Background on British American Tobacco

In the current climatic condition of the global business environment, competition has become the order of the day as every business is trying to adopt strategies that can positively influence the performance of its goods and services in the market (Henzew 2011, p. 39). With technological advancements in business and stiff competition, Yoshikawa (2017) denotes that business organizations are continuously facing the challenges how they can offer better services to the customers while achieving lower costs of service. The resulting impact is thus aimed at achieving quality improvement, increased speed of delivery, timely delivery and reliability, and effective product design while focused adopting technological innovations to remain relevant and sustainable in the 21^st century business environment as pointed out by Quesada et al. (2012, p. 297). On the other hand, Barney (2011) and Markelevich (2014) point out that effective competition in all directions of the business is simultaneously becoming a challenge as it requires more investments from the business organizations. It hence requires the leadership and management of the business organizations to have a sense of direction and adopt competitive strategies that focus on productivity and quality improvement (Kern 2017, p. 143).

This manuscript presents an evaluation on the order winner and order qualifier strategies at its importance for business organizations. In their study, Singh et al. (2015) make emphasis on the connection between the market and the business since it is very crucial to align between integration and order winning strategies as crucial factors to ensure the organization remains competitive. While applying this strategy, this paper focuses on British American Tobacco Ltd (BAT) as a case study and identifies its key order winner and qualifier candidates. With a brief overview of the company, the paper analyzes the nature of operations of the company and recommends ways the company can adopt with the aim of improving its order winner and qualifier strategies. The paper hence concludes with a brief insight into the potential implications of more effective level of order winner and qualifier within supply chain of the company.

British American Tobacco began its operations in 1902 as a merger between the American Tobacco and Imperial Tobacco according to Prince (2015, p. 23). Due to proper management, the company continued its market coverage and geographical expansion until 1960s when it acquired other non-tobacco firms such as Argos and Saks due to the increase in the health concerns. Fear on health concerns due to smoking threatened to restrict the cigarette industry, resulting to same changes within the structure of the organization that lead to the birth of the name British American Tobacco (BAT) industry (Quesada et al. 2014, p. 67). However, the company sold other retails operations only leaving financial services and tobacco in 1989.

Order Winner and Qualifier Strategies

In the attempt of finding effective solution to the market competition scenario, Platzek, Winzker, & Pretorius, (2011) denotes that business organizations are adopted the order winner and qualifier model in their strategic operations. According to Quesada et al. (2012), order winner and qualifier aspect are qualifier models that should be included in the operation of a company with the aim of increasing the customer acceptance on its products and services in the market. The same study denotes that order winners strategy aims at introducing additional features on a product or a service the company offers to make it unique and set it apart to win the final purchasing decisions of a customer. Being dynamic in nature, the order winner and qualifier aspects often change with time depending on the nature of the organization, the product and services it offers, and the nature of the business environment according to Choudhari, Adil, and Ananthakumar (2013, p. 460). The taste of customers also changes often depending on the target market leading to a change in the expectation of the customers.

Speed: Jones, Naylor, and Towill (2010) denote that every business should aim at achieving the maximum and efficient resources utilization within the shortest possible time to achieve productivity. Therefore, achieving these objectives requires an organization to employ different strategies such as make to stock (MTS) manufacturing procedures, multiple line operations, as well as mass production with shared resources. In their review, Quesada et al. (2012) and Yano (2010) also denotes that organizations adopts strategies that focus on managing the lead time as it is viewed as a step towards the achievement of the market competitive advantage. In other words, with the increase in the lead time, the organization is able to reach the market faster hence gaining the first market advantage on the received services, technological innovations, and products.

Corporate Social Responsibility: Corporate Social Responsibility is a business aspect that units an organization with the community with the aim of ensuring environmental stability for the betterment of the future generation as pointed out by Walker and Dyck (2014, p. 147). BAT adopts the system as a way of involving the local communities who are also some of its major customers. The supply chain system of the organization incorporates the CSR dimensions to ensure equal cost of operations compared to the focus of its competitors. The realization of the CSR by the customers hence leads to a potential order winner.

