Supply Chain Mgmt in Otto: Strategic Decisions, Vendors, Products, Customers - Essay Sample

Introduction

Supply chain management in every company normally operates on three different levels. For example, at a strategic level, the management team usually makes the major decisions that are of benefit to the whole company. The decision made by the management team should cover vendors, product development, and customers (Laari et al., 2017). Otto is an international company that buys goods from the manufactures and sells them to the customers. Over the last few years, the company has been using a competitor's analysis as one of its strategic supply chain management. However, to improve its performance as well as maintaining its efficiency, the company should adopt other strategies of supply chain management. Therefore, this task will review different strategies of management in the supply chain of Otto De Company to improve its performance and efficiency.

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Short-Term Strategy

Otto De Company needs to apply some short-term strategies to improve the operation of its business. The short-term strategy is marketing strategy plans, which only last up to one year. Most of the companies normally use this type of strategy to improve their sales and services as well as to promote new products in the market (Gilad et al., 2018). Also, this particular strategy helps the company to advertise its brand name to its customer with the aim of winning more and more clients. Thus, improving the profit returns of the company.

Otto De Company buys a lot of products from different companies and stores them in the warehouse and go downs. From the company's annual reports, they clearly show that a lot of money is usually spent on paying the rents of these buildings. Thus, it is an additional expense to the company. The management team should solve this problem by applying a method or a strategy way of getting the products directly from the manufacturer when the customer needs it. Then, after going for that product, it should be delivered directly to the client. For example, in the marketing and selling of large products which usually occupy a large space, i.e., a vehicle, Otto De Company management should communicate with the manufactures to always make sure that their products are available when they need them. By doing so, the company will be able to reduce or decrease the renting cost, which is an expense to the company; thus, preventing an additional cost that leads to low-profit returns.

To improve the performance of Otto De Company, the management team should take some action plans by widening marketing communication. For example, they should develop different marketing platforms in social media, i.e., Facebook, Radio, and Television (Dias & Ierapetritou, 2017). For instance, the company should post pictures and videos of what it’s selling to its customers. From these videos and pictures, the clients will be able to order different items even if they had not planned for them, simply because they liked them or they are attracted. Thus, it will help in increasing the market share of the company. Also, advertisement strategy will help the company to budget on its operation, and this will help in understanding or estimating the expected profit that will be received after sales at the end of every calendar (McCormack & Johnson, 2016).

Some of these short-term strategies that Otto De Company should adopt to increase its marketing performance are; giving discounts to their customers, the prices of their products should be friendly and equivalent to the quality of the products (Carey, Dumaine, Useem & Zemmel, 2018). For example, Otto De products seem to be more expensive as compared to items in other marketing companies. Thus, it is important for the company to lower the price of their products as well as the delivery cost. Also, the company should rebrand their products and holds campaigns as well as trade shows as a way of reaching their customers (Gopal & Priya, 2019). Although the company does not manufacture its products, the management should try to be more creative by rebranding the products from different companies, which will help the company to retain its customers as most of them will create more trust when buying a product of a certain company rather than buying it from retailers. Thus, the company will increase the number of its customers.

The management team at Otto should engage their customers during decision making so that they can give their opinion regarding the company's products. For example, customers should a chance to express themselves on what they want and also give out feedback concerning the services and products provided by the company (Puckridge & Woolsey, 2017). Thus, company management will be in a position to understand which areas they need to improve or change. Lastly, the management should always remember that these strategies are also important towards long-term success (Aghaei, Charwand, Gitizadeh & Heidari, 2017).

Mid-Term Strategy

This type of strategy normally lasts from one to four years period. The main aim of a mid-term strategy is to ensure that there is accelerating growth in the company. In most cases, this type of strategy provides permanent solutions to all short-term problems (Pokorn & Čibej, 2018). The Otto De Company should apply this strategy to its workers or employees. For example, the management team should train their employees to deliver the products to customers at the required time, and this will solve the issue of prolonging delay during delivery (Semuel, Siagian & Octavia, 2017). This strategy will help the company to win more customers; thus, the management team should implement it in the company’s operational structure.

To the area of quality problems at Otto De Company, the quality response team of this particular company should highly revise as well as strengthening the quality control program. In case a certain product has been reported of low-quality issues, the management should investigate and do more research on how to prevent such issues from occurring again. For instance, the company should hire experts in the profession of quality standards. Lastly, the issue of machine and equipment during the operation of the company should be highly solved to ensure that the performance is running well effectively (Liu, Mi & Li, 2018). For example, in case the machine has a problem, it needs to be repaired to increase its productivity rate (Lane & Smith, 2019).

Long-Term Strategy

The main aim of long-term strategy is establishing a brand awareness that can be effective for many years. The performance of this strategy may take time, i.e., years, as its main objective is to keep the brand of a company relevant and fresh (Lee, Yang & Pham, 2017). Thus, the company applying this strategy focuses on long-term benefits.

Otto De Company, being an international marketing company, should apply this strategy to ensure that its brand name and performance is fresh to their current and upcoming customers. Many individuals well know Otto Company due to its uniqueness of its services it provides to the customers as well as quality products that its delivery (Conti, Gambardella & Novelli, 2019). There are different ways the company should practice to continue winning more customers as compared to its competitors. Some of them include maintaining customer relationships, marketing content, and public relations. Otto De Company should maintain its relationship with its customers by ensuring that products delivered are of high quality. If it is a human consumption product, they should be free from contamination. This will help the customers to be able to trust the company, and they will continue buying their products with no fear (Lloret, 2016).

Otto De Company normally operates internationally; thus, it is important to implement artificial intelligence to all its employees as most of them work using modern technologies. The management teams should show the workers how to use different computer programs when marketing the products. For example, adequate training of both practical and theoretical will be of much importance to the workers. Also, after recruiting new employees, they should first be trained to develop the required skills of operating the technologies. Thus, all these strategies will help the company to continue operating its business effectively.

The strategies of supply chain management are essential to all organizations. These strategies help the companies to improve their operations, and in case of any problem, the management can identify it and handle it effectively. Thus, every operating company should always apply different strategies to increase its productivity.

References

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