1. Select two stores that you shop at regularly.

What competitive advantages do those stores have

over their competitors that cause you to shop there rather than at the competitors?

Apple Store is a well-known and trusted store in terms of selling mobile phones and
laptops. Over the years, the company has established a brand value that creates customer
loyalty. The product’s hardware, software, services and style are indeed high-quality standard.
The company’s commitment to continuous innovation and research development make it stand-
out compare to its competitors.

In terms of shopping experiences, I prefer going to SM Supermalls. Their famous tagline

“We’ve got it all for you” is undebatable. If you want to buy groceries, dress, gadgets and skin-
care products; you can find those in SM. If you want to watch Cinema, get some haircuts, do
pamper time; it’s also available. One of their competitive advantages is being a one-stop-shop.
There is no need to go to other places as the SM Supermalls GOT IT ALL FOR YOU!

2. Due to recent economic downturn, you are tasked with reducing costs in order to increase overall
sustainability of the business. One suggestion brought up by management board was to
outsource parts of the operations (e.g., purchasing, transportation, warehousing)
▪ Discuss the role of operation functions in supporting business sustainability.
▪ How and in what areas can operations reduce cost?
▪ Identify the advantage and disadvantage of outsourcing operations? What are the major
considerations for selecting areas in operation to outsource?

It is very important for every company to have a strategic operation. The management
needs to continuously seek ways to reduce cost in order to maximize profit and improves
economic viability. Outsourcing is indeed one way to lessen business expenses. It is the process
of hiring a third party to perform some parts of the operations.
When we outsourced operations, we can cut labor costs, including salaries for
personnel, building rentals, equipment, and technology. But on the other hand, when we do
outsource, other parties can access our company’s sensitive data. Not just the works are being
handed over; also, the trainings, research and development are passed to the other parties. It’s
like we are funding someone else to become smarter, it decreases our competitiveness and
increase our competition.
If I were to be asked, purchasing process is quite sensitive to transfer to third party as
they will have the access to our suppliers and other financial matters. Warehousing is also a little
bit critical to be handed over as this process includes direct control and handling inventories.
Transportation process is I think the safest to be outsourced. We can just avail some
transportation insurance to make sure our products are delivered safe.