In: Operations Management
Choose a business with which you are familiar. Describe the ways in which this business has advantages or disadvantages in relation to:
(a) visibility
(b) cost (in terms of likely premises expenses and transport costs)
(c) proximity to customers
(d) proximity to suppliers
(e) proximity to any complementary businesses.
Let us take the example of Declathon sports retail business.
(a) visibility: This business has got good visibility as there are only a few players in the sports retail market who are organized on such a large scale.
(b) cost (in terms of likely premises expenses and transport costs): The cost of this business in terms of premises is very high because most of the store location is in the city or just outside the commercial centers of the city. Therefore premises expenses are very high. Transportation cost is similar to other retail store but it has more cost because the sports item needs specialized transportation.
(c) proximity to customers: They have very close proximity to its target customer as the store locations are near to the place of residences of the customers i.e. city and most of the customers for them are located in the city only. They have good B2B business also and for these B2B transactions they are the suitable partners as their store is in city limits.
(d) proximity to suppliers: Their supplier proximity is not very close as for the sports good suppliers are mostly located in one part and from there the supplies has to be made to all the stores spread across the nation. Therefore in terms of physical proximity, they are far situated because they can not source such items locally in the individual city of operation. but in terms of a close relationship with their vendors, they have a very good relationship and close tie-up with the vendors.
(e) proximity to any complementary businesses: Yes they are not situated very far from the complimentary business. if we see their store locations they are nearby shopping malls mostly and in the shopping malls there are different retails stores that sell the sports items. Therefore they don't prefer the distance from complimentary business rather they believe in proximity with customers.