Flipkart strengthened its supply chain network ahead of the festive season to better meet increased consumer demand. This would allow Flipkart to cater to more sellers and MSMEs, satisfy more customers, expand further across India, and better compete with rivals like Amazon. However, Flipkart also faced risks like poor infrastructure hampering delivery and cash-rich competitors counteracting its strategies. Flipkart needed to consider the value provided to customers, costs of meeting needs, and optimal network design to manage risks and maximize benefits from its strengthened supply chain.
Flipkart strengthened its supply chain network ahead of the festive season to better meet increased consumer demand. This would allow Flipkart to cater to more sellers and MSMEs, satisfy more customers, expand further across India, and better compete with rivals like Amazon. However, Flipkart also faced risks like poor infrastructure hampering delivery and cash-rich competitors counteracting its strategies. Flipkart needed to consider the value provided to customers, costs of meeting needs, and optimal network design to manage risks and maximize benefits from its strengthened supply chain.
Flipkart strengthened its supply chain network ahead of the festive season to better meet increased consumer demand. This would allow Flipkart to cater to more sellers and MSMEs, satisfy more customers, expand further across India, and better compete with rivals like Amazon. However, Flipkart also faced risks like poor infrastructure hampering delivery and cash-rich competitors counteracting its strategies. Flipkart needed to consider the value provided to customers, costs of meeting needs, and optimal network design to manage risks and maximize benefits from its strengthened supply chain.
Flipkart strengthened its supply chain network ahead of the festive season to better meet increased consumer demand. This would allow Flipkart to cater to more sellers and MSMEs, satisfy more customers, expand further across India, and better compete with rivals like Amazon. However, Flipkart also faced risks like poor infrastructure hampering delivery and cash-rich competitors counteracting its strategies. Flipkart needed to consider the value provided to customers, costs of meeting needs, and optimal network design to manage risks and maximize benefits from its strengthened supply chain.
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To understand why flipkart strengthened its supply chain network ahead of festive season it is
imperative to understand what are the factors influencing the distribution network design:
Advantages to Flipkart:
1) Deeper Capabilities: These newer capabilities will act as an important support system thousands of sellers, MSME (Micro, Small, Medium Enterprises). Seeing this a lot of traffic in terms of business opportunities would be diverted to Flipkart, as more and more producers would line up to advertise their good on Flipkart.
2) Higher Satisfaction of Consumer Demand: Flipkart, successfully realizes the sentiments of
Indian audience, and how this season leads to higher purchases. It’s through common buyer perception and behavior that higher demand would be generated during this period. If its network is strengthened it would be able to cater to this increased demand.
3) Contribute to its rapid expansion: Flipkart across the country has been able to expand its presence from a state-based startup to a pan India entity. It not only contributes towards its popularity but also increases a positive sentiment towards the brand image of Flipkart thus contributing towards its rapid expansion.
4) Competitive Analysis: With an increased network capability Flipkart can now go ahead and compete with its rivals such as Amazon, Jio and Big basket. Thus with this increased cavalry Flipkart can fight to increase its market share
Disadvantages for Flipkart:
1) Poor Infrastructure: Flipkart faces the risk of not being able to cater to the number of orders received and supplied because of its poor infrastructure capabilities. The number of fulfilment and sortation centers 70 in this case isn’t strong enough to face any extreme adversity.
2) Cash Rich Competitors: Every move of Flipkart can be countered by its rivals who have deep pockets to meet any increase in supply chain strategy. They really need to be vary of the amount that they can actually take in to their plate.
3) Managing Supply Chain Volatility: The overall market usually experiences a surge in energy and a different vibe during the festive season irrespective of the occasion or place. The weird connection between festive season and consumers’ demands put the supply chain of businesses in a tough spot. Thus Flipkart might face an issue of mismanagement due to volatility. 4) Low Margins: A festive season is often coupled with a season of heavy discounting. Thus, Flipkart faces a chance of having extremely low margins and might run a risk of facing a loss
Strategies that Flipkart Should Consider
1) Value provided to the customer: Companies decide every business decision by keeping the customer at the forefront. If any business decision does not add to a probable increase or benefit t the end goal. There would not be any direct impact of the resources deployed by the company. Thus, before the festive season, Flipkart must have seen a high possibility of growth in the number of sales, as consumers definitely are on the look out for the best possible deals. Given this parameter it might make sense for Flipkart to further strengthen its network
2) Cost of meeting customer needs: Benefit to the customer also needs to go hand in hand with the cost that the company needs to incur while providing the said benefit. If the cost supersedes the future benefit derived taking this decision would not make sense. But if the future ROI or Return on Investment is positive, the company can choose to make that investment. Flipkart needs to evaluate this risk and apply a suitable strategy.
3) Network Design: As a part of its strategy Flipkart must have evaluated the impact on customer service and cost for different distribution network options. Profitability of the delivery network determined by revenue from the met customer needs and network costs used while designing the particular supply chain network.
Risks Flipkart Face:
1) Threat from a tech-enabled supply chain network: While the tech-enabled supply chain will make conducting business easier for Flipkart, it will also pose a huge risk of data breach and privacy. Competitors might hack the entire system, disrupt the supply chain, and tarnish the company's image in the eyes of customers. A viable and resistant IT department placed to ensure no hacking violations will assure this risk is countered.
2) Excessive inventory: The greater the number of fulfilment centers, the greater the quantity of orders Flipkart will process. If demand estimation is not done effectively, there is a risk of overproduction. Order amounts, reordering points, and so forth. Inventory managements are to be applied at every stage so that this risk does not. overpower the benefits that can be reaped from the increased network
3) Fast delivery might be hampered by poor infrastructure: a fulfilment center with more staff is not enough to achieve faster delivery. The terrible state of India's roads, traffic, and socio-political context may make achieving faster delivery difficult. A strong network design ( last mile delivery in this case) should be constructed to ensure right goods are reached at the right time and at the right cost
