DHL….Moving the Global Markets forward…

DHL...moving th global market forward

Distribution channels are a set of intermediaries which are a part of manufacturing a product and making it available in the market for the use. These distribution channels are more efficient in manufacturing the products and making them available in the market. The intermediaries which nothing but the interdependent organizations helps in improving the contacts, specialization, experience and scale of operation. Coming to the point of Logistics, it involves the entire supply chain. Now-a-days, the importance of logistics is increasing which is the important aspect in winning the customers and keeping them. It ensures the availability of goods or services with respect to their place which are in good condition and making them available at economical price. Logistics concept is used even before Christ and by many Greek invaders like Alexander the Great and Leon Wise which helped them in describing the methods for finding food, clothing and ammunition. Logistics used to play an important role in the wars by many kingdoms and their generals and they won who practiced the logistics concept. Even in World War II, due to the perfect practice of logistics, it was recognized as the important factor for winning the war.

In the year 1994, according to the survey conducted by Boeing Company, the international express industry occupied a total share of 5% in international air cargo market. This share of the air cargo market gradually continued to increase to 31% by the year 2014 and this largest share belongs to no.1 international express carrier DHL. The foundation stone is laid in the year 1969 by Adrian Dalsey, Larry Hillblom and Robert Lynn (founders initials termed as company name) which later remained as undoubtedly world leader in the industry of air express distribution. The main success secret of DHL is understanding the need of the customers, both international and local and this made the company to launch in 223 countries. By the end of the year 1960, the companies mainly relied on three sources of transportation for transporting the documents and parcels. They used the Post office or equivalent service which mainly targeted the private users, they relied on on-board couriers but are subjected to weight limit and they also used the standard air freight which mainly used to have the delay at the customs department.

These three alternatives formed a big gap in the market for fast, cheap and reliable distribution of goods and services and this led to the foundation of the company. In the initial days, DHL concentrated on emergency document delivery. Later on, after a tight stand in the industry, they started to distribute all the consignments which consisted of all sizes. In the year 1970, most of the banking organizations and many financial institutions started to use the service to reach their targets. This later on spread to other sectors like manufacturing and service, world trading and many other multinational companies. In the beginning of 1982, the use of air express industry was half a billion dollars and which later reached to $4.5 billion by the end of the decade. Due to the increase in the demand, air express companies started to supplement their own fleet of aircraft and their own deports for sorting which helped them in gaining the faith of the customers. In the year 1980, DHL international Ltd., created a hub in Heathrow Airport and it is followed by East Midlands Airport and now this is the third largest air cargo airport. In the year 1981, DHL completely computerized with the significant investment which in return foreshadowed the beginning of total logistic services.

There are many factors that influenced the air express industry and they are

  1. Due to the change in the manufacturing process and trade globalization, it shortened the customer expectations. Especially in Europe, due to the beginning of developing markets and trade conditions relaxations increased the standard of services reliability.
  1. To sustain the competition and to withstand in the market, efficiency in distribution is regarded as the important factor. Besides the express delivery service, DHL played an important role in fulfilling the needs of the customer through inventory management, mailroom management services and direct distribution services.
  1. Technology played an important role in improving the reliability of the company which made a large scale investment on the air express industry. Due to the advancement in the technology, it allowed many multinational companies to depend on a single company who can fulfill their needs. Due to the improvement in technology, it became easier to administrate, reduce the errors and cut down the related costs.
  1. Due to the change in shipping trends, it lead to increase in the usage of heavier parcel weights in the air express industry.

Brussels super hub is regarded as the DHL’s gateway to Europe and is biggest advanced in Europe. Its size got doubled in the year 1993 after acquiring the Federal Express sorting center. The super hub capacity at present is 80,000 packages per hour with 100,000 employees working round the clock handling over 400 tons.

DHL expanded the company in West Europe as well, in Dublin, Copenhagen and in joining hands with Lufthansa DHL shifted to new cargo center built in Frankfurt. The urgent parcels collected at 4.45 am, arrives in Frankfurt and delivered by the same business day. DHL is the first company to acquire the East European market. In the year 1995, an international express hub is established at John F Kennedy airport to transfer the shipments between North America, Europe, Africa and Middle East.

The important core products in DHL international express industry are DOX Worldwide Document Express, WPX Worldwide parcel express, EUX European Union Express, World Mail and Import Express. Besides these core products there are some other complimentary services like customer automation, insurance services, help desks, weekend collection and deliveries. To improve the quality of service, DHL invested heavily in Information Technology. For example, to track a deliver the customer needs to provide his 10 digit tracking number and country of origin which in return gives the details of date and time of the delivery also with the name of the recipient.

