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Virtual Warehouse Case Solution & Answer

Virtual Warehouse Case Solution 

Introduction

Jubail industrial cities and Yanbu in Saudi Arabia are primarily managed by RCJY – Royal Commission for Jubail and Yanbu. These cities form one of the largest industrial complexes across the world. The growth and development of the manufacturing and logistics industries are known to be catalyzed by an attractive ecosystem,mainly consisted of industrial cities, high-quality supply chains, well-developed infrastructure and a continuously improving logistics network. (Officials, 2020)The Jubail industrial city is known for its development as a logistic area,particularly for storage and packaging organizations. (Officials, Chinese contractors win Saudi Deals worth $77 million, 2013)

In Jubail industrial city, more than 30 major organizations are offering their services in storage and packaging. According to a survey, the average number of spare line items for each organization was estimated to be around 50,000, which had a value of not less than 500 million Saudi riyals. Similarly, around 20 percent to 40 percent of such line items were non-movable spares,which were often referred to as slow movable spares. Considering the presence of 30 companies in the logistics;there were around 1.5 million line items of worth 15 Billion Saudi Riyals at the Jubail industrial city.

Additionally, around 20 percent of the 15 Billion can be significantly reduced with improved strategic planning among all the organizations. In the case of 5 percent local production of movable spare parts;the share of local content was estimated to be around 750 million Saudi Riyals. But, there had been a production loss of around 6.5 million Saudi Riyals due to the lack of critical spare. The opportunity to consider a one-click approach for the spare parts would lead to cost reduction in almost all organizations, allowing the non-movable spare parts to be the fast mover spare.

Project Overview

The organization is a small technology organization that is about to initiate its business operations in the logistics area. The project is primarily based on the analysis of the logistics area in the Jubail Industrial City,because the line items offered by all thirty organizations are of great value. Similarly, it is based on analyzing the external environment of the industry regarding competition, customers, and other related market trends which would assist in developing a strategic marketing plan to digitalis the spare parts. As the organization is the only player in the market to offer digital service.

Scope:

The project scope mainly includes the following:

  • The presence of unique systematic service in the Jubail industrial City –Virtual warehouse would digitalis the spare parts to make it more accessible for all the business to business plants.
  • This would significantly lead towards the development of a strategic approach to be used by this organization,and would support the growth in the market.
  • The new introduction of the virtual warehouse service in the market allows the organization to be the only firm to offer the digitization of spare parts.

Virtual Warehouse Industry

Considering the size of the industry, the virtual warehouse industry is one of the emerging markets, because of the new service offering in the Jubail Industrial city. Many of the organizations seek possible ways to enter the market,but, there is a requirement of a high confidentiality level to protect the competitive position in the market.

Competitive Review

The competitive review of the virtual warehouse industry tends to be based on multiple factors, such as: the presence of competitors, market share, target market, marketing objectives, positioning, budget, and current marketing tactics. Thus:

  • Competitors–being the first player in the market to use a digital approach, there are neither direct nor indirect competitors in the market. With the growth in the market, there might be a threat to the competition, followed by the entrance of new players or the transformation of existing players.
  • Market share – In the Jubail industrial city, a Virtual warehouse would be the only organization to gain the market share. This is because of the absence of any other player in the market.
  • Target Market – Since the main focus of the organization is the Jubail Industrial City, the target market would mainly include the organizations operating in the Jubail industrial city.
  • Marketing Objectives –It is to make sure that the Virtual Warehouse would serve as the best platform with the ability to sustain the plants, which would bring a significant reduction in operational cost.
  • Positioning –The positioning of a virtual warehouse as an important service is in terms of sustainability and attractive cost.
  • Budget –The budget for the digitization of the warehouse includes around 5 million Saudi Riyals.
  • Current Marketing Tactics – The current advertising approach of the organization tend to be through royal commission to (save and sustain locally) campaign.

SWOT Analysis

Strength:

  • The approach of one-click movement of spare line items offers the customers with affordable subscription packages.
  • A virtual warehouse would be the first player to offer such a unique service in the logistics market.
  • A way to save production costs and decrease waste generation would lead towards an increased sustainability.
  • The inclusion of capital goods and resources to be reused through the adoption of advanced technological approaches would lead to wards a significant reduction in cost.
  • The one-click approach provides an easy access to the products,eliminating the slow movement of the spare parts.

Weakness:

  • It is mainly associated with the provision of non-unified specifications of the movement of spare parts.
  • Due to a change in the strategic approach, there is a requirement of a non-disclosure agreement NDAfor the protection of information confidentiality.

Opportunities:

  • The business operations can be significantly expanded to other regions of Saudi Arabia because of the significant growth of GCC and KSA.
  • The stock analysis and other related studies regarding the presence of line items would allow an extending service to other products.
  • Analysis of the market trends would provide the organization with an update on the digital technological approach, to help it in remaining competitive in the industry.

Threats:

  • The use of a digital approach can be easily imitated by other organizations, posing a threat of competition.
  • The inability of the organization to sign a non-disclosure agreement, represents an increased probability of confidentiality breach.
  • With the use of an advanced technological approach, there is an increased risk of cyber security regarding the protection of data……………….
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