Strategic Management
Oxford can change its product line without alienating existing customers by focusing product line turnover on its poorest-performing products. The company has a staple core of products that sell well and that have the highest loyalty, and those products should remain in the line. But there are, within any product line, going to be products that have either reached the end of their life cycle, did not perform well for whatever reason, or that do not have a high degree of brand loyalty. In general, such products can be moved, and new products added, without bringing about any diminishment in brand loyalty.
New customers are attracted by new products, especially when the new products target different markets or segments, or if the new products bring different sets of attributes. This is important when thinking about new product development -- the new products cannot simply rehash what the old products bring to the table. Instead, they must be improvements over the products that are being cut from the lineup. There are many ways, from using new materials to offering new designs and new product features.
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The supplier will need to be able to meet a number of different standards, for things like delivery terms, product quality, and cost. The supplier should be able to work with Oxford to help Oxford meet its specs going forward, thereby assisting in the innovation process that will...
Thus, communication is going to be a critical factor in the relationship.
Oxford needs a supplier that can reliably deliver, as close to a just in time (JIT) model as possible. Most suppliers who are unaccustomed with JIT struggle at first, but Oxford will want to push suppliers towards JIT capability. To this end, they can have the supplier have a strong supply chain of its own, that means the supplier will be able to furnish Oxford reliably. Then, the supplier chosen will need to be able to integrate its communications with Oxford. JIT relies on Oxford being able to communicate instantly with the supplier when something is needed, knowing that the supplier can get the delivery there on time, on short notice. Usually there is some form of GPS tracking that is used to ensure that the goods are delivered on time, and that both companies would have access to this information. In many modern supply chains, mutual transparency is a critical success attribute.
Cost is less important, but still must be a factor. Oxford is bound by the degree to which it can pass costs along to its customers, so there must be some element of cost control built into the supply chain. Indeed, JIT is a form of cost control because it lowers inventory holding costs -- if money was no object, JIT would not be necessary for Oxford. That said, quality is important because Oxford is bringing…