Key Order Winner and Qualifier Candidates for BAT

Cost: Achieving timely production at low cost hence requires the adoption of strategic economies of scale that are technologically oriented to ensure the production of high batches at a limited time (Vaart, & Donk 2011, p. 36). As a result, adopting strategies towards the reduction of the lead time is not the only secret for the organization. It also offers products at affordable costs to respond to the various facets of the customers in the market. Timely production and affordable cost of the products and services also help in solving the logistical challenges in manufacturing, distribution, and procurement areas of the business.

Regional Level Management: In the attempt of increasing its competitive advantage, British America TOBACCO Inc, eliminated the local management of the distribution and procurement strategies and the functions were transferred into the regional level. Jones, Naylor, and Towill (2010) point out that the company recently eliminated one of its regions with an aim of minimizing the management structure complexities for easier operation, a move that is identified to have increased the ability of the organization to achieve more balance in scaling its coverage. With the regionally managing of transportation, products, and services, BAT is comfortably gaining advantage in better inventory management and volume consolidation. Adopting this kind of market model of procurement has enabled the company to benefit from supplier-led strategies and innovations, improved level of internal services, and quality product improvement.

Postponement in production: In a case study on the organization, Choudhari, Adil, and Ananthakumar (2013) point out that BAT as well adopts postponement in its business production processes. Postponement of late configuration is not a new concept in business as competitive businesses often involve possible last minutes personalization. Practicing postponement has enabled the company to be more flexible and able to act as a buffer at any point there is a change in the demand in the market. The strategy has also enabled BAT to ensure production optimization that effectively runs and shortens the lead time for its services. The organization thus focuses on both the external and internal postponement as it continuously works with its key business stakeholders such as the suppliers to achieve a joint improvement of the process.

Availability: In their study, Jones, Naylor, and Towill (2010) points out that there is often little brand loyalty as a result of the harsh global business industry that is characterized by still competition in all facets of business operations; an aspect makes product availability a very crucial strategy in capturing a large market share. The organization has adopted strategies that has enabled it improve its visibility of demand along its supply chain to ensure all its products are available in the right quantity, at the right time, and it the right place.

Methods for Improving Order Winner and Qualifier Strategies

Design and Innovation: According to Echambadi and Sangwon (2016), quality and value of the product and services offered by an organization are essential. However, they completely depend on a unique perception of every client (Billing and Cordingley 2011, p. 299). BAT is its process of service delivery had adopted value diversity while maintaining the high quality its products have been known for in the market. Instead of the normal cigarettes, BAT has also introduced the use of capsules that has proven to have a wide level of market acceptance as a way of product innovation.

The design of the supply chain: The organization has adopted a service delivery system on its products with different variations that eliminates the contribution of customers. However, the customers are only left with the point of making decision on the finished product while accepting the price offered by the company. As the products move from the make to sock spectrum level to the make-to-order, the involvement of the customer with the product is increased. It also adopts the strategy of end time real demand with its strategic suppliers to ensure a continuous building of closeness and trust in its relationships with the major supply chain management entities as pointed out by Quesada et al. (2012, p. 297).

Global trade transparency: BAT has also internally established a common system and process that have increased its level of global transparency of supply and demand. It is a strategy that has improved the level and time of decision-making towards innovation, sourcing plans, and efficiently productive investments.

Delivery: according to Yawar and Seuring (2017), there is a specific dimension and preferred sequence often desired by customers in the market, an aspect that affects every industry. The organization ensures it delivers quality and value that Lee (2011) points out that are the most essential aspects of customer preference.

According to Freedman (2017), a global market study denotes that there will be a reduction in the number of cigarettes consumed my users as well as a smaller percentage of users in comparison with the global population size. James (2016) also denotes that the World Health Organization report projects that the number of cigarette users will increase as compared to the current population. With these changes expected to occur, there is need of adopting both operational, market, and product line innovation (Wu, & Luo, 2016, p. 56). With these projections, there will be a rise in the tax imposed on the organization hence will affect the stability in the cost of production for the organization. BAT will have to segment its products and divert more attention strategizing on products based on the market share and profit margins.

