There are many times an organization or business could find itself in market saturation, and often, the supply chain might just be what will bail them out.
The supply chain is more than an operation you rely upon to get the product to the consumer. It is also an essential aspect of the business that can proffer solutions in a crisis.
In this case, we are looking at how to rely on the supply chain to manage or overcome a saturated market.
Businesses tend to flock to a market that is doing well. If you think about it, you cannot really blame. Every business is out to make money.
However, when these businesses become too many, serving only a select number of clients, it becomes a problem. It also increases the level of competition, which is good, but it can get uncomfortable for many businesses.
So, how can the supply chain help? There are three distinct ways.
- Increased Customer Satisfaction
- Cost Reduction of the Product
- Engineering Innovation
Let’s explore each of them.
1. Increased Customer Satisfaction
Your customers are the primary point of your supply chain. They are the reason behind the entire enterprise. Without them, there will be no business or supply chain.
Ensuring their satisfaction is a great way to maintain loyalty, which helps you solidify your market share. It can also attract more customers to your goods and services. After all, the best form of marketing is a satisfied customer.
There are key ways your supply chain can improve customer satisfaction. This is by improving the things customers care about. Examples: order processing, lead times, and error-free deliveries.
Think about Amazon and its hold on the American logistics industry. In Indonesia, we have Gojek, and in Africa, you may think about Jumia and its tight grip on the market as well.
One thing these businesses have in common is how they can get goods to the customers. They also have more error-free deliveries compared to their competition.
These go a long way toward satisfying the customer and making them feel like they are valued. It also keeps them coming back for more.
2. Product Price Reduction
An age-long strategy for battling market saturation and immense competition is price reduction. It has helped many businesses solidify their grip on the market and so on.
But with the rising cost of raw materials and inflation, there is only so much a business can do to reduce the cost of goods without relying on the supply chain.
If you are a supply chain manager, this could be dreadful, especially in the middle of a market saturation. Finding areas to cut costs can be a cumbersome process, but there are ways to simplify the process.
By reducing the cost of its operation, the supply chain can directly impact the cost of goods and services. It can do this through strategic partnerships, leveraging technology, and inventory management.
For more insights on how to reduce costs in the supply chain, you may want to take a look at our article on the subject: Strategies for reducing supply chain costs.
3. Engineering Innovation
Market saturation heightens competition in the supply chain, but nothing breeds innovation like competition, So it’s not all bad.
For better or worse, competition between businesses is less between the business and more between its supply chain. And supply chains are the birthplace of innovations.
Businesses and their supply chains can engineer innovations. Here are some strategies: continuous improvements, tech, collaboration with suppliers, and training or hiring skilled labour.
Innovation doesn’t always have to be in the product itself. It could be in the way the product is presented to the customer. For instance, e-commerce businesses now give customers the ability to track their goods from the point of order.
Many other businesses are enabling traceability of their supply chain. They are showing customers how much they value sustainability practices and how they ensure it in their supply chain operations.
Never be afraid of competition in the supply chain. Always rely on your supply chain to see how to use it to your advantage.
The strategies highlighted here are three key ways any business can use its supply chain to overcome or manage market saturation. These approaches give the business a fighting chance, especially when they are just starting out.
Obinabo Tochukwu Tabansi is a supply chain mastro and writer with a decade of experience working in different facets of the supply chain. Today he is living his passion for writing on all things supply chain. His blog, Supply Chain Nuggets, is Africa’s fastest-rising supply chain blog, helping professionals, business owners, and curious minds navigate the supply chain complexities on the continent.
