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Introduction

The first half of 20th century was an age when enterprises were characterized by independent operations. Michael Porter (Sloan 2006. p. 24) described the competitive landscape of that time with Five Forces Model that the relations between companies and the suppliers, competitors, new entrants and buyers were actually confrontational. Business organizations would usually impose rigid control over the entire process from raw material supply, product manufacturing and distribution to marketing, aiming to gain the initiative. Obviously, this vertical integration management mode worked in relatively stable production-oriented market conditions, but would not go over well since the 1980s. One major reason lies in great changes in business environment caused by globalization. Companies have gradually switched gear from a traditional pattern focusing on quality, costs and other internal elements to a management mode highlighting external links to other companies. In addition, the diversity of customer needs and rapid progress in science and information technologies significantly facilitate the transition. Under this background, the idea of supply chain management emerges.

The term supply chain can be described as a functional network chain structure in which manufacturers, suppliers, distributors, retailers and end users are integrated through the control of flows of information, fund and materials in a business (Jacoby 2009, p. 89). Supply chain management is an integrated management approach which attempts to reconstruct the relationships of internal sections in enterprises and of different enterprises in related industries. Jack Welch, the former Chief Executive Officer of General Electric once noted that don’t bother participating in the competition without an edge in the supply chain operation. The British scholar Martin Christopher further pointed out that the market had no enterprises but only supply chains, which largely determined the victory or defeat of an enterprise (European-Asia Symposium on Engineering Design and Manufacture. 2004. p. 491). Nowadays, it’s indeed the case that any organization can never always do best in every link. Therefore, it is encouraged to coordinate and cooperate with upstream and downstream firms to establish a benefit-based chain. In the scheme, companies reject the old business idea, transcend organizational boundaries and form new strategic partnership, intending to reinforce complementary advantages and seek for common development.

The chain retailer is a typical bridge industry that connects customers with suppliers. On the one hand, it can contact consumers directly and learn about their needs, and on the other hand, it feeds back the information to the suppliers so that they can improve customer satisfactory and increase profit margins. From this angle, importance should be attached to the application of the theory in the chain retailer industry. In China, there have appeared a number of excellent chain enterprise, and GOME is one among them. Despite of the success the company has obtained, it is increasingly aware that the supply chain management problems have severally hindered its further progress. This is precisely what the report needs to be dealt with.  http://www.51due.net/writing/essay/sample1236.html

Situational Analysis

Company profile

The embryo of the retailing empire could be traced back to the year of 1987, when the founder Huang Guangyu opened a small shop in Beijing selling various kinds of household appliances. In 1992, the company tried to implement chain operation and named all its stores as “GOME Since then, GOME embarked on a journey of a vigorous and continues growth. By 1998, it acquired more than half of Beijing’s market share. Undoubtedly, the outstanding performance prompted the organization to develop outside Beijing and create new markets at national scale. In 2004, GOME was successfully listed on the Hong Kong Stock Exchange (Yen 2006). In 2010, the company shortlisted China's top 500 enterprises, and in the next year, it ranked first in the national home-appliance chain business.

Depending on accurate market positioning and innovative business strategies, GOME now has become China’s first brand of electrical appliance retailer. With the aim of reaching the world’s top, the company is ambitiously moving forward to further prosperity.

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