Nanjing Chuangqi Auto Parts Company is faced with a unique business environment because of various changing business trends and dynamics. Currently, the company is faced with a challenge of integrating its product line (Sharp and Yang, 2001, p. 9). In addition, the management has to decide whether to outsource its major processes or make them internally. It should be known that the company has had limited success as far as international expansion is concerned and this is major concern.
These are situations that are currently facing the company and because of their urgency, they are supposed to be evaluated and looked at for long term sustainability. The company has had limited success with its international expansion program and that is why it needs to work on its supply chain.
To manage their supply chain in future, they should first of all sort out their liquidity issues to give it an upper hand in the market (Hugos, 2006, p. 13). Because the auto industry has a lot of competition, they should come up with good measures to involve various supply chain stakeholders for sustainability.
As much as the company has been actively involved in expansion programs, they have not been successful. In this case, the company needs to go on the drawing board to evaluate its currents strategies that have not worked. At this stage, it will not be advisable for the company to go on with its expansion plans (Harwit, 2001, p. 21). Instead, it should focus on current projects to gain economies of scale. This will give it a competitive advantage to compete well in the market before it can think of future expansion plans.
Economies of scale are necessary in the auto industry because it has high costs of production and companies need to be strategic in their decisions and ideas to succeed. Therefore, at this stage in the company’s life, it needs to first of all establish itself before it can think of going international (Kenworthy, 2004, p. 14). Should the company decide to expand because this is still an open option, it should focus its attention on buying equipment instead of subcontracting.
If the company buys its own equipment, it will be in a good position to satisfy the market without straining. This is because subcontracting is expensive and might have various shortcomings that can end up affecting the company’s operations. The company should be able to produce enough products that will satisfy different consumer needs and this can only be achieved if they are in charge of their own production activities (Hugos, 2006, p. 26). In the long run, they will be able to know where and when to supply their products.
Nanjing Chuangqi Auto Parts Company has a great potential in the market and should look for enough funds to enhance its supply chain and come up with effective strategies (Sharp and Yang, 2001, p. 16). Before the company decides to expand to a new market, it should critically evaluate it to avoid any supply chain constraints. By looking for investors through good funding initiatives, the company will be in a good position to finance its supply chain and this is a competitive advantage.
The only weakness with such an option can be seen in various demands that the new investors will likely come up with. As a matter of fact, the company should evaluate its business strategies because they have not been effective. This can be proved from the fact that its international expansion program has had limited success (Georgano, 2003, p. 23).
By reviewing its business strategies, the company will be able to align itself strategically in the market. In this case, it needs to attract new talent and this may end up being costly (Hugos, 2006, p. 34). All these aspects have a high probability of success because they will have a positive impact on the company’s operations. As a matter of fact, the management is committed to ensure that the company is successful.
Reference List
Georgano, G, N. (2003). Cars: Early and Vintage: 1886–1930. London: Grange- Universal.
Harwit, E. (2001). The Impact of WTO Membership on the Automobile Industry in China. North York: Captus Press Inc.
Hugos, M. (2006). Essentials of Supply Chain Management. New York: John Wiley & Sons.
Kenworthy, J, R. (2004). Transport Energy Use and Greenhouse Emissions in Urban Passenger Transport Systems. Ontario: Firefly Books.
Sharp, J, D., & Yang, A. (2001). Nanjing Chuangqi Auto Parts Company. Beijing: Beijing University.