E3: Chapter 5 – Knowledge Check: Strategic networks and platforms

Ridex is a company that rents motorbikes and scooters to individuals through a small chain of stores.

In order to improve customer service levels, The Marketing Director (MD) has told the Marketing Manager (MM) that she must change the marketing approach from ‘transactions marketing’ to ‘relationship marketing’. The MM is unsure what the MD means, and has asked for your advice.

Which TWO of the following relate to relationship marketing?

FRT manufactures novelty toys and joke items. It currently sells to individual consumers through a small chain of stores. The market that FRT operates within is very small and FRT is aware that there is little scope for sales growth. However, FRT does have a number of rivals and the company is concerned that it is failing to create customer loyalty. FRP’s owner, U, has recently been considering whether to increase the organisation’s use of information technology in its downstream supply chain.

Which ONE of the following uses of information technology would be most suitable for FRT’s downstream supply chain?

JEN manufactures shoes. It purchases leather from tanneries and then sells the completed shoes onto shoe retailers and supermarkets, who sell them onto the end consumer.

JEN’s new CEO has released the following statement regarding JEN’s supply chain:

‘Tanneries play a key part of our downstream supply chain. It is vital that we consider their production capacity, as well as whether they are making sufficient returns. We could also consider the use of EDI with our major corporate customers, which would likely increase efficiency and reduce costs.’

Which ONE of the following options best describes the new CEO’s understanding of JEN’s supply chain?

Elbow is an online retailer of wine.

Elbow has an app, where customers can select the menu they are planning to serve, from a large database of dishes, and the app will recommend which wine (or wines) should ‘pair’ with (complement) each course. The Elbow app includes details of the wine type, region, producer and grape variety. It also has independent reviews, and tasting notes, from other users of the app. These reviews are totalled into an average rating of between 1 and 5 ‘stars’. Elbow monetises its app by linking users to websites selling wine. Elbow takes a small commission on sales, from the seller.

Analyse the above information and identify which of the ‘six markets’ Elbow is utilising technology to target, in its ecosystem.

AAA is a specialist car manufacturer, based in G, a country in Europe. AAA manufactures most of the components of its car in-house. The main exception is the car’s engine, which AAA buys from a major car manufacturer and then sends them all to a single, highly specialised company (BBB) for modification and upgrades. While the engine is relatively expensive, it is the work of BBB that represents the single most significant cost of producing each car. AAA has, on occasions, paid BBB the equivalent of 25% of the final sales price of a car. The sales manager has stated BBB’s work is one of the cars ‘unique selling points’.

Based on the above information, evaluate the strength of the bargaining power of suppliers at AAA. (Select ONE of the following options).

H bakes and sells bread and other wheat-based baked goods. It is currently undertaking detailed supply chain management and has identified a number of partner organisations that form its supply chain.

Which THREE of the following organisations would form part of H’s downstream supply chain?

QII is an electronics manufacturer. It produces circuit boards for many other retailers and is the largest single user of palladium – a rare metal – in the world. QII purchases its palladium from two specialist companies who process palladium which they, in turn, have purchased from palladium mines around the world. Palladium prices are volatile and QII have typically been able to negotiate a low price for the metal they purchase due to their significant buying power.

QII has recently started an analysis of its supply chain and one of its managers has suggested that the company monitor the cash flow and profitability of all QII’s upstream and downstream partners.

Which ONE of the following reasons would best justify the manager’s suggestion?

KKB is a company which operates passenger trains in country G. It has been granted an exclusive ten-year franchise by the government of country G to run trains in the East of the country. It is considering launching an e-procurement system for its purchases of diesel (necessary for the running of around 45% of its trains). There are a number of suppliers of
diesel, though KKB has historically only ordered diesel from one of these (using a manual ordering system). Diesel prices vary significantly between suppliers and on the open market.

Storage of diesel is expensive, but KKB has been forced to keep a significant amount in inventory as its current supplier cannot always guarantee prompt delivery.

Which of the following statements relating to KKB’s e-procurement system is correct?
(Select ALL that apply).

Which THREE of the following are included within Payne’s six markets model? 

VVC is a television broadcaster in country B. Much of its revenue comes from advertising sponsors who will pay higher fees for their adverts if the number of people watching VVC’s television programmes rises. VVC has recently been informed of a new mobile application that large numbers of people in country B are using. Individuals download the application to their mobile phone and it gives them tailored suggestions as to the best programmes to watch on television each day.

According to Payne’s six markets model, which ONE of VVC’s six markets would this new application be classified within?

Residents of country U eat large amounts of food from takeaways each year. These are small, usually family owned, restaurants that cook food and then deliver them to the customer’s home, typically for a small fee. Many of these restaurants have no web presence and only accept cash payments. Unfortunately, many customers now wish to be able to order online and pay by credit card, as the use of cash becomes less popular. HGH has recently launched a new website. This allows customers to browse the menus of nearby takeaways, and place online orders, which HGH then communicates to the
takeaway. HGH accepts card payments from customers and then transfers these funds directly into the takeaway owner’s bank account.

HGH’s website is an example of which ONE of the following?

JAF sells cosmetics to individual consumers through a chain of stores in every major town and city in country H.

Which TWO of the following are suitable examples of downstream supply chain management for JAF?

Computex plc manufactures tablet computers. The computers are made in a factory in India. They are then transferred by the factory to Computex’s sales teams who sell them to retailers across the world.

According to Payne, which ONE of the factory’s six markets is made up of Computex’s sales teams?

Q operates a pub in the capital of country G, serving a range of premium alcoholic drinks. Drinks can be extremely expensive, with the average margin around five times higher than a typical pub. Q has identified that the majority of its customers view attending this pub as a way of showing their colleagues that they earn a large sum of money.

According to Maslow’s hierarchy of needs, which ONE of the following needs is Q’s pub fulfilling for its users?

Organix is an organic food producer based in Zimbabwe. It seeks to gain competitive advantage through offering consumers total confidence over the source and quality of ingredients, from all elements of its supply chain.

Which ONE of the following technologies may be introduced by Organix to enhance its competitive advantage?

F has recently purchased a new mobile phone manufactured by OOL plc. However, one week after the purchase she discovered that a new model of mobile phone had been released by one of OOL plc’s rivals. This new model had more features than the one she had bought, leading her to regret her purchase of one of OOL’s mobile phones.

Which ONE of the following is F experiencing?

Aroma bakes and sells bread and other wheat-based baked goods. It is currently undertaking detailed supply chain management and has identified a number of partner organisations that form its supply chain.

Which THREE of the following organisations would form part of Aroma’s downstream supply chain?