This document provides summaries of supply chain strategies and business models for various companies. It discusses Walmart's everyday low pricing strategy and efficient supply chain. It also summarizes Dell's transition from direct to channel sales, Honda's close supplier relationships, Toyota's just-in-time approach, and Harley Davidson's focus on quality over discounts. Further summaries address FedEx's global delivery systems, McDonald's supplier management, Apple's innovation strategy, Tesco's challenges in Japan, and Toys R Us' success entering the Japanese toy market.

1. Muhammad Affaan Bin Akhtar
[BBA-5(A)] [01-111182-185]
Supply Chain
Management
ASSIGNMENT

2. 1
(1) Wal-Mart’s secret of Everyday low prices:
Instead of providing promotions Walmart offers the facility of low prices every day. The
Walmart pricing strategy has allowed Walmart to be the cost leader in the market. According
a survey 90% of the entire U.S population lives within 15miles radius to Walmart, this allows
Walmart to gather a large number of audiences that require the product and services that are
offered by Walmart. Walmart keeps its prices and costs low hence it generates its maximum
value from higher sales volumes and profits. Walmart has a very close relation with their
suppliers and they outsource their data to suppliers which allows them to predict the demand
of the product hence they keep their supply chain highly efficient and effective. Walmart allows
the suppliers to manage their inventory so that it never runs out of goods. Walmart focuses on
providing everyday low price instead of promotions, this strategy allows Walmart to generate
more and more profit every day. This is where large volume of sales come into play.
Considering the size of Walmart stores, Walmart buys the products in a large bulk which allows
them to buy it at a cheaper rate as compared to other stores. Walmart holds the ability to story
and manage their inventory no matter how many numbers of products that they might have.
(2) Dell – From direct Sales to Channel strategy:
Dell has had the direct selling strategy where dell directly interacted with the customer without
any middleman or third party involved. This allowed Dell to better understand the requirement
of the customers and hence it allowed them to enhance and shape their products as per the
customer satisfaction. The direct model strategy allowed dell to be closer and better understand
their customers. But as time passed dell also applied the channel strategy, Dell has its
manufacturing units in major markets of the world i.e. china, India, Ireland etc. Dell also started
selling its parts and two major pc units through Walmart. This was Dell also utilizing the
channel strategy along with direct selling. Dell sells its lower end pcs and laptops on Walmart.
This allows Dell to expand its products and sell it on different stores and levels along with
direct selling. Dell also has its own retail stores. Dell even has a series of retail stores in Russia.
Dell also sells in China through major retail stores and electric appliances dealers.
(3) Hondas approach to supplier management:
Honda holds a very close relationship with their suppliers to the point that the suppliers are
considered an extension to Honda company. Considering the major sales of Honda are in north
America, so in order to satisfy the demand of Canada, America and Mexico Honda has a
network of about good 600 suppliers functioning only in North America. Honda keeps an open
book relation with their suppliers meaning that Honda holds access to all the financials of their
suppliers. Suppliers send their products and parts into the plants, from where the cars are
manufactured in plants and then sent to dealers for end customer use. Honda believes in keeping
a very close relation to its suppliers considering their operations depend largely on their
suppliers hence for Honda to run efficiently, it is highly necessary for them to keep their
suppliers close. This relationship allows suppliers to build a trust with Honda, this keeps the
supply chain more effective and efficient allowing Honda to make their way through in such a
tough competitive market.

