THE TAO OF TIMBUK2 CASE
1. Consider the two categories of products that Timbuk2 makes and sells. For the custom messenger bag, what are the key competitive dimensions that are driving sale? Are their competitive priorities different for the new laptop bags sourced in China?
In today’s global market not only is there a trend mounting toward shopping online but also product customization to meet and satisfy individual requirements. Timbuk2 has done just that, that in the bag market. In the year of 2000 is when Timbuk2 launches its award winning bag builder on timbuk2.com.
The main key competitive dimensions that have driven their sale for the custom messenger bags are Quality, and Speed. Quality can be split into two categories: product design quality and process quality. The process quality is the company’s ability to offer its customers a wide range of products such as, the built-to-order messenger bag and the consumers are able to pick and customize their own design, fabric, colors and other options to meet each specific individual’s requirement. In addition, the product quality is very durable by design and it’s individually handcrafted and designed to outlast buyers; thus the company stands proudly behind its well-know quality and craftsmanship of all their products.
Secondly, delivery competitive dimension; the company’s ability to produce and deliver a customized order within two days is remarkable. It’s a win win situation for both the customer and the manufacture. The customer can save time and travel expenses by shopping online. In contrast the company’s overhead and capitals investment is much lower and as sales increases its net present value increases.
The competitive priorities for the new laptop bags are very much similar. Quality still remains their first priority dimensions. Since their main selling features are their product durability and the process qualities that is applied to all their product lines. Although they are produced in China, Timbek2 will continue to design their bags in San Francisco and that would ensure the quality of product remains the same.
The second priority for the laptop bags was cost due to economic pressure, the high local wages and the complexity to build and produce new product. It wasn’t sustainable to continue producing their entire product line in their current plant. Therefore, they had to venture out of United State into Asian markets to seek new partnership. Now a day it’s very common for companies to downsize and outsource their products. By doing so, they are able to maintain good quality bags at competitive prices. The trade off here is, they may lose some American customers due to the fact that some domestically made products are sourced out and that may offend some of their American customer base.
Third priority would be speed and in order to ensure on time delivery to customer Timbuk2 would have to hold a certain amount of inventory buffer and perhaps to apply a Kanban system to ensure inventory levels do not drop below their minimum trigger. This is critical as its take 4-8 weeks to receive a container shipment from China via oceanic logistics.
2. Compare the assembly line in China to that in San Francisco along the following dimensions: 1) volume or rate of production. 2) Required skill of the workers. 3) level of automation, and 4) amount of raw materials and finished goods inventory.
1. Volume or rate of production
The volume or rate of production can be much higher in China than it is in San Francisco. The company strategically has planed and calculated all its options before making its decision on outsourcing some of its product to China. For instance, the complexity of the Laptop bags requires sophisticated machinery and heavy labor output in order to meet customer demand and to maintain their competitiveness in the market place. In China, not only are they setup to produce...
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