China Post Harvard Case Solution & Analysis

On the basis of the above types of transactions, e-commerce business models can be recognized into three general classes i.e. portal, market maker and service provider. Everything depends on the objectives and aims of the company about whether they use single model or multiple models (Coyle, 2003). The first model portal is the simplest platform service for customers giving them the information and searching options and services. It is used by the companies to advertize and promote their brands efficiently and effectively to the customers. The second platform service is market maker, which is advanced and modified as compared to the portal. It provides searching services to customers like portal and assist users to facilitate economic transactions with the instrument for trustworthy conduct of business transactions (Mahadevan, 2000). Every transaction of this platform will directly contribute in the revenue as a provision fee on the market places. The last model is a product of service provider facility. They are basically known as trading directly in selling goods to customers via internet. Concerning all the types of goods, the delivery of physical goods will participate in some kind of logistics activities (Coyle, 2003).

2. 4 What Is Third Party Logistics?

Third party logistics is basically a service provider that provides services as third party logistics. In the industry jargon, these service providers are referred to as the third party logistics. It is a term that is used for the firm that provides services to its customers as an outsourced third party services. Third party logistics providers are typically specialized in warehousing, integrated operations and transportation services that can be ranged and customized for each customer based on their need for the market conditions and the demand and delivery service requirements for the material and products manufactured at the company (Coyle, 2003).

Third party logistic providers usually go beyond the logistic services and even include value added services that are related to the production and procurement of goods. Therefore, these service providers are called the third party or the supply chain management providers for the company (Ngai, 2002). The third party logistic system is basically a process, which targets particular function in the management. It may be like transportation, warehousing, raw material, etc. According to researcher, third party logistics are firms that offer a wider range of logistics activities for their customers. Third party logistics is also defined as the consumption of outside firms to perform company operation. Company that provides various logistics activities to its customers is termed as third- party logistics (Mahadevan, 2000).

The third party logistics industry is going through a rapid change due to potential driving forces. The drivers for this change are advancement in technology, information, communication level, information market places and the emergence of retailers; thus, advancements of information technology is leading to the development of the new supply chain strategies. In addition, internet has made it really easy for virtual business to enter into the business (Chen, 2001).

They require outsourcing needs logistics functions to perform their operations smoothly. This need of logistics functions brings in the role of third party providers, who provide them the logistics activities of buying, selling, and transportation to make their business run efficiently. Within this third party provider sector, many types of companies are merging that includes freight market places, which posts available equipment on bulletin boards, some are application service provider that develops and deploys software tool and services for companies and some are intermediaries that give information of the rising logistics industry (Coyle, 2003).

A considerable interest has been emerged worldwide in recent years in the growth of third party logistics providers. The providers are engaged in providing various services such as freight payment, auditing, carrier selection, warehousing, rate negotiation, development of information system, inventory management and customer order fulfillment. The third party providers are also acting as a bridge towards the growth of global market by creating strategic channel middlemen such as port operators, foreign shipment providers and trade managers (Chen, 2001).

2.5 What Services Does a 3PL Provide?

A third party logistic service provider offers following services that include: supply chain management, warehousing, consolidation and order fulfillment.

2.5.1 Supply Chain Management

A supply chain network basically ensures that the product or service is delivered to the customer through successful e-commerce business solution.

2.5.2 Warehousing

Although an e-commerce business owner may not necessarily require having a physical store but still physical stores need a location to be stored. Therefore, a third party logistic will typically look after the warehousing requirements. It will invest in the technology and space required to effectively run a normal spaced warehouse. Therefore, the expectation of using a warehouse by a third party logistic is considered more efficient as it allows spreading the overhead expenditure to various clients...............................

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