market share Archives - Supply Chain Institute

In today’s always connected and hyper-competitive world, growing market share is a challenge for any organisation. Industry leaders understand that to get an edge over their competitors they need new and better insights into their business to help identify hidden risks and mitigate them and inform their decision making in everything from finding supply chain inefficiencies to uncovering new avenues for sales.

Having actionable intelligence can be the difference between success and failure, but sorting through the wealth of data every modern global business generates is a complex task and it is too easy to miss a critical information point. Business intelligence platforms help companies sift, sort, and process this data into different types of reports with actionable insights that highlight any weaknesses to address and strengths that should be built upon.

Here are four ways business intelligence can help a global business find success.

Help with product pricing

Pricing a product or service can be a difficult question. Business leaders need to find a price point within a specific market that is sufficiently low to attract new customers away from their competitors, but sufficiently high that they can drive profits and create a growing and successful company.

It is difficult enough to try and determine the best price within a single geographic market, such as the UK, but when you look to expand the business abroad, each geographical market has its own unique set of economic and market factors that need to be taken into account. The company will need to set a different price targeted to each local market conditions, and business intelligence can bring together all the relevant data and help stakeholders find the best pricing strategy for wherever they plan to launch.

Identify supply chain efficiencies and weaknesses

Modern supply chains cross continents, and a few days delay at a port in China or a ship that has taken a wrong turn can have roll on impacts throughout a business. The data at each point in this supply chain may be stored in different systems that may be region or sector specific, and trying to combine all that data can be a slow and laborious process.

Business intelligence platforms can help companies integrate these disparate sources of data and create insights such as where in the supply chain is the weakest link and where companies should possibly look for backup solutions should issues arise, and also where stock is left sitting in warehouses for long periods, costing money for storage and creating expensive inefficiencies.

Nurture customer loyalty

The sales and marketing investment required to find new customers is expensive, and so all businesses need to nurture their relationship with the current customers to maintain profitability. These relationships are more challenging to maintain for businesses with overseas operations, as priorities and social niceties vary significantly from region to region, with what some would consider good manners in one country sometimes considered rude in another.

The leader of well established global company understands that standardised customer engagement programmes often do not work well across borders, and local solutions need to be devised. However, maintaining a variety of different programmes around the world is burdensome and it can be a struggle to compare how each performs.

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Supply Chain News: Ford Takes New Approach to Supplier Risk Management

Both general trends and a series of recent events have more and more companies concerned with supply chain risk management.

Research has shown the impact of supply chain disruptions on a company’s share price,market share and/or brand image, for example.

In addition, a series of natural disasters and events, most notably the 2011 earthquake and tsunami in Japan that seriously hampered production at Toyota for months and impacted much of the rest of the global automotive supply chain as well, forced many companies to realize they had major risks in their supply chain of which they were not even aware, let alone had plans on how to mitigate those risks.

Major flooding in Thailand that seriously impacted the high tech supply chain, a volcano in Iceland that caused problems for hundreds or thousands of countries, turmoil in parts of the Middle East – all these and more focused companies on the need for better and deeper risk management strategies.

But there major challenges. How can companies mitigate risks such as natural disasters, or factory damage that simply cannot be predicted or modeled – the “unknown unknowns?”

And what level of investment makes sense to mitigate a given risk, or a series of risks combined? There aren’t many tools available for that, as most companies used a two-by-two type matrix, with likelihood of occurence (low and high) along one dimension, and level of business impact along the other.

The “high-high” quandrant was obviously the one that needed the most attention, and the “low-low” section the areas that could probably be ignored, but what about the other two “low-high” combinations? How much focus should they receive?

And even for the “high-high” areas, you are led back to the question of how much to invest in mitigation, and the lists of risks usually leaves out the tough “unknown unknowns,” naturally enough.

In 2012, Dr. David Simchi-Levi of MIT came up with a model and approach to answer these and other tough risk management challenges. Using what he calls the Risk Exposure Index (REI), the tool enables companies really for the first time to quantify the risks in their supply chain, especially those stemming from the unknown unknowns, such as natural disasters, factory fires, etc.

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