.

2. Forward Integration. Forward integration when a company opens up its

brand retail stores and directly approaches the final customers and offers
them the product/service. For instance, the outlets of Apple, Samsung,
Huawei, etc.

3. Backward Integration. Backward integration is when a company goes back

to produce its raw material for its finished products/services. For instance, a
shoe factory also makes the leather, raw material, for its final products.

Expansion through Cooperation 

When a company agrees with the competitor brand to perform business operations
together and compete with each other simultaneously. The expansion through
cooperation has the following types, and they’re as follows;

 Strategic Alliance. The strategic alliance is when two or more businesses

integrate to execute their business operations coactively and work
independently to achieve their individual goal. The purpose of the strategic
partnership is to exploit any of the companies’ human resources, technology,
and expertise.

 Joint Venture. A joint venture is when two or more companies plan to

execute their business operations jointly. The purpose of the joint venture is to
utilize the strengths of the two companies. Businesses and companies go on
a joint venture to achieve a particular task or goal.

 Takeover. A takeover is when one company buys the other company and
becomes responsible for the operations of both.

 Merger. A merger is when two or more companies integrate where one

company buys the other’s assets for cash. Both companies get dissolved and
form the new company. The acquisition is the buyer company, and the merger
is the acquired-company.

Expansion through Internationalization 

Expansion through internationalization is when a company goes beyond the

country’s national border and market. The reason for internationalization is when the
company has utilized all the opportunities in the domestic market. Now the brand
expands into the global market to exploit opportunities in the international market.

Businesses and companies perform the following strategies for expansion through
internationalization;

 Global Strategy. Global strategy is when a company follows the low-cost

approach and offers its product/service to a particular foreign market where
lower-cost is available. The company provides the same low cost
manufactured product to the rest of the world.

 Multi-domestic Strategy. A multi-domestic strategy is when a company

provides a customized product/service relevant to the foreign market
conditions. It’s a costly strategy because of its research and development
 cost, market, and manufacturing costs by following the local markets’ needs in
different countries.

 International Strategy. International strategy is when a company offers its

product/service to those markets where they don’t have access to it. It
requires strict controls over the operations in the other countries and offering
them the same standard product.

 Transnational Strategy. A transnational strategy when a company follows

the global system and multi-domestic process at the same time. Here the
company offers customized and low-cost products/services to the local market
by following their environmental conditions.

In other words, the company provides the standard product/service aligned with the
local norms of the country

 Omni channel strategy where they allow their customers to order products
anytime, anywhere from any device. The company employs the managed
marketplace business model. They can connect with small and medium-sized
business merchants and artisans to supply the indigenous goods or products.

 Franchising: In the business world, franchising is a method that

accommodates developing agreements with nearby companies in
underdeveloped markets. These relationships are formed so that the nearby
firms can also use the house center's enterprise model and brand call. as a
consequence of this partnership. The domestic Centre could be capable of
entering new markets faster and with a lower hazard than it might have been
otherwise feasible because the local franchisee might be liable for the
expenses associated with establishing and administering the shops. 

Conclusion

With the advent of the internet and convenient international shipping, expanding into
foreign markets is easier now than it has ever been With the assistance of these
numerous boom techniques, they will be capable of keeping their cutting-edge
income margins, managing their expenses, and expanding their business while
maintaining their current income margins. By cautiously considering each opportunity
and doing an in-depth analysis of the associated dangers and potential blessings,
the domestic Centre is in a position to select the commercial enterprise and
development techniques that will allow them to attain their dreams as efficiently and
effectively as possible. Many factors and variables come into play while deciding on
an expansion strategy to grow your business. Apart from the economic factors,
socio-political circumstances also play a determining role in business expansion. But
if you have a clear vision, effective expansion strategy, right resources, adequate
funding, and decision-making ability, your business could grow beyond the local
market.