Select a category that you believe might be chosen for a strategic category analysis in the industries listed below. Describe the factors impacting each commodity, using a Porter Five Forces analysis (described earlier in this chapter). Justify why you believe the category is strategic to that industry, and the approach to be used in developing a category strategy. a. Oil (West Texas intermediate) versus gasoline (discuss differential) b. Metals c. Chemicals d. Plastic resins e. Shipping f. Wood products and other production materials g. Aeronautical equipment h. Machine tools i. Telecommunications j. Paper

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Purchasing and Supply Chain Manage...

6th Edition
Robert M. Monczka + 3 others
Publisher: Cengage Learning
ISBN: 9781285869681
BuyFind

Purchasing and Supply Chain Manage...

6th Edition
Robert M. Monczka + 3 others
Publisher: Cengage Learning
ISBN: 9781285869681

Solutions

Chapter 6, Problem 1DQ
Textbook Problem

Select a category that you believe might be chosen for a strategic category analysis in the industries listed below. Describe the factors impacting each commodity, using a Porter Five Forces analysis (described earlier in this chapter). Justify why you believe the category is strategic to that industry, and the approach to be used in developing a category strategy.

  1. a. Oil (West Texas intermediate) versus gasoline (discuss differential)
  2. b. Metals
  3. c. Chemicals
  4. d. Plastic resins
  5. e. Shipping
  6. f. Wood products and other production materials
  7. g. Aeronautical equipment
  8. h. Machine tools
  9. i. Telecommunications
  10. j. Paper

Expert Solution
Summary Introduction

To select: A category and analyze how the category is strategic to an industry.

Category strategy development:

A category is a specific family of products or services that are utilized in delivering the appropriate value to the customer. A strategy is developed to deliver the category products or services in the supply chain management process. It is known as category strategy development.

Explanation of Solution

Categorizing and analyzing how the category is strategic to an industry:

Oil versus gasoline:

The analysis made by EIA indicated that crude oil price is the main contributor to the change in gasoline prices in Country U. The prices of crude oil are greatly affected based on the level of supply relative to the demand for oil and petroleum products that are made from crude oil.

Strong worldwide demand and growth for petroleum products in the mid-period of the 2000s were the major reasons for the high crude oil prices in the mid of the year 2008. The seasonal change from summer gasoline to winter gasoline with lower cost combines along with reduced gasoline demand. It also contributed to the general reduction in prices from October to December 2011.

Oil prices have fluctuated widely since then mainly due to the concerns of petroleum supply worldwide and the economic conditions all over the world.

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