Implications of Effective Order Winner and Qualifier Strategies in the Supply Chain

The production innovation strategies adopted by the organization will require focusing on meeting the taste and references of the customers. Morash (2011) denotes that it is very crucial for an organization to have a clear understanding of the different profiles and facets of the customer segments in the market. It is hence necessary for the organization to evaluate and research and gather relevant information that can give the organization an insight to the expectations and needs of the customers. Information such as the buying behavior of the customers will help the organization to invest in product development strategies that will effectively meet the purchasing patterns and the preferences in the market. Christopher (2010) denotes that the menthol capsules is a product innovation strategy that has been received with positivity, an indication that further innovations can still be effective.

According to Sethi and Zhang (2013), the integration of the supply chain is the key to effective competitive advantage and improvement in the business performance in the tough global economic scenario of the 21^st century. However, Vaart and Donk, (2011) denotes that the integration process involves various factors and elements such as purchasing, manufacturing, distribution, as well as the customers of the business. As a result, the supply chain management order winner and order qualifier strategies enable the organization to achieve various competitive advantages. Zhang (2013) denotes that adopting an integrated supply chain process enables an organization to become more responsive with the ability of responding to very volatile demand patterns. The improvement in the ability of response is as a result of the increased visibility of information as well as knowledge sharing on different facets of the business among stakeholders and other firms (Towill 2016, p. 37). The integration of stakeholders as well as other firms gives a company the possibility of reducing the net costs of business operations and the eventual total cost of services and products to the end customers.

For effective business performance and improvement, agile and lean supply chain management strategies are necessary (Cowton, & San-Jose 2017, p. 673). Agile is being flexible in adopting the market knowledge in exploiting the volatile market opportunities while lean is a supply chain strategy aimed at eliminating wastage and enabling level production (Olfat, & Fard 2012, p. 104). According to figure 1, the lead time is the order winner in case the supply chain focuses on agility while the price should be order winner in case focus is given to the lean.

Figure 1: Market Analysis on the lead and agile supply chain

For BAT, there is a challenge in effectively adopting both agile and lean supply chain strategies in equal effectiveness for new products and slow movers and stable products respectively. To effectively adopt the agile supply chain strategy, the organization requires a comprehensive evaluation and understanding of its current processes which is a prerequisite of the lean strategy (Sangwon 2016, p. 67). BAT will hence require building on the lean knowledge base of the business for further exploration and enabled performance. As supported by Moron (2011), it hence means that BAT will have to align its operations with high-quality suppliers who can effectively support agile and lean supply chain strategy.

There is also a need of integrating the business ideas and the supply chain with the customers of the organization, also known as the down-stream supply chain according to Hertz (2011, p. 363). With technological advancements and models in business, effective business strategies should integrate a downstream integration of the supply chain to enable a closer relationship between the supplier and the customers (Kumar, & Dubey 2016, p. 189). The organization will hence respond to the needs of the customers in timely and customized way. In their study, Merzifonluoglu and Feng (2014) also denote that innovation also increases the challenge of balancing between meeting the needs of different facets o the market segment while also managing the market portfolio. In other words, the organization will experience a wide range of product which in turn will lead to the increase in complexity and a need for manufacturing flexibility as well as more setup and change-over in the business as supported by Henn (2017, p. 140). BAT will thus need to improve the process of new product developments right from the initial generation of the product concept to the point of product launching in decision-making.

Conclusion

Order winner and order qualifier criteria are defined as by business management studies as the as operation strategy plan aimed at gaining the market competitive advantage. The terminologies were first introduced by Terry Hill, a professor in London School of business and have been used ever since their introduction as tool of measurement to assure business managers concerning their product acceptability by the customers. The same study denotes that the success of an organization mainly depends on the order winner factor and hence should be at the top priority in case the management is planning on the competitive strategy to be adopted by the business. It is an aspect that is considered to be more beneficial to the organization as a long-term objective as long as the targeted higher performance is achieved. On the other hand, order qualifier also plays an essential role as bait for drawing the attention of customers to the services and products even though it is not as important as the order winner factor. Therefore, business organization needs to be above a particular level of performance in their operation so as to draw the attention of customers to the products and services of the business. However, it is the order winner factor performance that greatly influences their decision towards purchasing a product or a service.

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