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06/12/2012

International Logistics and Supply Chain Management: Primark


International Logistics and Supply Chain Management: Primark

Introduction

The idea of supply chain management has been an important factor in the industry, especially on the firms that are engaged in the international market. The supply chain management is an ideal way to appropriately deliver the customer’s needs in the most desirable way. And because of the important role that the customers play in the organization’s supply chain management, the design and strategy in the supply chain management tends to react. By analyzing the issues involved in the supply chain management of the organization, we will determine the role of customer value towards the current operation of supply chain design and strategy in Primark.

Overview in the Organization

Primark Corp. is an emerging leader in the global information services industry. Through the effective use of its four powerful elements named as price, place, promotion, and product, the company can create its own market dominance. Accompanied by these elements, the company is focused in terms of the information services on financial, weather, and information technology markets. Way back from 1987, Primark is now currently enjoying improvements the usage of information services and technology. The influence of globalization and international competition created the firm’s position in the Clothing industry (Fuller, 1999). In terms of the supply chain management, the firm is recognized to be strong in the expansion and creating decisions. The centralization of Primark’s distribution resulted in the market research and growing number of warehouses that gives advantages to the firm in terms of facilitating the efficient concern regarding their target market (www.shippingline.biz).

The Market Segment

The market segment of Primark is divided into two groups – teenagers and young adult (working group). In the competitive marketplace, the market segment has been an important factor to have a clear definition in the supply chain management and sustain their sales even in the midst of industry crisis. The market segment targeted by Primark is the fashion conscious under-35s with the slogan "Look good pay less" (Segal-Horn, 2006). The influences in the market promote convergence around a trend of clothing. As a producer, one has to make a differentiated product in order to lead the market trend. And as a producer, there is a differentiated demand that will tend to seek out a differentiated niche to satisfy, rather than occupy the exact same space as another producer. The segment of the market in clothing industry should be also differentiated from the competitors in order to realize the benefits. Therefore, offering an on-trend, distinctive goods may be a source of benefit to some producers, since it offers the opportunity to work with and be in communication with others on a similar problem (Hemphill & Suk, 2009).

The Nature of Customer Value

Primark placed great investment in the clients to serve them well. The company’s advantage to craft a product will prioritize the needs in the market. Significantly, Primark already placed a standard in creating the products which is obviously under a great deal of pressure to manage the customer value properly and create the market dominance. In addition, within the market segment, the firm offers fashionable clothes at a very competitive price. The organization is therefore emphasizing the idea about the value for money for the customers, which can strengthen the supply chain management.

Market Qualifiers and Order Winners

Because of the manifestations in the economy, uncertain demand, and the ideal supply chain management. There are two strategies recognized:

·         Cost Leadership Strategy

·         Differentiation Strategy

With the use of the identified target market, it is determined that the cost of a product is a significant kind of market qualifier. Because of the traditional operations management theory that focuses in reducing the cost of the product or creating variation, this characteristic has been emphasized in the market (Stratton & Warburton, 2006). In gaining the order winners, or the characteristics that adds competitive advantages on the organization over the other organization, Primark is identified to use the cost approach which allows the introduction of differentiation advantage. The two approaches became their strategy in order to achieve more advantages in the market.

Current Pressures in the Supply Chain

The pressure in the competition and maintaining the customer value is also realized by the Primark. The challenges in the supply chain include the following:

·         accelerate the competitive advantage such as the use of modern technologies and innovations

·         global or international supply chain management and logistics

·         customer expectations more specifically in the differentiated market

·         flow of goods and services (e.g. suppliers) which is usually affected by the growing competitors within an industry

·         External pressures (competitiveness and reverse logistics) that affect the ability of an organization to create continuous adding value in an increasingly faster-changing environment.

In the focus of the companies and international environment, Primark has also gained attention. However, within the issue of logistics and supply chain management applications, it is important to consider the global context. There is a little pressure found in the growing number of competitors that might contribute in stiffing the industry. Prior to the current pressures in the industry and the supply chain, the operations accompanied with the supply chain management should be also addressed (Schoenherr, 2009). The pressure in choosing a differentiated product, rather than the exact same good offered by another producer, raises the probability that a trend supported by differentiation within flocking will get off the ground in the first place (Hemphill & Suk, 2009).

Conclusions and Outlook

Based on the strategies applied by the organization, Primark is indeed a strong corporation. However, due to the pressures that are present in the supply chain management, there is a hindrance in delivering the customer value. The pressures create a great opportunity in the organization in reviewing the corporate standards and policies. However, Primark can lead to increased competitiveness and supply chain advantage, if the supply chain is well manage by viewing the competitive landscape in selected countries, or compared suppliers from different countries against key competitive dimensions.

Works Cited:

Davies Turner Pushes Logistics in the Midlands [Online] Available at: http://www.shippingline.biz/Projects/Davies-Turner-Pushes-Logistics-in-the-Midlands.html [Accessed 09 November 2010]

Fuller, D., (1999) Marketing Mix Design-for-Environment (Dfe): A Systems Approach, Journal of Business Administration and Policy Analysis, p. 309

Hemphill, C.S., & Suk, J., (2009) The Law, Culture and Economics of Fashion, Stanford Law Review, 61(5): 1147+

Schoenherr, T., (2009) Logistics and Supply Chain Management Applications within a Global Context: an Overview, Journal of Business Logistics, 30(2)

Segal-Horn, S., (2006) Shedding The Frills; Making A Success [Online] Available at: http://www.open2.net/money/briefs_20051206_primark.html [Accessed 09 November 2010]

Stratton, R., & Warburton, R. (2006) Managing the Trade-off Implications of Global Supply, International Journal of Production Economics, 103:667-679

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