Question

What are: Cost Pressures and Pressures for Local Responsiveness?

Answer 1

Cost pressures : The costs behind carrying out the different functions of logistics and supply chain management and ensuring that the end product reaches to it's customers. Costs pressures arise, when the consumers have low switching costs , this makes the customers powerful and the business needs to take extra measures to ensure that the customers remain loyal to them ,as switching is easy. In the areas where, the cost of production is low, is very competitive so major costs exists in these locations.

The pressure for local responsiveness is: This pressure arises due to the differences in the tastes and preferences of the consumers,the business can have different distribution channels, this can also create pressure. The differences in the infrastructure and business practices followed by different organizations. They also need to satisfy the governments demand to survive doing business.

For example, Lenovo faces the pressure of local response by catering to the customer tastes and preferences and customizing their products accordingly. They have to adjust to the differences in the culture of the people as well as they need to improvise so that they can beat the local competition, which has already captured the market.