Topics: United Parcel Service, Supply chain management terms, Service Pages: 6 (1464 words) Published: March 6, 2013
( i )
• Differentiation

In order to remain competitive, the company will have to create a superior value product or service for the consumer. The company will need to be better, or unique as compared to other companies, in terms of criteria such as price, product specification, taste etc. Being able to provide extra value-added product or service can also make the company to be different than others, hence, giving customers clear reasons to choose the company’s product over other, less differentiated products.

• Cost leadership

In cost leadership, a company sets out to become a low cost producer in its industry. This is usually done by improving production process, gaining large source of raw materials at a cheaper rate or avoiding unnecessary cost so as to cut down on the production cost. Then, the company will be able to price their product at a lower price. If other competitors in the industry are unable to price their product at such a low price, then the company will be able to gain a competitive advantage over their competitors


There are three different factors under response strategy.

Reliability refers to the ability of a company to fulfill its task and able to function normally under any circumstances. Flexibility refers to the capability of a company to make alterations to the production plan if necessary and developing new ideas in order to improve the company’s product. Timeliness refers to the the ability of a company to use the shortest time possible to produce, deliver or improve the quality and design of goods, thus creating value in the market that will delight the customers.

( ii )
• Differentiation: Hermès

Hermès is a high-end brand that produces many types of goods such as leather goods, scarves, ties, perfumes, watches etc. They are renowned for their hand-made leather luggage and handbags, which are all hand-made in France. A craftsperson makes a single item at one time entirely by hand. This ensure the high quality and uniqueness of the goods produced. Therefore, Hermès uses differentiation strategy in order to gain competitive advantage in today’s world.

• Cost leadership: KFC

KFC is a fast food restaurant that provides basic meals at a relatively low price. This could be achieved by having access to large quantity of raw materials at a cheaper rate. Not only that, they cut down on labour cost by hiring inexperienced employees and chefs rather than professional ones. The profits they earn are also relatively low. These factors allow the company to keep their food prices low and affordable, displaying cost leadership strategy in order to survive in the food industry.

• Response: United Parcel Service (UPS)

United Parcel Service (UPS) is a courier company that originates from United States. UPS provides delivery of goods and packages within countries and also between countries. Being a leading global messenger company, they are well known for its effectiveness and efficiency in delivering parcels. Goods will definitely be transported at the designated destination in time. As such, it uses response strategy in order to capture customer value so as to gain competitive advantage.

• Quality

In order for companies to succeed, the companies will need to produce goods with quality that need to meet the minimum criteria of the goods’ industry. Manufacturing process and improving the quality of the goods are the areas of focus by this industry. As for companies that provide services, training the employees is the area of focus by this industry. Employees are trained in order to provide the customer with satisfactory service, or more, so as to delight the customers.

• Location selection

Location selection refers to selecting the appropriate location for a company to set up its stores according to the company’s objectives...
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