Global distribution system

Global distribution system

By: Idris

A Global Distribution System (GDS) is a

network operated by a company that enables automated transactions between Vendors

and booking agents in order to provision travel related services to the end consumers.

Global Distribution System

Competitive advantage Competitive strategies

Distribution as a competitive advantage

Something that places a company or a person above the com-petition

Competitive Advantage means

What is the Competitive Ad-

vantage?

Differentiate a product or service

Improve business processes (lower costs)

Change a business structure

Create new business

Competitive advantage

iphone 5s gold

Iphone 6

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Competitive Advantage

Cost advantage

DifferentiationAdvantage

Simila

r pro

duct

At lower

cost

Higher price

For unique product

A Model of Competitive ad-

vantage

Resources

DistinctiveCompetencies

Capabilities

Cost advantageOr

Differentiation ad-vantage

ValueCre-ation

How a firm can actually create and sustain a competitive advantage in its industry?

Competitive Advantage By

Porter

“Competitive strategy is about being different. It means deliber-ately choosing to perform activi-ties differently or to perform dif-ferent activities than rivals to de-liver a unique mix of value.”

-- Michael Porter

Competitive advantage strategies

1.Cost Leadership (Low Cost Strategy) cost Leadership mean that produce goods level of

equal more in expensive

2. Differentiation (Differentiation Strategy) Differentiation is that provide inventive value can im-

prove of perceive valued of consumers toward prod-uct(or service) in the market.

3. Focus Cost Leadership / Differentiation: When competition's range is narrow, in other words

when target on specific customer segment will be fo-cused cheap price and differentiation strategy.

Competitive Weapon -Sustainability

• Very few companies sustain their competitive edge over the long term

• Sustainability occurs when it is difficult or impossible for the competition to respond

1. How long a competitor responds?

2. Which competitors can/will respond?

3. Will the response be effective?

3 Pillars Supporting Sustainable Advantage

• Lead Time• Information leaks• Followers take short cuts• Followers implement better solutions

• Competitor Analysis (Difficulty of competitor to respond or copy

application)

• Supply system analysis• Market capture• Switching costs

GLOBAL LOGISTICS – the transportation & storage activities necessary to transfer the

physical product from the manufacturing plants & warehouses in different countries to various

local market countries

Nowadays, global distribution has been consolidated such that fully integrated

transportation from point to point across the world is possible at low cost.

Global Logistics

Elements of International Logistics

• The environment in which international logisticians operate is quite different from the domestic environment.

• The decisions regarding international transportation are much more complicated than domestic transportation.

• The number of intermediaries involved is greater.

• The inherent risks and hazards of international transportation are much more significant.

• International insurance is much more complex.

• International means of payment are more complicated.

• Terms of trade are more complicated.

• The crossing of borders represents specific challenges.

Global Logistics

Air Express Technical innovations in computerized

inventory systems and numerically controlled machines for good handling made possible the growth of air express systems

Ocean Carriers For shipments of bulky and low-value-per-

unit products Ocean vessels are still the most economical

carrier alternative overseas There have been a number of global carrier

alliances in the shipping industry due to the savings involved in sharing resources and the advantage in providing integrated one-stop services to the shipper

Global Logistics

Overland Transportation The increasing volume of international trade has put

the inland distribution system under pressure One North American solution has been the roll-on-roll-

off system in which a loaded container is simply rolled onto a railcar and shipped by rail for part of the way, avoiding congested freeways

Warehousing The competitive need on the part of global

companies to be “close to the customer” and provide fast and efficient service This places increased demand on warehousing and

inventory management NABARD Warehousing Scheme (NWS) 2013- 14

GRAY TRADE - parallel distribution on genuine goods by intermediaries other than authorized

channel members

Three main factors motivate entrepreneurs to engage in gray trade:

1. Wide price discrepancies between national markets

2. Limited availability of certain models or versions in one market

3. Inexpensive logistics means that transportation can be accomplished with relative ease

Parallel Distribution & Gray Trade

EROSION OF BRAND EQUITYcan happen if the gray goods do not perform to the

level expected

STRAINED RELATIONSHIPS WITH AUTHORIZED CHANNEL MEMBERS

arises when channel members face intra-brand competition

LEGAL LIABILITIES usually involves warranties that can’t be honored

COMPLICATION OF GLOBAL MARKETING STRATEGIES

forecasted sales in a market may not be realized when

there is a sudden influx of gray goods

Effects of Gray Trade

What type of channel/middlemen should be used to ensure that the strategic marketing objectives

are met in that country?

What are the important functions in the channel network for that country?

Global Channel Design

Two major considerations:

REVISIT YOUR FSA’S Key success factors and FSA’s vary across countries and

across channels

WHAT CHANNELS ARE AVAILABLE?Once you identify the critical features of your channel

network, find out if the country market possesses these channels

CHANNEL TIE-UPChannel members might be difficult to enlist due to entry

barriers, competition, and special trade allowances

COORDINATION & CONTROLOnce a distribution network is established, coordination & control from a centralized headquarters should be feasible

Designing Global Channels