Listo Systems Argumentative Essay
Listo Systems is a graphic service agency with a long history of success. In the early 1990s, the company quickly grew into one of the top graphic service companies in the world.
The rapid growth of technology in recent years has both helped and hindered the company. Advancements in technology have allowed Listo Systems to provide quality services and products faster and more efficiently. However, new technology has also been beneficial for Listo Systems’ competitors. The competition has grown significantly in number and in the quality of services and products that they provide.
The increase in technology has also led to an increase in customer demands and expectations. Customers want services and products faster and cheaper and will go to a competitor without hesitation if their needs are not met. The advancements in technology have also created new threats to the industry in terms of security and theft of products.
Answer the following questions by applying the concepts learned in Chapter 1. Also, conduct literature reviews on the subject of discussion and use to support your case study answers: 1. How has Listo Systems felt the impact of power shifting from the Seller to the Buyer? Ignorance of customer behavior is the greatest strategic risk facing businesses today. Every day they vote with their time, with their word of mouth, with their money and with their allegiance, for the business designs that best serve their evolving priorities. The results of their shifting decisions are value creation and value destruction. Customers determine profits.
In many markets, not all customers are profitable. An examination of true pricing and the true costs of serving customers may reveal that a company is actually losing money on many customer accounts. The shift from “all customers are profitable” to “many are not” has been triggered by declining gross margins and increasing variability in the cost to serve customers. Suppliers will be rewarded for being much more rigorous in: 1.Measuring current and potential profit customer by customer 2.Selecting the promising customers, and
3.Choosing how much to invest in those customers.
Customer profitability is a relative concept. When a firm’s capacity utilization is low, even a “bad” customer is valued because the incremental volume helps to cover fixed costs — in the short term. For the long term, however, the fundamental issue remains: either replace the “bad” customers with good ones, or reduce capacity, or do both. The key to reversing this downward spiral into unprofitability is the ability to continuously re-segment the customer base.
A customer profitability system can reverse the process and enable a company to exploit profit shifts to its advantage. By developing an accurate and dynamic model of how profitability varies at the individual customer level, a company can select and develop strategic customers who yield the greatest long-term value. The distribution of power between sellers and buyers influences every negotiation or transaction and profoundly influences the allocation of profits and value. Significant power imbalances can translate quickly along the value chain. Several factors can trigger the power shift pattern:
1. Customer consolidation
2. The formation of professional purchasing groups that bring tremendous expertise to the purchasing process
3. An overabundance of information on suppliers’ costs and performance
4. Suppliers’ lack of differentiation in either the products offered or the business models used to serve customers.
When a company’s customers have gained the upper hand, there are a few options available: 1. Out-concentrate the customers. If key customers are more consolidated than you, then consolidate back, merging to ensure that customers can’t do without your portfolio. 2. Change the offer, change the customer.
3. Leapfrog the customer. Companies can vault past their customers via a strong end-user brand, direct channel initiatives and innovative strategies to minimize their current customers’ response. 4. Become the customer. The most radical move of all is to buy your largest customer. To generate value, make this move just before power starts shifting to customers, not after it has progressed. Purchasing of a distribution channel lets you join rather than fight the rise in customer power.
2. What external environmental factors are affecting Listo Systems? External environment consists of forces that directly or indirectly influence organization’s business activities. The actors and forces outside marketing that affect management’s ability to build and maintain successful relationship with target customers. Changes are often quick and unpredictable and offers both opportunities and threats Company must use its research and marketing intelligence systems to monitor the changing environment.
Systematic environmental scanning helps Listo System to revise and adapt business strategies to meet new challenges and opportunities in the marketplace. Technology can reduce costs, improve quality and lead to innovation. These developments can benefit consumers as well as the organizations providing the products. Every company faces a wide range of competitors and Listo System is also not apart from this fact. Listo System must secure a strategic advantage over competitors by positioning their offerings to be successful in the marketplace. A PESTLE analysis for Listo must consider all the important external factors impacting on the company. These factors may have political, economic, sociological, technological, legal or environmental dimensions. The political analysis must include the impact of local and national government, and the international situation.
The Economic analysis needs to investigate the influences of the stock market and tax increases, amongst many other monetary matters. Sociological analysis is all about analyzing the background culture. Technological factors are usually easier to spot, because new technologies involve change, and change is always noticed. For instance, online shopping has had a major impact on Listo’s recent success.
The change created by technological advances often lead to legal problems, which is why legal analysis is always an important part of a PESTLE analysis. Listo’s operations obviously have a significant environmental impact, from fossil fuel use to packaging issues. Reducing the demand on the planet is a challenge for any big company. A PESTLE Analysis for Listo must look at all the six factors we have mentioned. Here they are again, with examples of each: Political: an increase in unemployment due to a downward turn in the world economy. Economic: impact on sales of the credit crunch.
Sociological: an increase in immigration from Eastern Europe resulting in a demand for new goods. Technological: how can Listo take full advantage of the World Wide Web? Legal: how can Listo avoid legal opposition to expanding into new high streets? Environmental: – climate change is affecting supply and transport, how can Listo adapt? In summary, any PESTLE Analysis for Listo must consider all external factors if it has any hope of capturing the essence of the company.