References:

http://www.adam-europe.eu/prj/7095/prj/CourieL_WP2_Chapter2_final.pdf

http://businesscasestudies.co.uk/dhl/the-number-1-express-carrier/just-in-time.html#axzz3auTd6tUW

http://www.dhl.com.au/en/about_us/dhl_in_australia.html

http://www.google.com.au/imgres?imgurl=https://www.edb.gov.sg/content/dam/edb/en/case%252520studies/DHL/DHL_722x340.jpg&imgrefurl=https://www.edb.gov.sg/content/edb/en/case-studies/dhl.html&h=340&w=722&tbnid=9-YxYs_j5rTu0M:&zoom=1&docid=BUJr82yx9q_1rM&ei=L9RfVe7DOMLUmgWUtYH4BA&tbm=isch&ved=0CDkQMygIMAg

By

Arun Teja Mattaparti (213347061)

Subramanyam Raju Gangaraju (213340871)

Electricity: Who’s benefited – “Distributors”? “Providers”? Retailers”? “Consumers”?

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          Electricity plays one of the major role in everyone’s life. Imagine a life without electricity every day, from the time we wake up and till we sleep. Can we run our day without power supply? Just think what if our mobile runs out of battery and have no power to charge it, what if all the electronic devices (Examples: Television, home appliances, washing machines, etc)  stop working due to lack of electricity? Can you imagine the consequences for these? To be frank, it would be a mechanical life without electricity, by using motors for each and everything we do in our daily life. I think ‘Imagining a life without electricity is something like human being without eyes’.

          The production of electricity has been increasing every year and every one are making use of it 24 hrs a day. But at what cost. Are consumers benefited with the electricity prices they get?

Australia is the world’s biggest exporter of coal and natural gas. The real asset for generation of power is coal. Coal is plentifully accessible all through Australia. For power era, black coal is majorly utilized as a part of New South Wales, Queensland and Western Australia. Though in Victoria, brown coal is the prevalent source. In the year 2013, “247 billion kilowatt hours (TWh)” of power is created by the “Australia’s energy stations”, which is very nearly 59% overabundance than the power delivered in the year 1990. Out of 247 billion kilowatt hours (TWh) of power, 15 TWh is utilized by the power stations and almost 12 TWh is lost amid transmission and the remaining is used by the buyers.

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National Energy Market (NEM) foundation incorporates both state and private assets and is administered by a blended sack of substances under the general course of the Australian Energy Market Operator (AEMO).The framework burden component was around 55% and the store edge around 28%. In the focused business sector the wholesale cost found the middle value of about $55/MWh. This included around 20% of last retail charges (51% being system, 20% being retail client administration and vitality effectiveness projects, and 9% being carbon cost). Not at all like some abroad power markets where the transmission framework administrators initiate dispatchable limit 45 minutes in front of saw need, in Australia the NEM has constant adjusting with the commitment on renewables up to five minutes prior to conveyance. Costs are subsequently topped all that much higher, at $13,500/MWh. This has given motivation to interest in new adjusting plant, with 4 GWe of adaptable limit being included late years. In 2013 spikes went to $7000/MWh, with a considerable measure above $1500/MWh. (In Germany the top is €3000/MWh and the most astounding spike in 2013 was about €130/MWh, offering ascent to little speculation.) In Australia a gas-terminated plant may keep running for 900 hours for each year (burden figure 10%), on 1050 events, with 400 of the starts being for five minutes just, however it can be economic.

Much power in Australia is presently exchanged so that dissemination organizations purchase at the best cost accessible from hour to hour from contending generators. The troubles coordinating supply with interest can be judged from the way that Victorian interest reaches from 3900 MWe to 10,000 MWe, and that in NSW from 5800 to 15,000 MWe.

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Australian power costs were practically the most reduced on the planet to around 2007, yet have risen altogether from that point forward, and worldwide examinations are exacerbated by the conversion standard. Henceforth 2011-12 normal Australian family costs are above Japan and EU normal and much higher than USA. By state, WA, Vic, NSW and SA, 2011 costs rank behind just Denmark and Germany.

The prior low costs made a noteworthy issue in pulling in interest in new producing plant to cater for resigning old plant and taking care of new demand – a 25% increment by 2020 was anticipated, and indeed a 40% ascent happened by 2011, with another 30% anticipated to 2013.

