November 16, 2012
The central goal of my company is to keep retail prices low. Working with suppliers to ensure their prices are constantly low, but also means price changes are kept to a minimum.
Aiming to become lowest cost producer, the firm can compete on the price with every other industries and earn higher unit profits. Cost reduction provides the focus of the organization strategy. It targets a broad market. Competitive advantage is achieved by driving down costs. Price Leadership – The Company is well known for its “Every Day Low Pricing”, but is aiming to give the consumer greater value for each product category. Through leverage selling general and administrative expenses, the Company can ask suppliers to introduce efficiencies in the transportation of items. This can be the supplier to the distribution center, distribution center to the store and also within the store.
Since transportation can be as much as one-half to two-thirds of the total cost of distributing product it only makes sense to drive is in as many efficiencies into your transportation network as you possibly can. The 1st strategy is to limit the margin that would have to be paid to a third-party providing that service. The 2nd strategy is controlling the fleet my company can control the quality and timing of the service to move the freight from the distribution centers to the stores. That 2nd strategy is an important goal in reducing labor costs and maximizing the utilization of assets and resources. Currently, the vendor manages nearly all vendor shipments to my company. My company arranges backhaul pick-ups at vendors after one of its trucks makes a delivery to its stores. More stock will be needed prior to the seasonal upturn in sales volume. As sales decline, less merchandise is needed.
My company balances the "need for speed" with the costs inherent in the mode of...