Business Environment

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Presentation transcript:

Business Environment

Business Environment Case Studies CASE STUDY (20 Marks) In 2000, a fire at the Philips microchip plant affected phone manufacturers Nokia And Ericsson. The companies reacted in different ways, and ultimately, Ericsson did not do well, quitting the mobile phone business and allowing Nokia to win over the European market.

While Ericsson had tied up all of its key components in a single source and planned to wait out the problem with the fire, Nokia worked to snatch up spare chips from other plants and suppliers, as well as reengineered some of their phones to adapt to different chips from new suppliers. It's not hard to imagine what happened after that. Nokia kept trucking along, while Ericsson suffered from months of lost production and sales, allowing the market to be dominated by Nokia. This incident and fallout is a classic lesson in supply chain risk management.

Answer the following question. Q1. Discuss on the consequences of disruption in supply chain management. Q2. How Nokia managed the risk in supply chain management. Debate