Eastern Australia’s National Power Market (NEM) works the world’s biggest interconnected force framework that keeps running for more than 5,000 kilometres from North Queensland to focal South Australia, and supplies some $10 billion power every year to take care of the demand of more than 10 million end clients. The NEM volume-weighted normal cost in 2008-09 ran from $36/MWh in Queensland to $49/MWh in Victoria and $69/MWh in SA. NEM base contains both state and exclusive resources, and is overseen under the general heading of the Australian Vitality Market Administrator (AEMO), which was built up by the state and central governments.

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The supply of power starts with generation of power in power station. The generating of power is done by utilizing numerous natural assets that are accessible, similar to coal (significant asset in Australia), renewable energy – sun based, wind, hydro, and a some fuels for low power generation. Generally these power stations are situated in the regional places where there is less population. In Australia, there are number of power stations in every state. “Loy Yang” is situated in Victoria and is the biggest power station in Australia.

The power produced in these power stations are transmitted to diverse districts with the assistance of transmission links. Every locale has its own particular wholesaler who purchases power from the power stations in mass at a low cost. These wholesalers supply energy to the suppliers independently in diverse areas at a value which would be gainful to the merchant. The no. of suppliers are not confined to one and only in a locale, there are atleast 2 to 3 suppliers for a district. (For example: AGL, Origin, Power direct, Jemena are the suppliers of power in Victoria. AGL and Origin are likewise retailers of the power market). These suppliers offer power to the retailers at higher cost than they get. The retailers then alter their very own cost and give it to the clients. This is a long channel of appropriation of power from the producers to the purchasers. Because of the move of power in this long channel, the costs are brought at every point up in the channel and when reaching the end (Consumers) the costs are increased than the manufacturing costs and it varies with different retailers.

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The retail organizations that are currently accessible in the business, purchase power effortlessly and make benefits by offering it to the clients at distinctive expense. This is making clients feel uneasy with the costs and making them to choose alternate options like solar energy (for example). At last, the retailers are benefited on the whole than the consumers. Many people switched to the solar energy in the resent years, which made the power prices high.

Honourable Prime Minister of Australia, Mr. Tony Abbot has told in an interview stating that “Australians will notice a difference on their next power bill and argues that the government has lowered the overall tax burden on people” (In a video interview with Sarah Ferguson (Reporter) on 17/07/2014 at Australian Broadcasting Corporation). He also says that the retail companies are advertising on the prices that are going to be reduced soon. Later on the prices of electricity reduced to some extent but not much low.

Resources:

  • World Nuclear Association – “Australia’s Electricity”, Appendix to Australia’s Uranium Paper, 2015.
  • CME report to Energy Users Association, Electricity prices in Australia: An International Comparison, March 2012.
  • “Data and Statistics – Energy in Australia”, ESAA: Policy and Research, esaa.com.au.
  • Brady, “A Dictionary on Electricity”, Prepared for Australian National Committee of CIGRE, 1996.
  • Warrick, “Living without Electricity”. Essay written for youth tour essay contest organised by White River Valley Electric Cooperative at Gainesville High School.

By

Subramanyam Raju Gangaraju (213340871)

Arun Mattaparti (213347061)

Coca Cola Life , A Healthy Addition ? – Place ( Distribution )

The Coca-Cola Company is the world’s biggest drink organization, invigorating buyers with more than 500 shimmering and still brands. Driven by Coca-cola, one of the world’s most profitable and conspicuous brands, our Company’s portfolio includes 20 billion-dollar brands including, Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitamin water, powerade , Minute Maid, Georgia and Dasani. Together with their packaging accomplices, they rank among the world’s main 10 private superintendents with more than 700,000 framework partners.

From a place and distribution point of view the coca cola company has targeted markets all around the world with particular advertisements based on the culture , language and standard of living of that particular region.

Also , commenting on the latest addition to the coca cola family , the new coca cola life has emerged with more then a few criticisms based on its marketing strategy that is to target a health conscious audience. In terms of distribution , i personally do not feel that this product can make a mark on the already existing range of products that coca cola has to offer , like the Diet coke and the zero sugar coke. With the introduction of this product , coca cola has tried to draw a line between its already existing original Coke beverage and the Coke with zero sugar.

First look - Coca Cola Life

First look – Coca Cola Life

Moreover ,

Well being specialists have blamed Coca Cola for ‘health washing’ purchasers with the dispatch of its new ‘lower-calorie’ soda as despite everything it contains everything of a grown-ups prescribed every day stipend of sugar.The soda pop Goliath’s most recent item, Coke Life, is part of the way produced using an actually sweet plant called Stevia, in an offer to target well being cognizant soda pop sweethearts.At the same time, a 330ml jar of Coca Cola Life still has 22g of sugar, likeness six teaspoons and 89 calories.At the point when contrasted with a 330ml jar of general Coca Cola which has 35g of sugar, likeness just about 10 teaspoons of sugar and 139 calories, that is 35 for every penny less sugar.On the other hand, the World Health Organization (WHO) prescribes that grown-ups of typical body mass list just eat 25g (six teaspoons) of sugar altogether every day.

