The current business competition compels each industry to be cautious when it comes to planning while bringing into play various business strategies for the sake of differentiation from the competitor’s products and services to ensure competitiveness through lower cost. In the meantime, advanced technology has rapidly given rise to multiple innovations. Still, one thing remains and that is the local way of life and culture in each country which has not changed with time. Businesses have to not only keep abreast of the current situation and innovations but also actively adjust themselves to the local way of life and culture.
Likewise, a transnational company such as Starbucks – a leader in coffee business since 1981 that has expanded its business worldwide – has phenomenally pioneered the Chinese market while relying on the smashing strategy of “Understanding the Local Way”.
Duanwu Festival, one of the three major traditional Chinese festivals, falls on the fifth day of the fifth month of the lunar calendar. It is the time when the Chinese eat zongzi (traditional steamed sticky rice dumpling wrapped in bamboo leaves), even though the preparation has changed with time. Realizing that the rapid pace of life today makes it impossible for the majority of Chinese consumers to make their own zongzi, Starbucks considers it a business opportunity and thus comes up with the production and sale of zongzi that go well with its coffee. Value added to Starbucks’ zongzi comes in the form of a variety of fillings, be they Chinese date, Yunnan ham, kidney bean, coffee or strawberry, while vacuum packed to extend the shelf life as well as provide convenient carrying. Starbucks’ zongzi thus look different from the traditional Chinese zongzi. Mass produced, they make it possible for the company to achieve suitable production cost and competitiveness through prices that vary from 2 to as much as 400 Chinese Yuan.
The above-mentioned business venture of Starbucks proves an exemplary case study because, aside from the profound understanding of its customer groups, the company has been capable of localizing and adding value to its products and services in keeping with the customers’ tradition and culture, which additionally underlines its status as a global brand. This is similar with logistics business which plays a pivotal role in various business operations as logistics cost is the main factor influencing product cost – the reason why business operators try to eliminate unprofitable activities that are the cause of additional costs from the supply chain. Hence, providers of logistics services come to play a pivotal role in understanding customer’s latent needs and pains and analyzing as well as improving services by adding value to their services in the attempt to meet customer requirements, for example, by providing Total Solution logistics services which encompass the pick-up of goods at the starting point, packaging, storage in warehouse and delivery to the destination (from upstream to downstream) so that overall costs can be put under control. The process requires full collaboration to achieve optimized benefits and win-win outcomes for both parties. The major challenge toward the goal lies in how and with what strategy could business operators thoroughly understand and successfully find out their customers’ true needs and demand.
Compiled by BLOG.SCGLogistics