Samsung: ‘less’ is the new ‘more’
Samsung announced its plans to reduce the variety of their smartphone models. In 2014, Samsung introduced 56 models of smartphones. In comparison, Apple introduced only two. A removal of 25 – 30% of their smartphone portfolio during the next year is expected to reduce the material costs and allow more targeted marketing campaigns. Samsung is relying on the economy of scale principle and the reduction of operating costs to compensate for the 49% loss it has experienced in the third quarter of 2014.
A very similar SCM strategy has been implemented by Apple after Steve Jobs returned to Apple in 1998. As the majority of mobile manufacturers and platforms have very similar features, there is currently no big technological leap to be made in smartphone hardware. The solutions that the technology firms are left with: cutting costs, increasing the profit margin while continuing to look for the ‘next big thing’.
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Sustainability? No, thank you, I can’t afford it.
According to the Sustainable Food Supply Chain Commission’s study called ‘The Long and the Short of It’, consumers may not be willing to pay a premium for food products with an environmentally and socially sustainable supply chain. The study found that there is a limit to how much extra customers are willing to pay for higher standards. Moreover, the market share that can be acquired is also limited due to the tough competition from companies which do not pursue high sustainability standards and hence are able to offer products at lower prices. The study highlights the need to look for ways to keep the food supply chain sustainable at lower costs.
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The New Silk Road project is on its way
China plans to bring the Silk Road back to life – intercontinental land routes and maritime links through central Asia leading all the way to Europe. A new bank will be established in China to fund the New Silk Road development with an initial investment of about €32 billion. These funds will be used to attract further investments for the establishment of necessary infrastructure as well as financial and industrial cooperation. The New Silk Road would reduce China’s dependency on freight lines which are dominated by European shippers. Moreover, it would spur the development of new markets for Chinese products. The New Silk Road would connect the Pacific Ocean and the Baltic Sea with a single transportation system, which would be an enormous achievement benefiting not only China, but also Kazakhstan and eastern European countries, such as Lithuania.
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Have a nice weekend!