My question being , if it is seriously sweet , with still a fair amount of sugar , and a reasonably large amount of calories for a small can , what makes it any different from other such offerings? Here is a picture i found where in the senior lecturer at the University of Sydney has made remark about the coca cola life being a healthy addition

“10 teaspoons of Sugar” – Beneficial or Harmful ?

In a general sense, this is around an organization propelling a sugary item to urge more individuals to expend a substance that adds to a scope of dietary and well being related issues, including diabetes. Coca-Cola gives off an impression of being utilizing the front of the administration’s disparaged obligation arrangement to search praise for drawing out an item that still contains more than 4 teaspoons of sugar for each 330ml can, which likens to one-quarter of a kid’s every day prescribed intake of sugar. As indicated by The Australian, Coke’s worldwide deals are under weight, and aggregate soda utilization in the US has declined more than 20 for every penny since 1998. In April, Coca-Cola Amatil cautioned financial specialists the organization’s assets were required to fall 15 percent for every penny in the six months to June 31.

HOW MUCH SUGAR IS IN YOUR DRINK? 
DRINK SERVING SIZE GRAMS OF SUGAR (PER SERVE) TEASPOONS OF SUGAR
Coca Cola Regular 375ml 40g 10
Coca Cola Life 375ml 27g 6
Diet Coke 375ml 0 0
Sprite 600ml 61g 15
Fanta 375ml 42g 11
Solo 600ml 72.6g 18
V Energy Drink 500ml 53g 13
Red Bull 250ml 27g 7
Gatorade 600ml 36g 9
Powerade 600ml 34g 8.5
Lipton Ice Tea: Peach Flavor 500ml 34g 8.5
Vitamin Water 500ml 27g 7

As indicated in the chart above ,in the metaphorical sense coca cola life is like the equator on earth , my point being it has more than half sugar as compared to Diet coke and just a bit more than half when compared to Regular Coke.While numerous are astonished by The Coca-Cola Company’s prerogative far from its famous red naming, there may be a much more unpretentious purpose behind it than the decency of green. The new item is said to contain impressively less sugar than regular Coke (in light of the fact that its sweetened with a plant concentrate), however doesn’t contrast positively and the two current items in the organization’s line-up. A container of Coca-Cola Life contains about 27 grams of sugar – contrasted with 40 grams in regular Coke and none in the two “eating regimen” offerings.Diet Coke and Coke Zero are sweetened with a mix of acesulfame potassium, a without calorie sweetener that is 200 times sweeter than sugar, and aspartame, additionally calorie free and 200 times sweeter than sugar.

The coca Cola life promotions based on place vary in different regions. For example here is an image clicked on southern cross station in Melbourne , Australia which advertises this new product.

“Let life Surprise you” – small yet catchy

Interestingly , from a distribution perspective Coca Cola Life has all the presence of a shopper’s choice, not an organization impulse. In reasonableness to Coca Cola, while Coke Life resembles a strategic reaction to the natural issue, it is discreetly revealing the Plant container in nine unique nations. So it is not a joke. Likewise Coca-Cola Life is bundled in the organization’s Plant Bottle, which is the first recyclable container produced using petroleum-based materials and up to 30% plant-based materials. The trust is to make a 100% plant-based container later on.

Coca cola products have been one of the top competitors in the beverage industry in the past decades but the question to be answered here is weather the introduction of coca cola life would provide a boost or is it going to fail the aspirations of the company. In terms of targeting the market , success based on distribution of the product would also contrast the pricing of the product when compared to the already existing products. The stand out factor is what will determine the success of the coca cola life , unlikely of what region the product is expected to hit. Only time will tell !

“As we tried to instill in each of our subjects over and over, WICKED is good.”The subjects being the audience or the target market and the product being Coca Cola Life along with ‘WICKED’ being the debate.

