Comparing the Supply Chain Strategies: Drop-Ship and Private Label Models
The application of the direct-from-manufacturer model allowed for a more efficient analysis of the customer feedback: “the drop-ship model was not a large departure for the major luggage providers, and it gave them more immediate feedback from the customers than the traditional retail model” (Schroeder, Goldstein, & Rungtusanatham, 2013a, p. 37). Therefore, the given strategy created prerequisites for improving customer interface and demand management as two essential components of a supply chain (Schroeder, Goldstein, & Rungtusanatham, 2013b).
A closer look at the subject matter will also reveal that the drop-off framework served as a tool for reducing the number of expenses suffered by the entrepreneurship in the process of managing the supply chain, as it “eliminated the need for inventory” (Schroeder et al., 2013a). Consequently, the money spent to cover the costs of the inventory could be used to address other relevant issues and improve the general quality rates.
eBags in the Footwear Industry: Challenges and Major Issues
Entering the environment of the footwear industry would mean for the eBags company to alter its current financial strategy extensively since price sensitivity was the defining characteristic of the customers in the identified area. In addition, the organization will have to consider transferring from the online buying behavior to the environment of the live market (Triantis, 2016). As a result, the process of communicating with the clients, as well as the approach towards the distribution process, had to be reconsidered.
Finally, the fact that eBags had to raise awareness from scratch when entering the environment of a new market must be brought up. Taking over an entirely alien area requires a scrupulous and exhaustive market research, which is a rather costly process. Therefore, entering the footwear market was fraught with numerous challenges for eBags. Primarily, the company suffered significant changes in its supply chain management (Schroeder et al., 2013a).
Entering the European Market: A Hypothesis
eBags had big expectations for the opportunities that the European market supposedly had in store for the company since there was a niche that the entrepreneurship was going to fill: “A significant void existed in the European market space that eBags intended to occupy” (Schroeder et al., 2013a, p. 41). To be more accurate, the European luggage market will imply that the company will have to focus on promoting the concept of online purchasing in the designated environment, since the current behavioral patterns displayed by the buyers do not involve many online experiences. The challenge, therefore, concerns primarily convincing the customers to switch toward the proposed pattern of market behavior.
European Expansion: Decision to Be Made
Expanding into Europe is evidently going to be very tricky due to the necessity to reconsider the approach adopted in the SCM processes entirely. Customers need to be convinced to transfer to a different mode of purchasing. Moreover, the entrepreneurship will have to be persuaded that the product supplied by the organization is superior to the substitutes that the European market suggests currently (European Commission, 2015).
Despite the issues outlined above, the leaders of eBags should consider the idea of entering the designated market. The niche will be filled instantly, and the firm will be able to become a leader in the target area (Schroeder et al., 2013a). Consequently, impressive benefits can be expected.
Reference List
European Commission. (2015). Commission proposes modern digital contract rules to simplify and promote access to digital content and online sales across the EU. Web.
Schroeder, R., Goldstein, M. J., & Rungtusanatham, S. (2013a). Case study eBAGS: Managing growth. In Operations management: Contemporary concepts & cases (6th ed.) (pp. 35-43). New York, NY&: McGraw-Hill.
Schroeder, R., Goldstein, M. J., & Rungtusanatham, S. (2013b). Supply chain management. In Operations management: Contemporary concepts & cases (6th ed.) (pp. 424-515). New York, NY&: McGraw-Hill.
Triantis, J. (2016). Navigating strategic decisions: The power of sound analysis and forecasting. Boca Raton, FL: CRC Press.