Jet Company’s Supply Chain Strategy

Executive summary

Jet has increased chances of penetrating into the highly competitive mobile phone market. The company should perfect on making sleek fashionable mobile phones using a number of recommendations discussed below and through implementing competent marketing strategies as the major back up. Though a number of companies have already launched the fashionable phones, pricing and styles is a major effect on the brand image. Launching of fashion sensitive mobile phones as the major image would help in building a brand image, which would successfully penetrate the market.

The company needs also to be conscious on technology advancement to have a long-term market advantage. In addition, there is need for a number of role models and top fashion designers to penetrate into the fashion industry with ease. However, considering that technology is the present key driver, this should be in form of a mobile phone to help achieve increase sales. Launching of the phone should involve celebrity performance to advertise in the fashion industry.

Introduction

The success or failure of a business is highly dependent on the strategies, which it employs to effectively various activities that it undertakes. The strategies will help in the long-term stability of the business and financial profitability of the business. The management of the organization will therefore come up with strategies, which define the business from time to time. The duration of implementation of the strategies usually varies from each strategy and from company to company. The duration of the strategy may range from one year to ten years. Among the most important, supply chain strategy of the business organization is what defines the success of a business greatly.

Supply chain can be simply defined as all the activities, which are related to the transformation and movement of products from the initial stages of design, to the stages of raw materials up to the time the goods reach the consumer as finished products (Hines, 2004, p. 5). Effective supply chain should be focused on the consumers of the company products, as they are main parties who determine the successor failure of the business. Among the most important strategies that help in capturing a large market is globalization and increasing the product portfolio of the company (Haines, 2008, p. 552). The company should therefore combine globalization and launch a new product, which will capture the high-end market.

Preferred option

After a comprehensive study of the market trends, the mobile phone industry customer taste have inclined to fashion sensitive phones, use of exclusive phones and need for sustained regular models which merge with the evolution of fashion. The industry contains a limited number of players, with reduced entry barriers, very strong buyer bargaining power and limited suppliers. Jet should turn into production of fashion sensitive phones and strongly encourage on the use of more than one phone (Ashman et al, 2006, p. 7).

The target market should be the high social economic young generation that is sensitive of fashion. The product should have a sleek design with keen interest on style; maintain high design standards with about five models every year. Production should be limited due to reduced target market. The target place should be the American, Europe and the Asian countries and launching to be done in America. However, costs related to marketing will be on a high extreme. The price of the product should be expensive which would allow for exclusiveness (Kurtz, MacKenzie & Snow, 2009, p. 610).

Analysis

Vision and mission analysis and objectives

Lankas is a well-established mobile phone company in the electronic and electric engineering department. However, there are company subdivisions into various groups including medical, transportation, and Jet falls under information and communication. Jet will then be detached from the information and communication department and run independently from the existing Lankas business unit (Dale, 2003, p. 240). However, the head of the department will take over the management of Jet, and he will be accountable to Lankas on the business matters regarding to Jet.

All the mandated duties and decisions made by Lankas are to be carried out through the head of department. Lankas board of management envisions becoming the top players in the telecommunication industry. Considering that all the business departments of Lankas are under the decisions of the chief executive officer, where the minimum set goals of Lankas is 6-10 percent rise in returns for the year 2011, this will also be the target for Jet (Ashman et al, 2006, p. 20).

The setting up of Jet as an independent unit of Lankas aims at enhancing the spirit of start up, but the major objective is to regenerate Lankas mobile phone industry to help meet the set goals. This as set by the top management would help to maximize the shareholder returns, and to increase the market share for Lankas as a whole. In this case, Jet, though running on its own drive by the goals and objectives of Lankas and the revenue attained channeled to Lankas shareholders. Lankas board of directors will represent the shareholders and the comprehensive objectives of the company.

External environment

Understanding the external environment in this industry will help in making informed decisions and employing of best strategies. There is need to have an in-depth discussion of a number of factors influencing the industry, including the PESTEL analysis and market drivers in the global perspective (Best, 2001, p. 25).

Industry dynamics

Technology is the main driver of mobile industry. From camera-phones to use of multi media messaging, advancement of technology will keep the pace. Fashion phones with reliable technology through use of particular applications will help compete against the technology-based phones (Ashman et al, 2006, p. 3).

PESTEL analysis

Political

There is no regulation of the markets allowing independence between operators and manufacturers from government intervention (Moore, 1995, p. 18).

Economic

Increase in incomes has increased the disposable income enabling the consumers to choose which phone to use without price sensitivity. In addition, the market of the high-end mobile devices is expected to increase in the foreseeable future (Allen et al. 2010, p. 1)

Social

Upcoming generation is information conscious making telecommunication industry very important. Mobile phones are very essential and have become a need in the society (Fling, 2009, p. 2).

Technological

Asian market is very advanced technologically as opposed to the European market.

Environmental

Used and disposed mobile phones, which are non-biodegradable, pose a great risk to the environment. In addition, use of mobile phones, affect individual health leading to tumors due to the waves.

Legal

Patenting of mobile designs is very hard. In addition, patent infringement is common as companies come up with counterfeits, which affect market stability of the product (Anon. 2010).

Globalization

Global marketing is already in function but standardization maintains high quality. Producers are also working under the economies of scale leading to global outsourcing to reduce costs. Different countries have different economies and thus lifestyles, hence informed pricing strategy use is important. Jet is to adapt of United States and China phone technologies in production (Ashman et al, 2006, p. 5).

