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Strategic fit for a company's overall success

How critical is is a strategic fit for a company's overall success? We compared the competitive strategies of Nokia and Xiaomi to get a closer look.

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Strategic fit for a company's overall success

  1. 1. ’ Topic 5 (36,37,38,39)1
  2. 2. Competitive Strategy Supply Chain Strategy Strategic Fit is the perfect balance between the two 2
  3. 3. • Affordable family cars • Latest technology at mid-range price • High product and parts availability A company’s competitive strategy defines, relative to its competitors, the set of customer needs it seek to satisfy through its product and services Competitive Strategy of Toyota 3
  4. 4. Supply Chain strategy includes a specification of the broad structure of the supply chain. It includes: • Design decisions regarding inventory, • Transportation, • Operation facilities and • Information flow • The production facilities in each of its major markets. For example, India. • There are 2 production facilities of Toyota in India making it the 4th largest vehicle manufacturer in India. Supply Chain Strategy of Toyota 4
  5. 5. It is the demand uncertainty imposed on the supply chain because of the customer needs it need to satisfy. The responsiveness of a supply chain determines how responsive a supply chain is, to its customers in the process of meeting demand. The goal is to target high responsiveness for a supply chain facing high implied uncertainty and efficiency for a supply chain facing low implied uncertainty 5
  6. 6. Responsive Supply Chain Responsiveness Spectrum Efficient Supply Chain Certain Demand Implied Uncertainty Spectrum Uncertain Demand 6
  7. 7. Competitive Strategy Supply Chain Strategy Strategic Fit is the perfect balance between the two • Very cheap smartphones with medium range capabilities. • Only launching 2-3 models of phones a year for limited customers. • Good after sales service. • The targeted market is China. • Only one retail store, that is the Xiaomi website. • Package delivery by 3rd party. • No physical retail store but many service centers. • Don’t leave any phone unsold. • Use flash sales as marketing advantage. 7
  8. 8. ’ Xiaomi managed to grab 14% of China’s total mobile market at the end of 2014. A perfect strategic fit brought the huge success of Xiaomi and made it the smartphone king in China 8
  9. 9. Strategic Fit is the perfect balance between the two Competitive Strategy Supply Chain Strategy • Cheap smartphones with higher-mid range capabilities. • Expensive options for high end users. • Market expansion to India, Bangladesh and other Asian companies. • Become a global provider of smartphones. • Online store for each region. • Physical retail stores in all the big cities. • Different distributors in new regions. • Retail stores maintaining the same aesthetic standards set by Xiaomi. 9
  10. 10. ’ Xiaomi managed to grab 6.3% of the total global mobile market share by the end of 2016. A perfect strategic fit brought the huge success of Xiaomi and made it the 4th share holder of the global mobile market. 10
  11. 11. Strategic Fit diminishes as the sales decline Competitive Strategy Supply Chain Strategy • Since Nokia is widely accepted, so adapt to Windows OS, different to what Samsung and Apple offers. • Maintain the similar hardware quality as it is accepted by its customers. • Use the existing costly supply chain network that has proved to be trustworthy since years. • Create more retail stores to meet the anticipated demand of Windows phones. 11
  12. 12. ’ The customer’s didn’t find Windows OS very comfortable and Nokia’s share started to decline A very imbalanced competitive and supply chain strategy cost Nokia to fail drastically in the global mobile market Competitive Strategy Supply Chain Strategy Strategic Fit is LOST 12
  13. 13. 13

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