Crowning Glory Ltd case study supply chain strategy

Crowning Glory Ltd case study supply chain strategy

ASSESSMENT 2: SHORT CASE STUDY — SCENARIO ANALYSIS

Description

You are required to analyse the Crowning Glory Ltd case study in this documentand make a recommendation to the company board of directors of Crowning Glory about the best supply chain strategy to follow and why.

Purpose and requirements

You will be assessed on your understanding of the supply chain strategic concepts that underlie the questions and the application of these supply chain strategic concepts to business situations.

When making a recommendation, you need to provide a rationale for your answer in terms of the scenario. Since the scenario is brief, you may need to make a number of assumptions.

You will not be marked right or wrong on any assumptions you make, but you will be marked in terms of whether your assumptions and interpretation of the scenario make sense and are coherent and consistent with the scenario and the concepts presented in the unit.

This is a fictitious scenario, so there is no point in searching the web for Crowning Glory or Deerfield, although there no doubt are companies out there with these names. What you should do is draw on the material in the unit guide, readings and the textbook to help you formulate an understanding of the issues and how to address them.

What we are looking for is to see if you both comprehend the strategic issues presented by the scenario, and are able to make relevant and plausible recommendations which draw on the concepts presented thus far in the unit.

Remember: A simple list of recommendations without an accompanying analysis of the issues and circumstances presented in the scenario will not do; you must justify your recommendations by considering the situation in the scenario and the implications of alternative approaches.

Case study — Crowning Glory Ltd

Crowning Glory Ltd is a private company that has grown from small beginnings over the past 20 years to become a major supplier of hair-care products to the hairdressing trade. Its products are well liked by professional hairdressers and the company enjoys a dominant share of the market.

Crowning Glory has not, until recently, contemplated the supply of products to the retail market, but enquiries from a major national multiple store has led to the supply of samples and the testing of a Crowning Glory shampoo amongst the stores’ customers.

The outcome of the trial shows that users prefer Crowning Glory shampoo to the competing products and discussions have now moved to the possibility of Crowning Glory becoming a regular supplier. It is envisaged that products will be shipped in large quantities to the retailer’s regional distribution centres, branded as the retailer’s own product.

The management team at Crowning Glory is attracted to the idea; it would enable them to expand their production and sales without the need to spend any money on marketing and, without the need to worry about setting up a distribution system. If the project is successful, it might lead to the launch of the Crowning Glory brand through the retail trade and possibly also to contracts with other major retailers for own brand products.

Crowning Glory has been having discussions with Deerfield packaging, its present supplier of shampoo bottles. These are of one litre capacity, to a standard design and are supplied in plain white. Crowning Glory itself applies the label for its small range of trade products.

Deerfield too is excited by the possible new business that Crowning Glory’s diversification will bring. It will be very happy to invest in the necessary tooling to produce blow moulded bottles in large quantities to a design specified by Crowning Glory and its retail customer but there will be some problems.

Deerfield’s plant is 200 kilometres from Crowning Glory’s and shipping large quantities of shampoo bottles effectively involves shipping large volumes of fresh air. The cost of packaging is a large proportion of the cost of producing small bottles of shampoo. There is another local supplier who could supply at a lower and feasible cost but Crowning Glory has never dealt with it and, in any case, has a sense of loyalty to Deerfield.

After a brainstorming session, the management of Crowning Glory has come up with the following options. They have not, as yet, paid any attention to the feasibility or appropriateness of any of them:

  1. Re-source the bottles, saying thank you, but goodbye toDeerfield.
  2. Invest in moulding machinery, hire the appropriate expertise and integrate bottle production with their filling line, i.e. become a bottlemaker.
  3. Invite Deerfield to set up a small plant nearby.
  1. Suggest that Deerfield set up a filling line and Crowning Glory will ship shampoo in bulk to their site for filling and distribution.
  2. Propose a joint venture with Deerfield, sharing resources, investment, profits, worry, and everything else.
  3. Request the assistance of the retailer in managing part of their supply chain.

The list is not a complete set of possibilities and some of the ideas on the list are not necessarily mutually exclusive. Indeed, you may have your own ideas about what they should do.

The company board of directors has asked for your help to make some suggestions about the best supply chain strategy to follow. What would you recommend, and why?

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