3. 2
(4) Toyota – Just in Time Methodology:
Toyota manufacturers believe in Just in time method, that is to cut costs and save warehouse
space. This methodology basically means that the company operates as per the number of
orders by the customers. Toyota more relies on prediction of number of orders or either sees
the trends and then plans on manufacturing their vehicles as per the requirement of the market.
The JIT method is not easy to cope as it requires constant work and if the number of orders
exceed the expected limit, the company then must function more effectively and efficiently to
make sure that the requirements are fulfilled. Toyotas supply chain is not only about saving
warehouse space and reducing stock load, it is also about having the right amount of inventory
where it is required. This allows Toyota to reduce waste and emissions.
(5) Harley-Davidson and its Supply Chain:
Harley Davidson motors believes in selling their products on full price rather than low priced
or discounted promotions. Harley Davidson has taken a few hits down the road when it comes
to standing firm in the market. That is because of poor quality and a bad supply chain
management system. Now for the company to recover from the losses that it has faced over the
time in the past as well, the company believes in not selling their products on low priced range
or discounted rates. The company now believes in JIT method mostly as it builds their products
as per the requirement of the customer but for that they need to run a more sustainable and
effective supply chain. Harley Davidson motors now involve engineers and designers when it
comes to designing their products that their automotive vehicles stand out in the market and
hence more demand is created.
(6) FedEx – Delivery Systems:
FedEx is a company that operates over 211 countries. Their delivery systems must be highly
effective and efficient. Over the time the company has only expanded more and more. FedEx
delivery system may sound very basic if it is written but when it comes to execution it is a very
hard task and it requires perfection otherwise if the company starts to lose the parcels, this
could affect them very badly. FedEx works on daily basis. Their delivery systems are simple,
FedEx has centers open worldwide where people bring the stuff that they wish to deliver, they
address the center where the parcel should be deliver, be it domestic or abroad. They pay a fee
to the company and then FedEx gets to start their job. FedEx uses both road and air means of
transportation. The company itself owns airplanes which fly overseas just with FedEx
deliveries. Their systems are expanded globally, and they have been successful in managing it
so far. The company holds major share of this market sector as its operations are highly reliable
and they do stand out to their competitors.
(7) McDonalds – Management of its Supply Chain:
As surprising as it may sound, company like McDonalds does not make any of its products by
themselves. They depend on their suppliers on all their products. The company has direct
suppliers that supply their orders directly to McDonalds restaurants. Indirect suppliers are the
farms and poultry farms that fulfill the meat requirements of the company. Indirect suppliers
supply to direct suppliers and direct suppliers further supply directly to restaurants. McDonalds
products must be delivered in a special manner. Considering its all food, the products must be
delivered in a temperature-controlled environment and freezing containers. If at all there is any
issue with the supplied goods, McDonalds does not accept that order.

4. 3
(8) Apples Innovation Strategy:
Apple believes in innovation and being different than the other technological companies.
Apples products are market leaders due to their unique qualities that the competitor devices do
not have. Apple believes in “think different’ from this statement it is very evident that apple
believes that their products should be different than that of their competitors. Apples prices are
higher as compared to their competitors, but the service and satisfaction that their products
provide to the customers makes apple stand out in the market and gives apple a large set of
audience that only depend on their products. Apple has loyal customers that only believe in
their products and are loyal buyers of the company. The company believes in setting new
designs, keeping up with the trends and accordingly create a new product that is both innovative
and trendy.
(9) Tesco – Entry and Exit from Japan:
Tesco stayed in for eight good years in Japan yet afterwards the company decided to exit Japan.
Japan is not the place for foreign investors. Large retail stores could not understand the behavior
of Japanese consumers. One of the many things, Japanese consumer behavior is as such that
they prefer new and fresh foods instead of canned goods, ready to eat meals, frozen food and
old baked items. They prefer to shop in trips rather than shop in bulk. People of Japan support
more of their local retail and they would like to buy the stuff from people they know or are
familiar with, hence foreign retailers have a hard time standing and competing in the Japanese
market. Even with the progression of time the Japanese consumer behavior has not changed
much. The human resource of Tesco could not keep up with the trends and could not fully
understand the culture of the country. Tesco stood good eight years trying to make their way
through in the Japanese market, but they failed and ultimately the company decided to pull,
and they exited japan for good. Although they do operate in Asian countries such as Thailand,
China, Malaysia etc. but that did not help them in serving in Japanese market.
(10) Toys-R-Us – Goes to Japan:
The American manufacturers found a way to target a specific sector of the Japanese market
which gave them success is the toy sector. As Toys-R-Us opened in Japan many children along
with their mothers and grandmothers came to the store on the first day. The setup of the aisles
was like any other Toy-R-Us store in USA. The good thing about the stores being operated in
Japan was the fact that there were many less hidden cameras as compared to USA as the
shoplifting in Japan is very minimal. Japanese customers were taken in awe after visiting the
Toys-R-Us stores. They found the large aisle, the large sized dolls and the huge toy store quite
unique and fascinating as people in Japan were not used to such large toy stores. Mainly the
selection of products and toys in the stores are imported, not only for USA but also from other
parts of the world. The expansion of Toys-R-Us led many Japanese toy manufacturers and
retailers to run out of business. Many small toy sellers in town went out of business as soon as
the Toys-R-Us opened in Japan. This was not at all appreciated by the local Japanese who were
into the toy business as this threat and competitor led them to their demise.

