Supply Chain Owning Advantages

Supply Chain Owning Advantages

  • Submitted By: Audel
  • Date Submitted: 12/16/2008 2:31 PM
  • Category: Business
  • Words: 1065
  • Page: 5
  • Views: 698

Supply chains are becoming more and more important issue for today’s corporations. Manuj and Mentzer (2008) clearly state that they “... are a source of competitive advantage.” In that case, this is an essential aspect which companies should take into consideration if they want to survive in nowadays competitive markets. The aim of this essay is to enumerate and evaluate the consequences following from owning by corporation its supply chain and analyse their impact on maximising by company its competitive advantage. This paper is divided into five parts where firs two deal with firm theories such as Coase theorem and Penrose theory of the firm growth. Then in fallowing two section this essay evaluate advantages which companies can expect to gain when controlling its own supply chan. In last paragraph there are some counterarguments for unification of whole supply chain under one company. According to the topic of this essay there is strong body of evidence which suggest that when company controls its supply chain it is more likely to get ahead of its competitors (Stevenson and Spring 2007; Seuring 2006). Although many advantages of such issue can be enumerated in this paper only few such as decreasing of transaction costs, access to resources, flexibility of company and risk reduction will be taken into consideration. Transaction costs Firstly such companies are usually bigger then enterprises which operate only on domestic market and therefore make many more transaction every day. What is more, when enterprise is getting bigger and bigger and becoming globally, bureaucracy within firm are getting complex and expensive (Cateora and Graham 2005). Secondly, not only that more transaction are conducted but also each of them tend to be costly for global organisation. Indeed, such company have to deal with different legislation systems throughout the world, cultural differences (particularly different approach to time) and sometimes tariffs as well as barriers...

Similar Essays