MOPO6040 Managing an Online Portfolio

Assignment Brief

Word Limit: 4,000 (Plus or minus 10%)

Learning outcomes assessed:

At the end of a module students will be expected to be able to:

1. Develop the most appropriate, and if necessary create novel, processes for effective on-line supply chain management.
2. Develop and justify pricing strategies and differentiate the needs of off- and on-line pricing.
3. Critically evaluate the advantages and disadvantages of the use of e-commerce in business and its impact on supply chain management.

Assignment Questions

Background: Supply Chain Management

The buying behaviour of a number of companies’ customers is moving toward buying online rather than going to the physical stores. As a result of this, many companies may have to re-organise their portfolio and supply chain to accommodate the changing customer demands and behaviour. At the same, a number of companies that have been predominantly online-based are planning (or beginning) to set up high-street stores to complement their online business – an example of this is Amazon.

Currently, your company, whose current business model is online-only, is planning to create a high street presence.

Task

Produce a 4,000-word report on the requirements needed for your chosen company to create a high-street presence, focusing on the following:

Part 1

Critically analyse and recommend different techniques to engage and retain a good supply chain management system. Consider all the below for this section: a. The application of two models of supplier-relationship b. Elements of measuring supplier performance e.g. supply chain software applications c. Ways of managing supply chain risks

Part 2

Evaluate and recommend two pricing strategies that can be developed to meet the organisation`s demand and the rise of high-street shopping.

Part 3

Critically evaluate the decision to create a high-street presence, and a review of current buying behaviour pattern and the potential implications for the company

Sample Answer

Executive Summary

As consumer buying behaviours evolve, online-only businesses are rethinking their operational models. This report explores the strategic shift of an online-only business towards creating a physical high-street presence. The analysis includes techniques to strengthen supply chain management, pricing strategy adaptations, and an evaluation of consumer trends and risks. Recommendations are based on theoretical models and practical examples to guide successful expansion.

Introduction

With the growing convergence of digital and physical retail experiences, online companies are facing both opportunities and challenges in expanding to brick-and-mortar operations. While digital platforms provide reach and convenience, high-street stores offer tactile engagement and brand presence. This report addresses three critical areas required for such a transition: supply chain management, pricing strategy, and an evaluation of changing consumer behaviour.

Part 1: Supply Chain Management for High-Street Expansion

1.1 Supplier Relationship Management

To ensure seamless operations, supplier relationship models are essential.

• The Transactional Model: Emphasises short-term, cost-effective relationships. It is suitable for standardised goods with minimal strategic importance. While easy to manage, this model lacks flexibility and may not support long-term value creation in high-street operations.

• The Partnership Model (Strategic Alliance): Encourages mutual trust, shared risks, and long-term collaboration. This model is ideal for adapting to the complexities of both online and offline supply chains and promotes innovation, responsiveness, and co-investment in logistics and inventory systems.

Recommendation: Use a hybrid model, partnerships for core suppliers and transactional relationships for non-critical items, to balance cost-efficiency and strategic flexibility.

1.2 Measuring Supplier Performance

Performance tracking ensures accountability and continuous improvement. Effective tools include:

• Supply Chain Software: Cloud-based platforms like SAP Ariba, Oracle SCM, and NetSuite allow real-time inventory tracking, vendor performance analysis, and cost monitoring. These systems also support integration across online and offline channels.

• Key Performance Indicators (KPIs):

  • On-time delivery rates

  • Order accuracy

  • Cost efficiency

  • Return and defect rates

Recommendation: Implement supplier scorecards and digital dashboards for transparent performance reviews. Align incentives to KPIs to encourage reliability and innovation.

1.3 Managing Supply Chain Risks

The transition to a hybrid retail model introduces new vulnerabilities:

• Inventory Misalignment: Maintaining dual inventories (online and physical stores) increases the risk of overstocking or shortages.

• Logistical Delays: New store locations require recalibrated distribution models.

• Supplier Disruption: Expansion may require new suppliers or increased dependence on existing ones.

Mitigation Strategies:

• Diversify supplier base to reduce overreliance

• Use predictive analytics for demand forecasting

• Introduce flexible warehousing and fulfilment options (e.g., ship-from-store)

Part 2: Pricing Strategy Development

2.1 Dynamic Pricing (Online)

Online platforms can utilise dynamic pricing based on:

• Real-time demand

• Competitor prices

• Consumer segmentation

Advantages:

• Maximises profit

• Adapts to changing demand patterns

• Can be automated using AI

Challenges:

• Consumer trust issues if pricing appears inconsistent

2.2 Psychological Pricing (In-store)

In physical stores, price perception is critical. Psychological pricing methods include:

• Charm pricing (e.g., £9.99 instead of £10)

• Anchor pricing (placing higher-priced items next to average products to influence perception)

Advantages:

• Enhances perceived value

• Encourages impulse purchases

Continued...