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Nguyen, T. T. H. (2017). Wal-Mart’s successfully integrated supply chain and the necessity of establishing the Triple-A supply chain in the 21st century. Journal of Economics & Management, 29, 102-117.
The article seeks to examine the fundamental concepts of supply channel used by Wal-Mart and how it has leveraged this to achieve a competitive edge. According to the article, supply channel systems are an essential component in every production and a marketing organization. Producers are not concerned with the increasing cost of production but put more focus on meeting the needs of the consumers such as the products delivered at the right time, the right location as well as having affordable products (Nguyen, 2017). The producer can decide on different supply channels depending on the ease and effectiveness of each.
The principal objective of any supply channel is to connect the producer of a given product and the final consumer. There are four main types of marketing channels required to reach the target market. For instance, selling directly to the consumer involves showcasing and demonstrating the product and services to the consumer. Direct selling benefit customers more since the customers get clear information about the product and, therefore, they are easily convinced to buy the products. Besides that, direct selling shortens the distribution channel and thus ensures that goods reach the customer at the right time.
According to the article Wal-Mart company uses an integrated supply chain. This has enabled it to sell its product to its customers from the different centers which are at direct contact with the consumers. With this, it ensures that customers are served well and also after-sales services such as free delivery. It has enabled the company to serve more than 250 million customers and even manage more than 1050 retail stores around than the globe (Nguyen, 2017). The use of intermediaries is another critical component of marketing strategy that involves wholesalers and retailers buying goods directly from the producer and after that reselling them to the users. The channel starts from the producer to the consumer with intermediaries such as wholesalers and retailers. Intermediary selling is the primary distribution channel used by Wal-Mart Company in getting products to consumers. While dual distribution implies to the producer or the wholesalers using different channels at the same time to get the product to the consumer. It may involve direct selling and likewise selling to retailers from which the consumer can easily access the product. As an intermediary, Wal-Mart is in one of the channels used by producers in getting goods to consumers cutting the distribution channels. On the other hand, reverse channel flows from the consumer to the intermediary to the user. In this case, the producer is not involved because the channels entail reselling of a second-hand product or commodities that are to recycle.
In a bid to ensure that products reach customers at pick up points on time; the company has used various logistics techniques. These include innovative
cross-docking logistics technique, REMIX technology, and satellite network. All these logistics techniques have improved the efficiency of distribution, and
the approach to dispensing the high-velocity goods.Nguyen, 2017)(With more than 3,500 trucks serving for distribution centers, Wal-Mart has been able to
ensure that products reach customers at pick up point on time.
Bad Actors in the Channels of Distribution: Conceptual Clarity, Demarcation & Antecedents of Abuse
Baker, B. L., & Edwards, C. J. (2018). Bad Actors in the Channels of Distribution: Conceptual Clarity, Demarcation & Antecedents of Abuse. International Journal of the Academic Business World, 12(1), 1–8. Retrieved fromhttps://search.ebscohost.com/login.aspx?direct=true&AuthType=shib&db=buh&AN=130038939&site=ehost-live
Main aim of this research is to focus on positive relationships between the distribution channel marketing members. Destructive actions of channel members will have a significant negative impact on firms functioning and business. For example, there are several negative effects on workers who work under abusive management. Workers will not get encouragement from this type of management. This results in poor work performance. Employees feel depressed all the time at work and they will have less job satisfaction. Managerial abuse is harmful to employees and the consequences are harmful to organizations. Employees will leave the company if they face these types of problems. Organizations have to hire more people and spend more money on newly hired people training and other benefits. Other consequences of managerial abuse are less productivity from employees and increased absenteeism. (Baker et al, 2018. P1). I would like to share one of my previous work experience. Management was very flexible and employees used to spend 1-2 hours extra to give more productivity for company growth. After few years company acquired by some other organization and management was very strict about hours of operation and employees used to get over workload. Management used abusive language even if they find employees are coming late by 2-3 minutes. Few employees used to drive 50-60 miles one way to come to work. Most of the efficient staff left the company and the company hired more people and spent more money on their training for 3 months. That was a huge loss for the company in terms of money and productivity.
Abusive acts will have a harmful effect on partners of the business. Organizations won’t be able to reach their goals if they have abusive channel partners. Large business organizations like Walmart and Amazon always receive criticism in media for influencing the members of supply chain and marketing channels (Baker et al, 2018. P2). Punitive acts will generate solutions for problems in the supply chain. For example, enforcing late fees is a punishment but this is designed to provide deliveries on time. This is a benefit to all parties in the channel group. Punitive actions look destructive in the short run but will provide benefits to whole system in the long run. It is important to investigate from target perspective when studying abuse acts. For example, supplier perception to late fees determines supplier reaction either abusive or punishment act. If the supplier considers late fee as punishment, then the action is merely punitive (Baker et al, 2018. P4). Emerson explained power dependence relationship. If member A is dependent on member B, member-B appropriate behavior is required to reach the goals of member A. According to Emerson, dependence is a place where power resides. Dependence of member-A on member-B is directly proportional to member A’s motivational investment in goals mediated by member-B. Dependence of member-A on member-B inversely proportional to the availability of goals to member-A outside A-B relationship (Baker et al, 2018. P5). A few propositions have presented as follows.
- Few basic incidents will be reported from less powerful channel member if the powerful channel member is more committed to the relationship.
- Powerful channel member abusive tendency will raise as the threat of being caught declines.