References

http://www.theguardian.com/business/2014/jun/11/coca-cola-fewer-calories-less-sugar

https://www.business.tas.gov.au/growing-and-improving-your-business/marketing-your-business/doing-a-swot-analysis/checklist-marketing,-promotion-and-distribution-channels

http://www.findingdulcinea.com/news/on-this-day/March-April-08/On-this-Day–Coca-Cola-Company-Releases–New-Coke-.html

http://radiopaedia.org/articles/coca-cola-bottle-sign

How to win battle in this soft-drinks market–Coca-Cola

111Introduction

Last year’s sales increase, buoyed by some much-needed warm, sunny weather should serve as a reminder that this sector continues to provide opportunities for growth.Water and energy drinks stand out as the winners from 2013 and despite some of the claims by campaigners, the soft drinks industry continues to lead the way in providing choices for health-conscious consumers. Specialist food and drink consultancy, Zenith International, has been commissioned to produce the 2014 BSDA UK Soft Drinks Report. All data and insights contained in this report were produced using Zenith’s internal market databases and primary research.In compiling its research, Zenith relies on the goodwill and co-operation of companies active in the marketplace. During Zenith’s annual research into the UK soft drinks industry, over 100 soft drinks producers are contacted. This includes larger branded operators, retailer own label specialists, contract packers and a significant number of smaller independent companies.Based on individual producer volumes for the year, market sector and segment totals are calculated from the ‘bottom up’. At a sector and segment level, adjustments are then made for any double counting of contract and licensed bottling. Estimates for unauthorised soft drink imports sold through the ‘grey market’ are also included. This is more pronounced in categories such as carbonates rather than dilute-to-taste drinks, for example. The market figures presented therefore encompass all aspects of the market including: take home, impulse and on premise; water cooler volumes for the office; home dispensed carbonated soft drinks; and draught dispensed carbonates.Following a detailed review of all data files received, certain adjustments have been made to historic volumes. There is a soft drink for every occasion and consumers are entitled to choose from an ever increasing wide range of drinks. However, the industry recognises the role it can play in encouraging consumers to make healthier choices.Companies are investing heavily in sugar-free alternatives and the evidence from the first few months of 2014 suggests this is the direction consumers continue to head in.Investment in innovation and skills underpins the contribution the soft drinks industry makes to Britain’s economy. Analysis shows the wider supply chain has a value added impact of £7.7 billion and supports a total of 135,000 jobs.

Method–How to expend market share

Coca-Cola company use 5 to 6 methods for expending market share.

  1. Focus on the best lines – Coca-Cola concentrates on its most profitable lines. In 1984 77of Coca-Cola’s operating income came from soft drinks. Today the figure is 97 By selling off businesses not sharing the same attractive financial fundamentals as the soft drink business Coca-Cola now operates only in the area of high-return business.
  2. Reinvestment – Re-investing profits is the key to ongoing business development. If profits are made today it is important to make sure of a base from which profits may be made tomorrow. In the 199Os Coca-Cola has concentrated its profits on re-investment. In 1983 the company’s dividend payout ratio was 65i.e. most of its profits were paid out as dividends to shareholders. Since then Coca-Cola has been increasing dividends at a slower rate than earnings growth, so that today, 6Oof profits ($66O million in 1994) was available for reinvestment.
  3. Focus on the consumer – All successful businesses today are based on focusing on the consumer. If a company meets the requirements of its consumers (and indeed exceeds these requirements), then you have a sure-fire recipe for success.
    An important measure of success is the volume and value of sales that you make.
    The world-wide success of Coca-Cola is illustrated in the chart below:
    Coca-Cola has set out to become the world’s number one consumer marketing company by taking clear actions to differentiate their products.
  4. Differentiation with customers – The direct customers of Coca-Cola are outlets such as service stations, newsagents, leisure centres, cinemas, clubs, supermarkets and many other retailers selling soft drinks. In this area the emphasis in marketing has therefore been on providing superior delivery, promotional services and sales support. All of these elements clearly differentiate Coca-Cola as being the beverage supplier most likely to generate profits for retailers.
  5. Differentiation with consumers – The end consumers of Coke are the millions of people who consume soft drinks world-wide. Over many years Coca-Cola has expanded its markets horizontally in country after country, until there is virtually no place on earth where people do not drink Coca-Cola. Today this horizontal growth is almost total, with fewer than 20 countries not taking the product. Coca-Cola is therefore now trying to develop the brands vertically.

This simply means creating a deeper consumer desire for that brand than existed the day before. It involves giving people additional reasons to buy Coca-Cola brands instead of reasons to buy competing ones. That is the essence of differentiation. It is not an easy task, because already 5.6 billion people have a well established understanding of what Coca-Cola means to them. However, there are considerable strengths which support Coca-Cola in this task namely:

  • The trademark which is so widely known and part of the public imagination.
  • Coca-Cola is continually building on its existing expertise in marketing and consumer understanding, and is supported by access to a wealth of financial and creative resources.
  • Coca-Cola has an ‘action orientation’. Instead of waiting for change to happen it is at the leading edge, driving action forward.
  1. Win the largest market share – Being the major player in a business market is the key to business success. A company only becomes the major player in a market by being the best, and being the best means having a detailed understanding of its consumers’ requirements and then exceeding these requirements.

