Competitive Advantage Chapter 2 Part 2

• Efficiency


  Doing things right
• Effectiveness


  Doing the right things
• How to measure the success of a Logistics System

  • Speed of response
  • Variance
  • Profitable inventory
  • Transportation
  • Total Quality management
  • Continual Support
• Speed of response


  Are goods moved quickly to stores from the retailer's warehouses or suppliers?
• Variance


  How often is the retailer out of stock of products? If goods are out of stock often-it's a sign of poor logistics.
• Profitable inventory


  How quickly does the retailer move its goods (sell)? As goods that stand long –are costly.
• Transportation


  Does the retailer have the right transport/equipment etc. to move its goods to its stores/warehouses etc.?
• Total Quality management


  How often does the retailer have to re order goods due to mistakes (from the retailer or supplier?)
• Continual Support


  Does the retailer have an effective and efficient system to accept returned goods i.e. Reverse Logistics?
• Value for money


  How customers balance the benefits of the purchase against the costs of this purchase.
• Customer value


  The difference between what a customer gets from a product, and what he or she has to give in order to get it.
• Consumer perceptions of value

  • Lowest price
  • Quantity
  • Quality
  • Both Quality and Quantity
• Lowest price


  People often view items that are "lowest" priced as value for money.
• Lowest price


  • Jive 2 litre is cheaper than a Coca Cola 2 litre
  • Hungry lion Vs KFC- cheaper per piece
  • The Suzuki S-Presso the cheapest new car in SA at =-+R162000.00 (2023 price)
• Quantity


  Customers perceive value in terms of how much their getting for their money.
• Quantity


  • A new Samsung led 32 inch TV could retail 4000.00 but Hi-sense could offer a 40 inch TV(Bigger) for the same price.
• Quality


  Customers perceive value in terms of quality, e.g. better performance, reliable service; longer lasting, good after sales service.
• Quality


  • You could buy a fridge for 5000.00 (last you 5yrs) or pay little more for quality brand name fridge.(last you 10yrs)
  • Honda cars are known for their quality-of reliability.
• Quality and Quantity


  Customers view value in terms of what they paying to what they getting. So quantity; quality; price; sacrifices etc.
• Quality and Quantity


  • DSTV (price and benefits) –vs. SABC
  • Virgin Active vs Home gym. (paying more but you getting more at gym and quality)
• Types of value- Supply Chain Members add value

  • Form value
  • Place value
  • Possession value
  • Time value
  • Information value
  • Service value
• Form value


  Raw materials are transformed into a finished product, by a manufacturer- form utility is achieved.
• Place value


  Is the value created by moving goods to places where consumers need them.
• Place value


  • Convenience stores sell daily necessities and are located near customers (suburbs; community etc.)
• Possession value


  Is the value created by Retailers for e.g. allowing consumers to purchase on credit or use debit cards etc. or Lay-Bye etc.
• Time value


  Manufactures/Retailers etc. create value by offering products to customers and consumers at times they require the products.
• Time value


  • Warmer clothing in Winter
  • Hotter food in Winter (soups)
• Information value


  Retailers; manufactures suppliers add value by educating consumers on the benefits of their products etc. e.g. Through brochures; demonstrations; videos Trade shows etc.
• Information value


  • Retailers can also inform consumers on products so that they can make good buying decisions
  • Manufactures/ suppliers can educate Retailers on their merits of their products-creates value to Retailer/Consumers
• Service value


  Retailers create value by offering pre purchase service and post purchase service (after sales)
• Service value


  • Retailers create value e.g. by assisting consumers with product queries; returns etc.
  • Manufactures/ suppliers create value assisting retailers in creating awareness of the manufactures new products and latest developments in the industry