Background of British American Tobacco

The competition is increased day by day due to technology advancement and in the current competition, companies are facing confronts in the context of serving customers in better terms. There are various competition dimensions which need to be considered by the company at the time of attaining the competitive advantages. It is hard for the company to focus on all dimensions simultaneously as they would require a huge investment in order to get a sense of direction and pay attention to getting their competitive advantages in the marketplace. The main aim of this assignment is to draw attention towards Order qualifier and Order Winner. The review of the literature will be demonstrated depth understanding of both concepts in an effective manner.

British American Tobacco was introduced in 1902 and merged with Imperial Tobacco and American Tobacco. BAT (British American Tobacco) has continued its geographical expansion in anticipation of the 1960s and it has been found that BAT has acquired non-tobacco businesses like Argos and Saks, because of amplifying fear that the concern of health over smoking will bound the cigarette industry that is why it renamed itself in the form of BAT industries (BAT, 2018). BAT industries reinforced its premium brands segment by obtaining Rothmans International. It has been found that there are 5,400 billion cigarettes manufactured globally, with China as the large single market. The gross turnover of British America Tobacco plc is £43.8 billion with revenue of £14.9 billion (BAT, 2018).

According to Anderson, Coltman, Devinney and Keating, (2011), each firm has objectives to attain the determined goals for which the forms make policies. The major aim of this policy is to elaborate the aims and goals of the company and each step activity to attain the desired outcome. Order winner and order qualifier are a change of features that are integral for the product for the purpose of gaining market shares on a market. In the context of the definition of order qualifier, it has been found that “qualifier is considered as the criterion that a company ought to need to meet for a customer to even consider if it is a possible supplier.” A definition of order winner can be elaborated that “order winner are those criteria that win the order”. It has been found that order qualifiers are the smallest amount criterions that need to be comprised in the service or product for the purpose of considering in the marketplace. On the other hand, order winner is considered as an additional characteristic that handles the products and services an influence customer to buy the products. It is not possible that the features of order qualifier and order winners are similar as they are dynamic in nature. As competitors of the company do the same for getting the attention of the customers, in such case, the ongoing order winner converts into order qualifier. There can be another reason as well of changing taste and expectation of the customer towards products. According to Quesada, Rachamadugu, Gonzalez and Luis Martinez, (2008), there is some process to recognize the qualifiers and winners in the context of the company.

Literature Review

Figure 1: a step of identifying the qualifiers and order winners

Source: (Jaller and Ullstrom, 2008).

According to Jaller and Ullstrom, (2008), there is a number of companies that face issues in finding future properly and maintain effective strategies. The role of the strategic development is necessary for the companies as it helps in predicting the future is valuable for the company. Strategy development is considered as the integral competitive factor that helps in attaining the goals of the company in the determined time frame. It has been found that the entry of new products and services can change the competitive environment (Ho, Feng, Lee and Yen, 2012). Features that come under the order qualifier can turn in to order winner as per the demand of the customer and vice versa. Moreover, new features that have not been considered before can rise as order winners and qualifiers. The market research is a good option to identify the order qualifier and order winner. it has been found that there are some characteristics that might be qualifiers or order winners.

Figure 2: Characteristics of order winner and order qualifier

Source: (Jaller and Ullstrom, 2008).

It is necessary for the company to keep focus on the upper level of utilization of resources and short delivery times. There are various approaches and methods which can be taken into consideration such as MTS (make to stock) mass construction and manufacturing of manoeuvre with share resources. In order to attain high speed and low cost, it is vital for the company to focus on the scale-oriented technologies in order to be able to generate huge batches at the upper level of speed. It has been found that the management of lead time can be considered as competitive advantages. There are various strategies of lead time reduction that are liable to the issues of logistics in the zones of procurement, distribution and manufacturing. The company has focused on various approaches and strategies in order to remain in the competitive market and to maintain the order winners in the competitive market (Lee, Hu, Yen and Tsai, 2008). The company has decreased its regions from five to found for the purpose of reducing the complexity of its operational structure. This initiative has facilitated BAT in attaining a more effective scale of its regions. By taking consideration of regional management of materials, BAT attains huge benefits in volume consolidation and effective management of inventories. Along with that the company has developed internal service level and handled improved quality products.

Order Winners- Cost and Speed

Moreover, the company has introduced new strategy of postponed from which the company is able to include personalization at the very last moment possible. This strategy helps company to be more flexible and act as a buffer to any amendments in demand (Murali, Pugazhendhi and Muralidharan, 2016). Along with that it also helps company to focus on its production and runs and shorten lead time. BAT considers both internal as well as external postponement, constantly working closely with its strategic suppliers in order to joint develop processes.

It has been found that brand loyalty is little in the competitive marketplace which rises concern towards product availability in capturing market share. The visibility of demand has been improved by the company which helps them to remain in the concept of order qualifier and the continuous efforts of the company can enhance the chance of this factor convert into order winner (Russell and Taylor-Iii, 2008). Development in the representation of demand and supply chain facilitates BAT in providing their products which increase the availability factor. Customer satisfaction keeps huge importance within the business and BAT has taken various initiatives in order to satisfy their customers. Moreover, BAT is proactive in sharing information elated to its products with shareholders and suppliers in order to develop a strong relationship with key business in its supply chain. Within, BAT developed common processes and systems and focus on making a transparency of demand and supply. This kind of activity has facilitated in making decisions in the context of innovations along with more dynamic investment (Wiley, 2018).

