Suppliers can reduce supplies quality and increase supplies price. There are the bargaining powers of suppliers lead to high levels of threat when: the supplier’s industry dominated by small number of firms (the firms are small choice for purchase, suppliers can more flexibility to charge high price and reduce quality for increase the supplier’s profit), the suppliers sell unique or highly differentiated products (suppliers can operate in almost whole industry by their unique characteristics of products), the suppliers are not threatened by substitutes, the suppliers threaten forward vertical integration, and the firms are not important customers for
It determines the level of barrier whether it is easy or difficult for new entrepreneurs or investors to enter into an industry to begin a new business. The level of barrier is directly related to the threat of new entrants. For example, if the level or barrier is low, new entrepreneur can enter into the industry easily; therefore causing the competition of the industry to be high, then the prices and profits will fall (Williams and Mc Williams, 2010). Some industries are very hard to enter such as shipbuilding whereas some industries have a lower level of barrier like agency, restaurants or estate (Usmak and Arslan, 2012). A great example of threat of new entrants will be the baristas in the coffee industry because they have a low barrier to entry.
This puts pressure on them to expand beyond their financial capacity, so their own resources are not enough for this purpose. Oxenfeld and Kelly (1969) affirmed that, companies franchise when they do not have the necessary capital to own their own subsidiaries. The availability of essential resources constitutes one of the main reasons of franchising. The scarcity of capital decreases as the franchise becomes more successful over time and as the franchisor is able to self-finance his own operations. Additionally, the availability of a supply of managerial talent to substitute existing franchisees or administer new
The increased lead-time will affect suppliers by resulting in a decrease or a delay in sales because of the inventory inaccuracies delaying their shipment. 7. Additionally, there are increased expenditures affecting the product costs caused by the errors made in inventory, even for “c” level class products it will be a significant loss in overall profit on a yearly basis for regular miscounts in inventory replacement. 8. This negative impact also occurs in manufacturing, as more products need to continuously be manufactured because of the inventory shortages.
In these circumstances, redundancies are almost inevitable. The lack of finance could be due to a variety of factors. These include a fall in market demand, rise in competition or the degree of turbulence in the market, which causes a significant effect on businesses and investment. The Lack of Human resources in this process of change affects Silueta. The inability to meet the required cadre for outsourcing functions and the day-to-day running of the business will leave the company with a major threat.
Another example would be outsourcing a manufacturing job to a vendor, but that vendor needed some new machinery in order to complete the task. In this situation the vendor would most likely charge you for the new equipment. Usually when companies deal with outsourcing they feel as if they have a fixed cost throughout the contract, but in most cases additional costs are usually gained throughout the process of the job. Another disadvantage of outsourcing would be the exposure to confidential data. In most cases vendors that deal with outsourcing are not only working your company, they may be working for other companies as well and can be exposed many companies confidential information.
This is because when a company using scheduling operation system, it has to pay for buying the resources that related to scheduling and pay for training someone to manage the scheduling system. In addition, scheduling operations can be skewed since the company is difficult to schedule a process in manufacturing environment. This might cause many things go wrong and then lead to change in the schedule that already existed. Furthermore, lack of flexibility also one the disadvantage that can be brought by scheduling operations. Sometimes, that is some unexpected factors occur in manufacturing process.
The revenues of the business rely on the supply chain that delivers the products, and incase a key component of the process does not function as per the expectations; it becomes very difficult on the part of the business (Trunick, 2010). Most executives are faced with the difficult situation where they have to cut costs and at the same time meet the customer demands. This is a justification why it is important to have a risk analysis of the supply chain in order to avoid situations where the business operations are affected by events that are related to business or environmental
Having dissimilarity in attitudes, values and perspectives, disagreement about demands, goals, priorities and interests can raise the conflict and misunderstandings between the company members. Sizani(2010) stated, “conflicts and disputes occur more frequently in large organizations than in the small ones” as the decision being made by more than one owner, it would take more time than smaller businesses. Another aspect can be narrowed to Dlabaye, Burrow and Kleindl’s citation (2009: p,134), “big businesses can not serve or satisfy the specific customers where the amount of products and service designed for small business companies”. On contrast, in a small business organization, cause of minor operating nature of the management team, it is more convenient to attract the specific customers with their certain requirements for goods or services. Moreover, it is also easier to come up with swift and reactive decisions, usually in response to the consumer requests and demands that can give small business an advantage for edging over their big competitors.