Subject category:
Production and Operations Management
Originally published in:
2019
Version: 21-Sep-2018
Length: 11 pages
Data source: Generalised experience
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Abstract
In December 2017, Zhang Wei, managing director and owner of Culina, is confronted with a global sourcing by its largest customer, Vitae. Culina is dependent on Vitae that the loss of the business could lead to ruin. Zhang Wei must evaluate the current business state of and organize activities that could help him win the global sourcing as well as implement actions to re-energize the Culina brand and diversify sales. Culina had taken a short- cited approach by vesting all of its resources into a single customer. While supplying large corporations first appears to bring higher margins and higher volume, leverage is transferred externally. When companies first outsource, margins are healthy but in time, companies look to cut costs further and begin to drive prices down through global sourcing. Therefore, 'a putting of all the eggs into one basket' has proven harmful in the long term, especially because Culina hasn’t diversified its customers and markets.
Location:
Industry:
Other setting(s):
2017-2018
Subject category:
Production and Operations Management
Originally published in:
2019
Length: 11 pages
Data source: Generalised experience
About
Abstract
In December 2017, Zhang Wei, managing director and owner of Culina, is confronted with a global sourcing by its largest customer, Vitae. Culina is dependent on Vitae that the loss of the business could lead to ruin. Zhang Wei must evaluate the current business state of and organize activities that could help him win the global sourcing as well as implement actions to re-energize the Culina brand and diversify sales. Culina had taken a short- cited approach by vesting all of its resources into a single customer. While supplying large corporations first appears to bring higher margins and higher volume, leverage is transferred externally. When companies first outsource, margins are healthy but in time, companies look to cut costs further and begin to drive prices down through global sourcing. Therefore, 'a putting of all the eggs into one basket' has proven harmful in the long term, especially because Culina hasn’t diversified its customers and markets.
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Location:
Industry:
Other setting(s):
2017-2018
Related
Subject category:
Production and Operations Management
Originally published in:
2019
Length: 11 pages
Data source: Generalised experience