It has been found from the market tendency study that there would be lesser cigarettes addicted to smokers and there can be the not large ratio of smokers in comparison to the population size. This turn down in the ration of smokers would be counterbalance by amplifying in the range of adults in the world over the age of 20. It has been anticipated that the development in population of adults over the age can be increased by c.11% in coming next ten years. It has been found that the major word in confining the market is an innovation which is applied not only to operational but also to product and marketing. In the context of the operational innovation, it has been analyzed that taxes will rise constantly which bring the importance for the company to making cost for potential manufacturing (Wang, Wallace, Shen and Choi, 2015). It will be required by the company to keep focus on the strategic products and segmentation in its products. The company can segment its product on the basis of market share, profit margins and product total sales value (Prajogo and McDermott, 2011). The product innovation can be done by the company by taking consideration of the tastes and demand of the customers. With respect to t he marketing innovation, it is necessary for the company to continue investment in product innovation and packaging which is vital to develop customer interests and meet their preferences.

Availability- Order qualifiers

The major focus of the company should be on supply chain integration which is competitive and business performance factor. Supply chain integration comprises valuable factors like distribution, purchasing and customer. supply chain integration would be helpful for the company to attain two kinds of benefits in which first one is the integrated supply chain has tendency to provide outcomes in more responsive manner that facilitate company to provide response in volatile demand pattern (Rahimnia, Moghadasian and Castka, 2009). It spread visibility of information as well as knowledge among organizations. The second one is that companies will have chance of decreasing their remaining price of doing business.

It has been implied to BAT that the company can pay attention towards lean as well as agile supply chain for the aim of developing customer services. Lean would be helpful for the company to reduce all kinds of waste in order to develop production. On the other hand, agile would be helpful in getting market knowledge to enhance opportunities in the explosive marketplace (Caniato, Caridi, Castelli and Golini, 2011). Above image implies that if BAT has lead time in the context of order winner than it is required for the company to keep focus on the agility on the other hand if the order winner is price, in such case, the company should be on lean supply chain.

Conclusion 

It has been concluded from the above discussion that order winners and order qualifiers keep huge importance in the business to attain the competitive advantages. British American Tobacco case study has been considered for this report to emphasize the importance of both concepts. It has been analyzed that the supply chain has an important impact on the customer buying behavior for which the implications have been given under this assignment.

References 

Anderson, E.J., Coltman, T., Devinney, T.M. and Keating, B., 2011. What drives the choice of a third?party logistics provider?. Journal of Supply Chain Management, 47(2), pp.97-115.

BAT, 2018. About us. Available [online] https://www.bat.com/group/sites/uk__9d9kcy.nsf/vwPagesWebLive/DO52AD6H Accessed on 20th December, 2018.

BAT, 2018. BRITISH AMERICAN TOBACCO PLC ADS Common Stock. Available [online] https://www.google.com/search?q=LON:BATS&tbm=fin#scso=_oTsbXMjPEJyUvQTzmILwCw2:0 Accessed on 20th December, 2018.

Caniato, F., Caridi, M., Castelli, C. and Golini, R., 2011. Supply chain management in the luxury industry: a first classification of companies and their strategies. International Journal of Production Economics, 133(2), pp.622-633.

Ho, L.H., Feng, S.Y., Lee, Y.C. and Yen, T.M., 2012. Using modified IPA to evaluate supplier’s performance: Multiple regression analysis and DEMATEL approach. Expert Systems with Applications, 39(8), pp.7102-7109.

Jaller, A. and Ullstrom, P. 2008. Identification of order winner and order qualifier characteristics: case studies on the home appliance market. Available [online] https://www.diva-portal.org/smash/get/diva2:1022819/FULLTEXT01.pdf Accessed on: 19th December 2018.

Lee, Y.C., Hu, H.Y., Yen, T.M. and Tsai, C.H., 2008. Kano’s model and decision making trial and evaluation laboratory applied to order-winners and qualifiers improvement: a study of computer industry. Information Technology Journal, 7(5), pp.702-714.

Murali, S., Pugazhendhi, S. and Muralidharan, C., 2016. Modelling and investigating the relationship of after sales service quality with customer satisfaction, retention and loyalty–a case study of home appliances business. Journal of Retailing and Consumer Services, 30, pp.67-83.

Prajogo, D.I. and McDermott, P., 2011. Examining competitive priorities and competitive advantage in service organisations using Importance-Performance Analysis matrix. Managing Service Quality: An International Journal, 21(5), pp.465-483.

Quesada, G., Rachamadugu, R., Gonzalez, M. and Luis Martinez, J., 2008. Linking order winning and external supply chain integration strategies. Supply Chain Management: An International Journal, 13(4), pp.296-303.

Rahimnia, F., Moghadasian, M. and Castka, P., 2009. Benchmarking leagility in mass services: The case of a fast food restaurant chains in Iran. Benchmarking: An International Journal, 16(6), pp.799-816.

Russell, R.S. and Taylor-Iii, B.W., 2008. Operations management along the supply chain. John Wiley & Sons.

Wang, Y., Wallace, S.W., Shen, B. and Choi, T.M., 2015. Service supply chain management: A review of operational models. European Journal of Operational Research, 247(3), pp.685-698.

Wiley, 2018. Operations Strategy and Competitiveness. Available [online] https://www.wiley.com/college/reid/0471320110/pdf/i_ch02.pdf Accessed on: 19th December 2018.