In: Economics
1. Select any 'functional product of your choice. What should be the supply chain strategy for it? Discuss the salient features/characteristics of such supply chains. Can you give any example for such type of supply chain in UAE?
2. Select any ‘innovative product of your choice. What should be the supply chain strategy for it? Discuss the salient features/characteristics of such supply chains. Can you give any example for such type of supply chain in UAE?
( 1 ) Functional products are widely available in retail outlets with a more stable and predictable demand along with long durability for the product. However, markets for such products are very competitive with very small margin of profit for the firms.
Let us choose mattresses as a functional product. Its supply chain strategy would involve production and collection of raw materials such as cotton, foam, cover clothes for the mattress, and at the end packaging and transportation to the retail stores.
In the UAE there are many products that are directly imported from countries such as India and the neighbouring countries, whereas there are some products that are manufactured and sold directly in the country. For example, crude oil production and its export.
( 2 ) Innovative prouducts are not widely available in the retail outlets and that is why the demand for such products are unpredictable along with small durability of the product. Markets are not competitive and firms may have ability to earn higher profit margins on sale of such products. For example, launch of new and expensive sports car.
Its supply chain may not be very widespread. The firm may assemble the raw materials from different suppliers without any predictable pattern of consumption of such commodity.
The sale of sports cars in the UAE involves direct import of such products and sle at the retail outlets.