Intel Organizational Structure Business Processes
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Intel Organizational Structure Business Processes
Business Processes in Practice 5.1: Intel’s Organizational Structure
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Organizational Data 131
Figure 5-3: GBI US distribution channels
Apple Inc. provides a good example of a company that utilizes multiple distribution channels. Apple sells its products through its online store (Internet), its Apple stores (retail), and third-party retailers (wholesale). Apple uses each of these channels to resolve different issues within the fulfi llment process.
Because Apple places a priority on the customer’s buying experience, it tries to establish either an Apple- owned retail store or a mass-market retail store in every major market. This policy ensures that the majority of consumers in most developed nations live within a short distance of a retail store that sells Apple products.
Although retail stores offer the best opportunity for consumers to examine the products before purchas- ing them, maintaining an extensive network of physi- cal stores entails many major expenses, including real estate, local taxes, and retail staff. Therefore, Apple very carefully evaluates new locations for its stores based largely on the local demographics of those con- sumers who are the most likely buyers.
When it is not feasible for Apple to establish a retail store in an area with a strong potential consumer base, the company must partner with another retailer to resell its products. Although this arrangement eliminates many of the retail costs identifi ed above for Apple, it also reduces Apple’s profi t per unit, because Apple must now share its sales revenues with the reseller.
Online retailing eliminates a great deal of the costs associated with operating physical stores. In addition, because the online channel sells directly to consumers, Apple does not have to share its profi ts with a reseller. However, because online retailers sell to any number of locations around the world, they must deal with ship- ping, taxes, and import costs that the retail channel does not have to. In addition, they must invest in the technical infrastructure that supports a global online retail site. Apple’s online retail operations, including the Apple store and iTunes, are based on SAP ERP.
Source: Apple company reports.
Business Processes in Practice 5.2: Distribution Channels at Apple
A unique combination of a sales organization and distribution channel is called a distribution chain. Some master data, such as material master and pricing conditions, are maintained at the distribution chain level.
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132 CHAPTER 5 The Fulfillment Process
DIVISION
Most companies consolidate materials and services with similar characteristics within a unit known as a division. Typically, each division is associated with a company’s product line. A product or material can be assigned to one division only. Each division can employ its own sales strategies, such as pricing agreements with customers. In addition, it is possible to aggregate reports at the division level.
A sales organization must have at least one division. A division can be assigned to multiple sales organizations, and a sales organization can include many divisions.
GBI currently has two divisions, the bicycles division and the accesso- ries division. Recall from Chapter 2 that GBI’s material list includes differ- ent material types. The fi nished goods—that is, bicycles—are managed by the bicycles division, while the trading goods—such as helmets—are managed by the accessories division. In the future, if GBI expands into other product lines, such as skateboards, it will create additional divisions. The divisions for GBI US and GBI DE are illustrated in Figure 5-4 and Figure 5-5, respectively.
Figure 5-4: GBI US divisions
John Wiley & Sons, the publisher of this textbook, has three main divisions that serve different reading mar- kets around the world. Wiley publishes college text- books through the Higher Education division. The Professional/Trade division contains the For Dummies, Frommer’s, Betty Crocker, CliffsNotes, and Webster’s Dictionaries series, as well as several other popular brands. Wiley’s third division is the Scientifi c, Technical, Medical, and Scholarly (STMS) division, which is the world’s largest publisher of professional and scholarly
journals and books. Although the physical products (books/journals) and the geographic regions are similar for all three divisions, the audience, authors, and distri- bution channels for each division vary greatly. Wiley has learned that by grouping its brands and the employees who are responsible for their success into three divi- sions, they can achieve greater synergies and operate more effi ciently.
Source: John Wiley & Sons company reports.
Intel Organizational Structure Business Processes
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