Discuss about the Business Method for Efficient and Direct.
Arrow Electronic is a Fortune 500 company that originated in the United States of America. The company’s main business dealing is to distribute electronic components as well as computer products. Arrow Electronics was founded in the year 1935 under the name of Arrow Radio in Manhattan, USA.
The following report is going to analyse business and marketing management of the aforesaid company with the help of authentic business models and theories. The report is designed in two segments- the customer analysis and the company analysis. Both the area are going to be covered with the help of statistical and core management study. The report basically aims to analyse certain issues faced by the company during its business performance and it will further try to recommend some business plans which can help the company get rid of those problems. Since Arrow Electronics is involved in supply market, the paper will look into the supply chain management of the company that will be analysed through Porte’s vale chain model, ARA model and other major business models and theories (Zhan et al. 2015).
Customer satisfaction and profit maximisation is the major objective for a profit making organisation. Arrow Schweber’s customer analysis can be done with the following models:
Basic 8-steps of buying or purchasing process of a business organisation comprises of the following:
Identification of Need
Selection of Specific Product
Appointment of Purchase Team
Technical Specification
Budget Analysis for the Purchase
Investigation of the Potential Suppliers
Solicitation of Bids
Awarding the Contract (Lovelock and Patterson 2015)
In case of the identification of the market need, A/ S has strictly studied what its customers want from the company. In order to sell the price sensitive products in the market, the company has directly approached to the customers.
The company is quite precise in selection of the specific product. Arrow has been doing business in the electronic components only and the business method has not changed for a long time.
The company has appointed a well trained purchase team that has been deployed to analyse the current situation and mode of the market and customers.
Technically Arrow is quite specific about the sales and purchase of its products. The company performs its customer analysis through the assistance of technological device.
Every year the company sets a budget for the purchase and the budget is always specific about its market target.
Whether the suppliers are potential or not, the company does generally investigate it. Potential suppliers are always sought after.
The term Customer Relationship Management (CRM) defines the relationship between any organization and its customer. According to many reports, CRM plays a crucial role in the development of the organization (Dabholkar 2015). CRM concentrates on customer’s information. Managers often use such information to identify their loyal consumers and provide them quality service. The term CRM has come to the limelight in last few years. CRM often works as a weapon to the organization to observe the requirements and behaviors of the consumers. The effectiveness of CRM increases the margin of customer satisfaction. The identification of customer’s demand and maintain a healthy relationship with the customers has become easy due to the emergence of Internet. It has become easy to keep information about a large number of customers due to the innovation of computers and internet (Mullins et al. 2014). Customers can provide their useful feedback via internet, so organization can easily rectify their mistakes. Thus, the relationship between customers and organization has become very transparent and effective. It is evident in the case study that they maintain unique relationship with their customers. The management of Arrow pay special attention to the demand of their consumers (Khodakarami and Chan 2014).
Supply chain management signifies the flow of any product or service. This procedure consists of various steps, such as collecting raw materials, providing them to the firm where the product will be processed, collecting the final product and delivers it to the distributors or the consumers. At first, Keith Oliver has used the term supply chain management in an interview in 1982. According to some reports, supply chain management is a set of a system in which every element are related to each other and work together to achieve a common objective (Monczka et al. 2015 ). The development of every organization is dependent on supply chain management. It is responsibility of the managers to maintain a transparent service in the supply chain. In this competitive era, every organization must understand the importance of an effective supply chain management. It provides the organization a great opportunity to compete with other industries in this era of of globalization. The flow of supply chain management is divided into three parts- i) The information flow ii) the finances flow iii) the product flow. Supply chain management strategies are considered as backbone of every organization (Michael 2014). The scenario of business development has been changed in last few decades. Every organization is relying on the supply chain management to develop their organization (De Backer and Miroudot 2014).
Michael Porter in 1985 designed Value Chain in order to examine systematically the way competitive advantage develops and to identify where value is added in an organisation. The value chain is depended on the process view of organisations where the manufacturing company or service is seen as a system that is made up of various other sub-systems, each with transformation processes, inputs and outputs involving the procurement and consumption of resources.
Activity based management and the balanced scorecard underlines the concept of value chain. But this model has also received criticisms and its most significant weakness is that it cannot be applied easily to service providing organisations. In order to overcome this problem, Charles Stabell and Oystein Fjeldstad, in 1998 developed an alternative model of value chain for professional services firms.
According to Stabell and Fjedstad, organization that are based on professional service is more like a “value shop”, that is a workshop and not a retail outlet and thus it mobilises resources in order to solve specific problems. This involves a chain process that involves the reiteration of a standard set of activities until a satisfactory solution is reached. This model applies to many organisations such as consultancies, architects and legal firms, and even to those organisations whose primary objectives is to identify and make use of opportunities, such as developing a drug, finding oil and others. The support activities are same as in Porter’s model only the primary activities are described differently (Smith 2016).
Conclusion:
The customer relationship and sales management in the company is linked with each other. Since the company tries to enhance its sales and purchase in different ways, both the marketing elements are required to be fulfilled with different marketing and sales related ideas. The eight steps of purchasing plan are the determinant of creating need in the market. On the other hand, the company needs to manage its supply chain in order to strengthen the potential suppliers. Through value chain model designed by Porter it has been clearly understood that the company does not set its limit in procuring best of the components from its supplier. In order to maintain the compatibility of the product it sells in the market, the company has every possible provision of keeping and storing. Thus the external and the internal factors of supply chain are ensured.
Reference:
Dabholkar, P.A., 2015. How to improve perceived service quality by increasing customer participation. In Proceedings of the 1990 Academy of Marketing Science (AMS) Annual Conference (pp. 483-487). Springer International Publishing.
De Backer, K. and Miroudot, S., 2014. Mapping global value chains.
Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education
Khodakarami, F. and Chan, Y.E., 2014. Exploring the role of customer relationship management (CRM) systems in customer knowledge creation. Information & Management, 51(1), pp.27-42.
Lovelock, C. and Patterson, P., 2015. Services marketing. Pearson Australia..
Michael, J., 2014. Business method for efficient and direct buying, selling renting and leasing real estate. U.S. Patent Application 14/323,899.
Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and supply chain management. Cengage Learning.
Mullins, R.R., Ahearne, M., Lam, S.K., Hall, Z.R. and Boichuk, J.P., 2014. Know your customer: How salesperson perceptions of customer relationship quality form and influence account profitability. Journal of Marketing, 78(6), pp.38-58.
Smith, S., 2016. Sandra Smith.
Zhang, X., Han, X., Liu, X., Liu, R. and Leng, J., 2015. The pricing of product and value-added service under information asymmetry: a product life cycle perspective. International Journal of Production Research, 53(1), pp.25-40.
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