Once a company is a major player then it has considerable advantages to draw upon. These advantages are based on having a higher return on capital than its rivals and the opportunity to plough this return into fresh investment. Such areas for investment are marketing, product research and development, and other aspects of sound business growth.feat_coke32__01__970-630x420

Place – Success factor of ZARA

By- Hussain Bootwala

zara

Marketing is a collection to activities to transform the idea into tangible product and intangible services. Marketing mix is the crucial tool used to perform marketing activities, marketing mix refers to 4 P’s that include; product, price, place and promotion. Place is the third element of marketing mix, this refers to activities and processes used to make the product and service available to final consumer. Producer or manufacturer used different distribution channels to complete this process.

Distribution channel include different intermediaries like wholesalers, retailers, reseller, agent and franchise. Distribution options and channels are as follows:

zara 1ZARA is a well-known Spanish clothing brand famous for its quick response, which is considered as a success factor for the company and gaining competitive edge over its competitors worldwide. Fashion is all about new and trendy clothing, ZARA’s inventory management and distribution strategy are the key elements behind its quick response strategy. ZARA has outlets in 86 countries, including Europe, United States, Middle East and Asia. In 2012, Inditex the parent company of ZARA has claimed US$20.7 billion of total sales, out of which ZARA contributed 66 percent that is US$13.6 billion sales, which is a huge success.

ZARA’s outlet have new batch of clothes after every two weeks, the organization manufactures around 450 million items a year and deliver it to 1770 outlets all over the world. ZARA achieve this control and management over its placing strategy due to its strong supply chain management than many of its competitors.

zara 2ZARA has its production or manufacturing units at three distinct places. 50% of its manufacturing is done in Spain, 26% in Europe and 24% is done from Asia and even Africa. From the manufacturing units products are transported to or distributed to ZARA’s headquarter at Spain and then transferred to its outlets all around the world. ZARA’s distribution strategy is vertical integrated strategy and to follow this strategy company requires having a high amount of control from headquarter. Inditex proves to have a well-controlled management from it’s headquarter with the alignment of latest technology they make it possible to distribute its products to its outlets in minimum time frame of just 15 days. ZARA is enjoying the competitive advantage by adapting and offering the latest trend in the market with the use of Hybrid communications system which facilitates the company to produce unique and latest designs with the available material in short production time and expense.

zara 3 ZARA is following vertical integrated distribution strategy which allows ZARA to enjoy benefits like strong control, cost control, competitive advantage and differentiation. These advantages lead ZARA to be the market leader in clothing industry. ZARA is able to cut its cost and time or having cost and time control as it do not outsource its distribution, this also allows them to avoid the conflicts that usually arises because of adopting different distribution channels. Vertical integration is also serving as a point of differentiation between ZARA and its competitors, as usually retailing stores outsource its distribution and that can be the reason of delayed distribution or supply of products at retail outlets which do not happens in case of ZARA.

The company has highly competent staff which allows ZARA to produce 1200 designs per batch and make it available in stores after every two weeks, which is a big achievement and this hard work pays off ZARA in gaining reporting high sales volume. Customers visit ZARA’s outlet to check for the latest designs and trends, quick and effective distribution could be a best way to gain customer loyalty and good reputation, and these are the lessons that could be learned from the success story of ZARA. Supply chain management of ZARA can be summarized as follows:

zara 4Therefore, is can be said after analyzing ZARA’s case that it is the proof that success of any business organization depend on many factors and the most crucial is its distribution strategy or distribution channel followed by any company. Company needs to be further cautious about its distribution strategy to gain the maximum profits and maximum share in the market. On the other hand, marketing and promotion strategy is dependent on the distribution network of any company. It is very important to have a strong market analysis before adopting any strategy for the company.

zara 5zara 6

Moreover, customer is the ultimate focus of any business and all the efforts done by any business is due to its customers or selling the products for its customers. If the products do not reach to its target or potential customers then it would be useless to put so much effort on its production. Placing the right product to right people is the aim of and success of any distribution strategy. Company can get the maximum market share due to its strategy and also can lose the greater amount of market share with high quality goods at lower cost.

 

References

Dahan, G. S., & Peltekoglu, F. B. (2011). The effects of Zara to the SMEs of an emerging market. Journal of Global Fashion Marketing2(1), 1-10.

Dent, J. (2011). Distribution channels: Understanding and managing channels to market. Kogan Page Publishers.

