Achieving Competitive Advantage
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Achieving Competitive Advantage
Competitive advantage helps organizations take the lead in the marketplace and stay one step ahead of the competition. Dell and Netflix are organizations that have thrived on using competitive advantage through their supply chains. This paper will discuss Dell and Netflix competitive advantage, how supply chain is used to gain competitive advantage, and how ethical concerns, globalizations, diversity, and e-business are part of their supply chain processes.
Until recently Dell was the worlds largest PC manufacturer before losing its spot to HP. Dells process of building the “perfect” PC tailored to each customers needs and the ability to deliver them efficiently gave Dell the competitive advantage to be the worlds largest PC manufacturer. HP adopted this process along with its retail operations helped overtake the market lead.
Netflix is a company that has built its foundation on supply chain. Netflix offers an online movie rental service for a monthly fee depending on the number of movies a customer selects to have out at a time. Blockbuster has adopted this process and like HP is using their retail operations to position themselves are number one in the market. Dell and Netflix use their supply chain effectively to gain competitive advantage.
Sanders describes Dell as “The company traditionally uses its supply chain and manufacturing model as a competitive advantage” (Sanders). “Dell has formed a new global operation to take responsibility for all manufacturing, procurement and supply chain activities, including the vendors nine manufacturing facilities (Sanders). This process looks to create a more efficient supply chain by managing supply chain globally as opposed to regionally; which is the current process.
The ability of Netflix to offer no late fees and have sufficient inventory is important to their success. “Netflix operates 42 shipping centers located throughout the United States. More than 90% of Netflix subscribers live within one-day delivery postal zones” (Netflix.com). The shipping centers are the competitive advantage for Netflix because movies can be turned around to customers in a day. As Netflix grows they will expand their operations to provide more shipping centers. Many other factors come into play in the development of supply chain such as ethical concerns, globalization, diversity and e-business.
Ethics is a major part of any organization. Is it ethical to copycat a competitors process? It is common practice for companies to look at industry standards and what competitors are doing to improve not only supply chain processes but organizational as well. Looking to use suppliers of competitors to gain an edge or insight is a concern. Globalization is important in any company. In supply chain, become global and expanding operations is complex but important, the best practice is to manage a global operation through one