Industry environment

Intensive sustainable market research should constantly be conducted to keep in pace with technology advancement. The company will hence require capital investment in research and development to retain a competitive brand image. The market involves a lot of retaliation and production of any mobile phone with a difference will lead to its release by competitors. The company has to outsource a number of models from strong competitors. Promotion of new products required high costs for effective market penetration (Ferrell & Hartline, 2006, p. 226). Re-launching an entry barrier through use of technology will easily be outdone but effective brand marketing with aesthetic value it stronger considering the financial support from Lankas. The strength of buyers’ power will call for use of different distribution channels. Strong buyers’ power is a threat since they may even affect the retail prices (Colley, Doyle & Hardie, 2001, p. 101).

Internal analysis and SWOT summary

Organizational capabilities

There are a number of organizational capabilities, which will allow for rapid expansion. In the production, Jet will make use of Lankas suppliers to strengthen the supply chain. The marketing work force recruited using the agencies to create a strong work force. In the research and development, outsourcing done where XYZ agency will be designing the phones using up to date technology and the phones launched within the shortest time possible to reduce competition. In the short term, the company will make use of Lankas resources with targets returns of 6-10 percent in the 2011 financial year. The management headed by the former departmental manager, has enough experience in phone industry (Ashman et al, 2006, p. 13).

Core competencies

For the telecommunication and mobile phone industry, the core resource is efficiency in making and receiving calls and messages. Jet will add a unique resource where fashion and aesthetic will be of major concern. The company will be very competent in marketing.

Capability to market helps in building brand image, which leads to competition advantage with increased entry barriers (Czinkota & Ronkainen, 2007, p. 489). Jet will be the second company to initiate on fashion sensitive phones where the first company had a very limited attempt making marketing capability a rare one. Due to reduced patenting and high imitation in the phone industry, it will however, be easy for other phone companies to follow Jet initiative. Heavily investing on this value chain will help the company to exploit the capability. In addition, by using Lankas network and marketing framework, there is strength in saying the company will have an added competition advantage (Porter, 1998, p. 415).

Design capability is a valuable strength where the company will make use of leading fashion consultants in designing the phones. There is no other company is the market presently that is maximally exploiting this advantage, making it also a rare characteristic. In this case, marketing and design will be the major fields of exploitation by the company. However, owing to the high risk of imitation, this will be a temporary competition advantage.

Value chain analysis

Currently, most of the companies design a phone and decide on the best target group. As opposed, Jet will be deciding on a target market and then design a phone for the specific segment. In this case, the market will be a great initiative for the value chain, making brand marketing a major driving force. For marketing as an activity of value chain, currently there is no advertising since the product is yet to launch. The company in this case has no loyalty but has a first mover advantage. With an objective of being an exclusive fashion phone, advertising will be a major consideration for reinforcement. Work force competence with their vast experience will provide this added advantage (Haberberg & Rieple, 2008, p. 173).

Intensive market research conducted assessed the market segment and the existing trends. The use of fashion consultants will help in creating of seasonal collections, which merge with the fashion trends considering consumers are more sensitive to fashion than even technology. Other components of the value chain require outsourcing in this case (Ashman et al, 2006). Jet is required to exploit their various advantages including competence in marketing and first mover advantage to help build a good brand reputation, increase the company market, and encourage the use of more than one phone (Haberberg & Rieple, 2008, p. 175).

Financial analysis

The company is not constrained financially owing to the unlimited support and budget from Lankas. The company will also first use Lankas fashion designers to make the mobile phones, which is another added advantage.

Intangible assets

Jet employees have knowledge on mobile phone industry after working with Lankas. This also includes the fashion designers involved. Considering Lankas is a well-established company in mobile phone industry, and Jet is a new brand, launching of fashion phones with the new brand has a market penetration advantage (Langston & Lauge-Kristensen, 2002, p. 25).

To help in leveraging the finances, Jet will focus on a small market target and use Lankas production tools and employees. Chips are to be recycled and the company to utilize a first mover advantage and increased marketing campaign for marketing superiority (Ashman et al, 2006).

Action plan and future strategies

It is clear that there is an existing opportunity in the mobile phone market and target a new segment of consumers with keen interest in fashion, and making optimum advantage of marketing competency can easily allow for penetration into the market. However, due to the imitation nature of the industry, other companies will retaliate and competition will eventually raise thus the need for competition advantage. In this case, there is need to incorporate technology into the product since it is the major driver of the industry for sustainability (Haberberg & Rieple, 2008, 281).

On entry, Jet should set its prices above the rest in the market or at competition level to make it excusive. When distributing the phones, stocking in high fashion designer stores will retain the brand image. As for marketing in the European countries, only the fashion sensitive and wealthy countries should stock. To control the buyer power from the operators, permitting only one distributor will help control the end user consumer prices. Brand marketing is a major advantage but owing to lack of loyalty, use of fashion role models will help to market the product (Hill & Jones, 2009, p. 26). In addition, the company should be involved in relationship marketing which will help improve the sales of the phones via the major distributors (Berndt & Brink, 2004, p. 6)

In the future, alliance with leading fashion houses will improve of Jet fashion image and increase on sales. The company should also be engaged in sponsorship of fashion events to create and increase brand awareness. Finally, use of network in selling in bulk will help to improve ability to penetrate the markets effectively (Ashman et al, 2006, p. 30).

Conclusion

After evaluating the internal and external analysis, a number of wealthy opportunities have emerged should require consideration. Addressing these issues will help Jet and Lankas as a whole to attain a competition advantage and increase the market share. With a first mover and marketing advantage, Jet will also require use of up to date technology to sustain advantage with the fashion sensitive phone. Jet should create a new market segment with great success with initial launch in America to create awareness. The phone price at around $350 will maintain exclusivity and sustain the brand image. Popular designers and fashion models should be the target and this would ensure success.

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