Chapter 1, Problem 2DQ

Summary Introduction

Interpretation: The competitive priorities of the online platform and the focus of its operations strategy is to be identified.

Concept Introduction:

Competitive priorities can be defined as the dimensions that should be included in a production process to fulfil the needs of the internal or external customers now, and in the future. This concept is crucial in goal achievement and ensuring business performance in the long run.

Explanation of Solution

Competitive priorities of the online platform A are as follows:

1. Low-cost operations:

It has a low-cost base due to the absence of physical retail outlets. Further, the online marketplaces have allowed the online platforms to sell more units without an increase in marginal costs. This has led to a decrease in the consumer prices.

2. Delivery speed:

One of the key reasons for its success has been due to the use of superior logistics and distribution networks. As a result, the order fulfilment rates have become better leading to a competitive edge over other players.

3. Variety:

It has an extensive range of products which is one of its key strengths. Its products are sold by a wide variety of sellers across several global markets. Moreover, it has also adopted a strategy in Asian markets that suits their local needs.

The areas where its operations strategy should focus on are as follows:

The key focus should be on winning the competition despite the pressure from other players in the market. The main reason for this is the imitable business, and hence, the company should plan its operations to create differentiation with other players.

Although it is operating in a low-cost operation model, still there have been losses recorded in certain parts of the world such as India. It offers free shipping to its customers and, as a result margins have eroded. Therefore, the company should increase their margins at least for high risk products or else focus on reducing shipping costs.