5. 4
(11) Nike – ERP Saga:
Nike being of the largest sports goods seller faced a very huge debacle only because of the
failure of the ERP system. Because of improper management of the software implementation,
Nike lost about $100M worth of sales and along with that Nike also witnessed a decrease in
20% of its share price. Because of this failure many of the Nike shipments were delayed and
many orders were miscalculated, this led to a huge disaster in Nikes supply chain cycles. Just
to recover from one software damage, it took Nike 5 years of hard work and investment of
millions just to overcome the problem that they had faced and just to get the software working
properly.
(12) Ryanair – Pioneer of Budget Airlines:
Ryanair believes in low cost ticketing. Their price makes them the price leader of the European
airline market. Their fleet consists of only Boeing 747’s hence their maintenance and parts are
supplied from the same suppliers for every aircraft. Ryanair is the leader in budget airlines in
the entire Europe, the airline aircrafts land on small scale airports rather than traditional
international airports. Considering the European culture, every country along with international
airports have domestic airports where airlines such as Ryanair land and run their operations
successfully. Ryanair interacts directly with the customer, they do not involve a third party or
a travel agent to make their sales. This makes them easier to sale at a cheap price considering
there is no commission as there is no agent involved when it comes to ticketing. Due to low
prices the airline has a high volume of customers which allows them to keep their prices low
and earn profits while keeping a low price. This strategy makes them the European market
leader. Along with such low fare charges, Ryanair believes in providing the best customer
service to their customers. Ryanair has reportedly very low rate of missing luggage cases and
very fewer annulments. These qualities give them a very big competitive advantage, hence
earning profits and making their way through into the market.
(13) The Demise of Blockbuster:
During the peak of Blockbuster, they owned over 9,000 video rental stores in US and had about
65 million registered customers. But as the time passed, technology grew over a decade
blockbuster went extinct. The company filed bankruptcy with over $900 million in debt. The
biggest competitor of blockbuster was Netflix, two things that differentiated between the two
and gave Netflix an advantage over blockbuster, first Netflix charged their customer with
subscription fee only and they used to deliver the DVD to their houses. While Blockbuster
charged their fee per movie and for you to rent a movie from them people would have to go to
their stores. Secondly, Blockbuster generated major share of its profits from charging late fee
from the customer. Netflix did not have that, and they did not charge late fee from it customers.
These qualities gave a very huge edge to Netflix over Blockbuster. As time passed Netflix
started innovating as well, they began streaming too while Blockbuster failed to keep with the
growing trends of the society and could not provide streaming services hence after a decade of
operations Blockbuster ran out of service.

