3. Brand Differentiation/Loyalty
Pricing is just one of several ways for a company to differentiate itself from the competition. Another way in which a company can differentiate itself is by promoting brand loyalty. Brand loyalty encourages repeat customers and helps to create long-term profitability. A major benefit of customer loyalty is that loyal customers often refer new customers to a supplier.
4. E-Procurement
E-commerce technology has provided organizations with the capabilities to improve the effectiveness and efficiency of the logistics and purchasing functions. Firms such as Wal-Mart and Amazon.com are currently outsourcing delivery, relying on logistics companies to deliver the product to the customer. E-procurement is the term currently used to denote the process of using the Internet to integrate supply chain partners through collaboration on key initiatives and to improve the purchasing process within organizations. A major benefit of e-procurement is the cost savings aspect. In fact, organizational costs of placing orders can be reduced by as much as 75% through utilization of the Internet. It also offers organizations the ability to use the Internet to search for the best pricing available. The overall advantage of practising e-procurement is the fact the more automation allows partners quicker access to information. E-procurement also results in better communication among supply chain partners and consequently better supplier-customer relationships. Organizations are able to maintain tighter control over the purchasing process. Only those suppliers that organizations deem to be “preferred suppliers” will be able to transact business with the organization. Currently, e-procurement is being utilized primarily for the purchase of office supplies and items which are used for repair and maintenance of the organization’s facilities (Smock, 2001).
5. E-Fulfilment
Today’s marketplace offers new challenges to organizations. A key initiative organizations have undertaken to better compete is that of “E-fulfilment”. It can alter the way customers purchase as well as the manner in which manufacturers deliver the product to consumers. Technology has also allowed distributors and suppliers to focus on providing value-added services to complement their product offering. E-Fulfilment contrasts with traditional fulfilment. Suppliers are now capable of accepting order online via the Internet and having the information sent directly into their order processing systems, something not possible via traditional fulfilment. Orders placed via e-fulfilment tend to be smaller than those placed via traditional fulfilment channels. The expected and actual lead times are shorter than those witnessed via traditional fulfilment.
6. Value Nets
Firms are continually seeking out new ways to attract and maintain customers. A development that has proven to be effective in attracting and servicing customers is that of the Value Net. A value net is a network consisting of partnerships, which assists in the transfer of information among supply chain partners on a regular basis. The main benefit of a value net is the competitive advantage it offers to all participating organizations. The primary concept behind a value net is its ability to allow firms to address and solve customer problems, rather than just selling a product. A popular trend in the marketplace to address niche markets is that of the online-service company. This form of business interacts directly with the customers primarily via the Internet. The advantage of this form of business is that it provides enhanced service to the customer in the form of direct door-to-door delivery for customers. This is a distinct competitive advantage that firms are looking to exploit
In the world of e commerce companies can use the internet technology to improve the efficiency and effectiveness of particular value chain activities.There are commercially available hardware ad software specifically meant to address management problems associated with the supply and distribution chain or the value chain system as a whole.
Specifically,the Internet technology benefits business organizations in the following ways:
- It is a powerful tool for better supply chain management.
- It is critical to internal operations such as just in time inventory,gear production schedules and production quantities to buyer orders,more accurate monitoring of buyer preferences and shifts in demand and
It is extremely useful for collaborative data sharing with distribution channel partners-online systems reduce transactions costs.