Flylib, (2015), Supply Chain Management, accessed on 18th May 2015, available at: http://flylib.com/books/en/2.405.1.9/1/

Government of Western Australia, (2015), Marketing – Place (Distribution) Strategy, accessed on 18th May 2015, available at: http://www.smallbusiness.wa.gov.au/business-in-wa/about-sbdc/corporate-publications/business-guides/marketing-place-distribution-strategy/

Hartley, R. F., & Claycomb, C. (2013). Marketing mistakes and successes. Wiley.

Hemantha, Y. (2012). Indian Consumer’s Perception of Spanish Fashion Brand Zara. Advances In Management.

Royo-Vela, M., & Casamassima, P. (2011). The influence of belonging to virtual brand communities on consumers’ affective commitment, satisfaction and word-of-mouth advertising: The ZARA case. Online Information Review,35(4), 517-542.

Shi, H., Liu, Y., & Petruzzi, N. C. (2013). Consumer heterogeneity, product quality, and distribution channels. Management Science59(5), 1162-1176.

Alibaba forays into Online Banking Network Transform China financial industry

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alibabaBy Chi S Siu  & Yan Ping Chau

“China’s finance industry, especially the banking industry, only serves 20 per cent of clients. I see the 80 per cent of businesses that have not been served,” Mr Ma, Alibaba’s outspoken founder and chairman, wrote in the People’s Daily on Aug 2013. “The financial industry needs disruption. It needs outsiders to come in and transform it.”

140911-alibaba_1502_f5f1f1d9bd6d93f0cce3929fe033ade4Mr Ma’s ecommerce group Alibaba, with its more than 500m registered users, has already reshaped the landscape in China’s retail industry. With its first foray into banking – a micro-loan business – growing quickly. Alibaba has encroached on banks’ deposit franchises with a new fund management service called Yu’e Bao, meaning “extra treasure” in Chinese, which allows Alibaba users to directly invest online cash in money market products. It is an attractive alternative to traditional bank accounts. The annualised interest is about 4.5 per cent, more than 10 times the 0.35 per cent rate on current deposits in banks but just as liquid: funds can be withdrawn at any time. Yu’e Bao notched up 2.5m users with Rmb5.7bn ($931m) of investments by the end of its first month.

On September, 2014, The China Banking Regulatory Commission finally gave approval to start a bank to a financial affiliate of Alibaba Group – Ant Financial that also is the parent company of Alipay, which processes e-commerce payments and is crucial to Alibaba’s operations. Setting up a bank would allow Alibaba’s financial affiliate to collect deposits and give it greater freedom to offer other bank-like services.

ant-financial-services-groupOn the 29th of April, Yuan Leiming, Ant Financial’s finance division’s general manager, said that Ant’s new online bank, called MYbank, is scheduled to launch in June of 2015. The launch follows Alibaba’s rival Tencent Holdings own setting up its own internet bank, WeBank, which began initial operations earlier this year. Ant Financial’s and Tencent’s new online banks are just two of several recently approved private banks, as the Chinese government looks to upgrade and modernize its largely state-owned finance industry.

The launch of MYbank is a major step in the creation of a full-fledged internet finance platform for etailer Alibaba. Moreover, this new financial platform is expected to open up services such as banking, loans and credit, insurance, payment systems and investment to hundreds of millions of Chinese who previously had limited access to financial services.

What is Alibaba? 

Alibaba is China’s — and by some measures, the world’s — biggest online commerce company. Its three main sites — Taobao, Tmall and Alibaba.com — have hundreds of millions of users, and host millions of merchants and businesses. Alibaba handles more business than any other e-commerce company.

MARKET CAPITALIZATION

Screen Shot 2015-05-17 at 7.22.53 amAlibaba became one of the most valuable tech companies in the world after raising $25 billion from its U.S. IPO. It is also one of the most valuable Chinese public companies, ranking among some of the country’s state-owned enterprises.

E-COMMERCE

Alibaba is the most popular destination for online shopping, in the world’s fastest growing e-commerce market. Transactions on its online sites totaled $248 billion last year, more than those of eBay and Amazon.com combined.Screen Shot 2015-05-18 at 8.52.53 pmScreen Shot 2015-05-18 at 8.53.58 pm

Alibaba’s IPO is the largest in the world
Screen Shot 2015-05-18 at 8.59.35 pmScreen Shot 2015-05-18 at 8.59.45 pm

Banking Distribution 2015

As per the McKinsey report – Retail Distribution 2015, it expect the typical retail bank by 2015 to have undergone a radical change in its distribution mix and to have the following key characteristics:

Fewer branches, fully digital with a personal touch: ‘One click’ processes will allow clients to get key information, order key products and pay for them with their smartphone multifunction card and on iPad.

