Question: analysis and comments for the below Compared with some grocery industries, the online channel has been more successful in the computer hardware industry. The main
analysis and comments for the below Compared with some grocery industries, the online channel has been more successful in the computer hardware industry. The main reason is because of the key difference in product characteristics and also the demand of the supply chain.Some computer hardware products such as laptops, printers and computer components are having really high value to weight ratio and they are non perishable, which makes them the perfect product for online selling. So in other words, shipping these products is efficient because their value justifies the cost of the delivery, and they don't need special treatment or temperature control at all. Compared with that, the groceries are considered low value-to-weight products, they are easy to perishable, and they need careful temperature management and also fast delivery. All of these increase the price and complexity of the online grocery logistics. From a supply chain perspective, in our textbook, Chopra and Meindl said that the product characteristics, including value, demand uncertainty, and perishability will all affect the efficiency of the distribution channels. (p.8082). Computer hardware has a long product life cycle and also stable demand, it means that inventory can be centrally stored and shipped when they are needed. Compared with that, the groceries are having a short shelf life and their demand is usually highly uncertain, which makes the centralized online distribution risky. Moreover, the frequent, and small amount delivers characteristics also increase the transportation costs and reduces profitability. In future, the online channel will still likely be valuable and profitable for the computer hardware industry. As the development of technology, the customer will pursue convenience and variety in computer hardware purchased and they will be more likely to favor online platforms. Based on what Chopra and Meindl said in the textbook, the efficient online channels can gain profit from the high inventory turnover and low holding costs, especially for some high value and standardized products. (p.9496). Some big online platform companies like Amazon already prove that this model can be successful, and the improvement in logistics like faster delivery and automated warehouses can also increase profitability. So my conclusion is that the computer hardware industry can keep development now and in future due to its products being valuable, durable and easy to ship. Compared with that the grocery industry are having high logistics costs and complexity, all of those limit the profitability of online grocery sales.
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