The company to be considered here is the Amazon, an online retailing platform operating in different corners of the world.
Elements of supply chain
- Raw material producer
- Transportation of raw material to godowns
- Capital resources
- Value addition
- Shipping the order to customers
Steps involved in manufacturing and shipping the order
There are forward and backward linkages for processing the raw material and converting them into manufactured products (Kim, Wagner, & Colicchia, 2018). The local manufacturers and other big companies are registered over the online platform of Amazon. The value is added to the raw material in their factories and the resultant products are shipped to customers without actually reaching the office of Amazon. These forward and backward linkages deliver the products on time within 3 or 4 days of placing an order.
Risks behind not completing certain activities on time
a) Loss of brand image- if the product is not reached an appropriate time, the company will lose its brand image.
b) Loss of confidence among customers- customers place an order with the confidence of timely shipping(DuHadway, Carnovale, & Kannan, 2018). If that does not happen, the customers will hesitate to place next order
c) Economic loss- the customer can reject the delayed delivery so there is a loss of profit.
d) Bearing an additional cost of free shipping- rejection by the customers will lead to the bearing of the additional cost of shipping without making any profit.
Advantages of international operations
a) Market and financial security- if there is turmoil in one country, the company can count on other countries where such turmoil is not present. So internationalization assures market security resulting in financial security.
b) Large market- the market automatically becomes big resulting in more sales. Hence more profit.
c) High demand- the demand gets increased due to the increased size of the population leading to more sales.
d) Economies of scale- the mass production of goods at large scale resulting in economic benefits.
e) Generation of revenue- more sales automatically leads to more revenue generation.
f) Brand image development- the company attains multinational character leading to brand image development.
g) More profit – more sales and more revenue leads to the generation of more profit.
Disadvantages of international operations
a) Language problems- the language barriers may reduce the opportunities of business resulting in loss.
b) Cultural barriers- if the cultural sentiments are not harnessed properly, the products supplied in one country may become a cause of dissent against company in other country.
c) Legal problems- more countries means more legislation leading to bearing of additional legal cost(Kumar & Paraskevas, 2018).
d) Complicated technical procedure- more complexities are involved in multinational companies as far as technical procedures are concerned.
e) Rivalry with local producers and sellers- the local producers and retailers may be absorbed by the big corporate resulting in bad image and protests by non-profit organizations(Kaufmann, Esslinger, & Carter, 2018).
DuHadway, S., Carnovale, S., & Kannan, V. R. (2018). Organizational Communication and Individual Behavior: Implications for Supply Chain Risk Management. Journal of Supply Chain Management, 3-19.
Kaufmann, L., Esslinger, J., & Carter, C. R. (2018). Toward Relationship Resilience: Managing Buyer?Induced Breaches of Psychological Contracts During Joint Buyer–Supplier Projects. Journal of Supply Chain Management, 62-85.
Kim, S., Wagner, S. M., & Colicchia, C. (2018). The impact of supplier sustainability risk on shareholder value. Journal of Supply Chain Management, 43-49.
Kumar, A., & Paraskevas, J.?P. (2018). A Proactive Environmental Strategy: Analyzing the Effect of SCM Experience, Age, and Female Representation in TMTs. Journal of Supply Chain Management, 20-41.