More tailored to individual needs: The banks’s product and service offering will be tailored, providing multiple value-added services to clients with targeted market- ing campaigns based on rich CRM data.

Increasingly complex processes: Growing numbers of channels and different plat- forms for digital delivery (for example, Apple and Android) will create enormous process complexities, especially given the way customers increasingly use mul- tiple channels while expecting the process to be seamless.

Enhanced profitability (for those that get it right): the bank’s financial ratios will be much more attractive than they are today. Based on our assessment, it should be possible to reduce costs structurally by 20-40%, mainly due to lower distribution costs and changes in the distribution mix that drive down opera- tions and indirect costs. Higher investments will be needed in new technology, the costs of which can be offset by savings on legacy systems.

Reference:

Journal, WS 2015, What is Alibaba?, March 15, 2015, http://projects.wsj.com/alibaba/%3E.

 RUWITCH, PCAJ 2015, Alibaba steps up China online finance network push with new index, bank, Reuters, retrieved March 14 2015, http://www.reuters.com/article/2015/04/09/us-china-alibaba-mybank-idUSKBN0N005N20150409%3E.

 Victor Matarranz, ES, and Radboud Vlaar 2012, Retail bank distribution 2015—Full digitalisation with a human touch, McKinsey & Co, retrieved May 15 2015, http://www.mckinseyonmarketingandsales.com/retail-bank-distribution-2015-full-digitalisation-with-a-human-touch%3E.

Zhu, G 2014, Alibaba Affiliate Wins Approval to Start Private Bank 

Alipay Parent Company Wins China Regulatory Approval, The Wall Street Journal, retrieved March 13 2015 http://www.wsj.com/articles/alibaba-affiliate-wins-approval-to-start-private-bank-1411970203%3E.

The Coca-Cola Company’s distribution strategy

Authored by Lucius Lu and Sophia Tiwana

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According to official statistics, an amazing 1.9 billion products of Coca-Cola are sold around the world everyday.

The Coca-Cola Company is a global business that operates on a local scale, in every community where they do business. The term is second most well known after okay, making it recognisable in nearly all communities and cultures across the globe. The Company is able to create a global a global reach with local focus because of the strength of its system, which comprises the Coca-Cola Company and their more than 250 bottling partners worldwide.

The system has numerous legal and managerial departments and sections,all independent of each other, and it does not own or control all of it bottling partners worldwide.

While it is generally perceived that Coca-Cola runs all its operations globally it, this process it done through various local channels. The Company manufactures and sells concentrates, beverage bases and syrups to bottling operators. It still however, owns the brand and is responsible for consumer brand marketing initiative. The bottling partners manufacture, package and distribute the final branded beverages to customers and vending partners, who then sell products to consumers.

All bottling partners work closely with suppliers- grocery stores, restaurants, convenience stores, amongst many others- to execute localised strategies developed in partnership with Coca-Cola. More precisely, although Coca-Cola is a global company, its products never have to travel far to reach the final consumer, making the product more local than you may think, the product is made local to the market where it is sold.

Their business is a local business, typically products aren’t shipped more than a few hundred miles; it’s all about being responsive to the customers needs and the local tastes of the consumers in every market. The Coca-Cola Company sells its products to bottling and canning operations, distributers, fountain wholesalers and some fountain retailers. They then distribute them to retail outlets, corner stores, restaurants, petrol stations and many more.

Arrays of points of sales that Coca-Cola products can roughly be categorised into are:

– Wholesalers/ distributers

– Retail/ corner stores/ super markets

– Restaurants/ cafes/ night clubs

– Petrol stations

– Automated teller machines (AMTs)

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The firms distribution system is one of the most well planned and executed compared to all other drinks of the same category. It has such an impact on consumers and is so successful that even wholesalers and distributers need the product for their business’ success. Coke’s position on consumer’s mind makes it essential to retailers and wholesalers. They have achieved their goal due to this high visibility, and to the availability of their products all over the world, even remote places.

Here is a video showing Coke’s innovation in its distribution system:

Coca-Cola’s vending machines are also a way the brand stays true to its identity of #sharinghappiness. Innovations in this channel are numerous, but we have selected a lovely one for you: the hug machine!


References:

http://www.coca-colajourney.com.au/our-company/about-the-coca-cola-system

http://zh.scribd.com/doc/30939798/Distribution-Channel-at-Coca-Cola#scribd

http://scw-mag.com/index.php/sections/distributers/143-the-coca-cola-company