6. 5
(14) Zara – Spanish Apparel Retailer:
Zara keeps up with the clothing trends of the society. This makes them outstand in the market,
Zara changes its clothing designs on every two to three weeks. This gives Zara an upper hand
on their competitors as they tend to change their designs after a bare minimum of tow months
or sometimes three. Zara has a vast selection of different designs which are trendy and up to
date as per the fashion requirements. Zara carries about 11,000 distinct items per year in
thousands of stores worldwide. The success to Zara’s business model is its highly efficient
supply chain. Zara has a highly automated distribution center known as “The Cube”. Zara keeps
an eye on the latest trends and the fashions. The latest designs are sent to the cube by the Zara
agents where the new clothing line is then designed and ultimately is shipped back to stores on
average of every two to three weeks. They keep their delivery time low and their supply chain
high effective hence Zara is known to be one of the largest retailers in Europe and now even in
the GCC countries.
(15) Seven Eleven – Japan Co:
Seven Eleven stores have a variety of products to offer to the customers. Seven eleven now
holds a major market in Japan. Although, the products are not directly shipped to the retail
stores. They are first taken to the distribution centers, and under on distribution center there are
about 50-60 retail stores. From the distribution centers the products are then shipped to retail
stores on temperature-controlled vans and containers considering majority of the products in
seven eleven are baked food items. seven eleven stores are replenished three times a day hence
it does not require safety stock or store inventory. Stores do not hold extra products that they
do not require, they make their orders to the distribution centers in the morning and receive by
afternoon. Stores must predict and plan a bit ahead when it comes to their day to day sales. But
this allows them to run more effectively and smoothly, their products sale out considering they
only sell fresh foods. Given Japanese consumer behavior, they prefer fresh foods over canned
or frozen ones.
(16) Blue Nile and Diamond Retailing:
Blue Nile diamond retailing targets individual markets and taps their own kind of audience.
Blue Nile is convenient for the customers who prefer to sit at home and shop online for their
jewelry. Blue Nile offers high quality diamonds with low markups as compared to their
competitors. Blue Nile also offer their customers with the option of customizing their own
jewelry. But their customers do not get the experience of retail shopping as Blue Nile provide
their services online. Considering Blue Nile is an online business, it has a very cost-effective
model because they have a very external relationship with their suppliers. They only order
supplies when required as per the company’s requirement. This saves them the inventory and
storing cost making the supply chain much cheaper and easier comparative to those whom must
manage and keep full inventories.

7. 6
(17) Managing growth at SportsStuff.com:
The core reason sportsstuff.com came into being was to sell children sports stuff at a reliable,
cheaper rate as compared to their competitors. It basically formed to target the parents that had
complained that they need to buy expensive sports equipment for their children on daily basis
as they keep outgrowing them. Sportsstuff.com started buying in bulk from retailers and
manufacturers and started selling them online. This resulted in earning profit and generating
large amount of revenue hence making growth for them more possible as the profits gave them
the opportunity to invest more. As the company grew, their demand started to increase and as
their demands were increasing they simultaneously needed more storage space to manage their
products. For them to run more efficiently and smoothly the company had to either rent a
warehouse or have their own warehouses for storage. The company had one warehouse on St.
Louis and the company decided based on their financials.
(18) W.W. Grainger’s supply Chain:
The company works on business to business level. The company revolves around receiving
and storing MRO products. The store it in their warehouses and ship it globally to customers
worldwide. The worldwide distributor of industrial products purchases approximately 1,7
million types of MRO products from approximately 5000 suppliers worldwide and stores them
in distribution centers. The company operates on a very large level. They have the large US
segment, medium US segment, Canadian segment and others which include Europe and
Mexico. The company’s outbound logistics involves warehousing and distribution of MRO
products.
(19) PIA Pakistan:
PIA consisting of jet fleets do require an effective supply chain to function better. In a country
like Pakistan, PIA has been able to manage the maintenance of aircraft fleet by themselves.
The PIA fleet consists of Boeing 777, Airbus A320 and ATR. Now all these companies have
their parts and aircrafts manufactured in their respective countries but in order to function more
effectively PIA manages an inventory of parts that could be required on urgent basis. Every
part of the aircraft has a designated number and if at all any part faces or gives any sort of
problem, the problem is reported by the flight engineer who then tells the technician about the
problem and weather it will require replacement of the part of just a fix. If at all they require
part replacement, the engineer tells the technician to fetch that very part and have it installed
on the aircraft. Because of this, PIA must manage a large number of inventories hence they
require warehouse space and that too a highly functioning secure one so that none of the
technical parts face any trouble. All the aviation parts are imported from the respective
companies of the fleet, but PIA does hold the ability to maintain, repair and sustain its own
fleet by the hands of local workers.