5-Step Critical Thinking Decision-Making Model
Step 1: Identify the problem(s) and uncertainties
What exactly is the problem…
|The overall profitability of Clif Bar & Company is dependant on outsourcers since they do not own any manufacturing plants or distribution centers.|
The problem is this …
|Due to the recent shifts in the market related to the bigger companies’ attention to organic foods, this dependence poses a threat to the bar’s capability to survive in the long run.|
This is an important problem because…
|The increased competition resulting from stronger players’ enhanced activity in the market might eventually lead to financial losses for Clif Bar & Company or even their inability to compete.|
The key question(s) that needs to be answered to solve this problem is…
|How can the company eliminate the risks stemming from the dependence on outsourcers? Is it possible to increase their number to gain more independence from less reliable suppliers? What other changes can improve the company’s image compared to other players in the market?|
Step 2: Obtain information
The following information is needed to answer this question…
|Risks resulting from the dependence on outsourcers, their reliability in the current conditions, and the distribution chain.|
Some important assumptions I am using in my thinking are…
|If Clif Bar & Company cannot compete with other participants in this niche in terms of production, it should develop characteristics increasing its attractiveness to customers. It can also change the components of the supply chain corresponding to the current needs.|
The points of view relevant to this problem belong to…
|The managers of Clif Bar & Company and outsourcers.|
Step 3: Make predictions about the future
If this problem gets solved, some important implications are…
|The increase in sales and the improvement of the company’s image|
If this problem does not get solved, some important implications are…
|The risks of losing customers to bigger companies with more attractive offers, corresponding financial losses, and outsourcing problems resulting from fewer orders. Subsequently, this situation might lead to the loss of suppliers.|
The potential alternative solutions to solve the problem are…
|Reorientate the company’s activity with consideration of the recent market trends and start producing not only organic foods for athletes but also for other categories of customers with special needs.|
Step 4: Make decisions by choosing among alternatives
What is the best solution and why…
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|The best solution is to increase the number of outsourcers and other partners to make the company less dependent on the possible failure of some of them.|
The situation of Clif Bar & Company is complicated by the emergence of stronger competitors. Hence, specific measures should be developed and implemented to allow them to survive. As can be seen from the case scenario, the possible problems are connected to the dependence on numerous outsourcers due to the lack of their own manufacturing plants and distribution centers. Therefore, it is necessary to consider the existing supply chain, business risks, and future development of the company to ensure its competitiveness in the market.
Clif Bar & Company’s Sustainable Supply Chain
The first aspect of the activity of Clif Bar & Company is the proper organization of the supply chain, which allows them to successfully perform major business operations. It can be viewed as sustainable since the established practices correspond to environmental and social concerns. Thus, the former is represented by the orientation on natural raw ingredients and the refusal to produce anything but organic foods without pesticides, herbicides, and genetically modified plants. The latter, in turn, is related to the contribution to the people’s overall wellbeing, which is the characteristic of a socially responsible company. In this way, it can be concluded that the existing supply chain can be perceived as sustainable due to the correspondence of their decisions to the principles mentioned above.
Business Risks and Outsourcers
Since the identified risks are directly connected to the significance of outsourcers in the production process, it is critical to pay particular attention to them in the first place. Therefore, their relations with Clif Bar & Company should be reassessed to avoid the adverse impact of a possible failure on the business under the conditions of the increasing competition. Regarding financial responsibility, the risks imply the losses deriving from the potential disruption in delivering raw ingredients from outsourcers. Meanwhile, according to Klochkov et al. (2017), establishing higher requirements for them positively correlates with target customers’ satisfaction. From this perspective, the proposed solution, which is the increase in the number of reliable suppliers of raw ingredients alongside food diversification, fully corresponds to scholars’ theories.
Risks to Sustainability in the Case of Expansion
The complicated situation of Clif Bar & Company can be worsened if they need to expand their activity. In this case, new risks stemming from the attempts to enter the international market will be related to the uncertainty in terms of the volumes of manufacture leading to dissatisfaction and frustration among the suppliers (Abdel-Basset et al., 2019). They will be complemented by the current lack of mitigation strategy and, therefore, this initiative should be well-thought (Adbel-Basset et al., 2019). Otherwise, the company might lose reliable outsourcers who will prefer other partners providing a clear picture of further needs regarding the quantities of raw materials or other services. However, as can be seen from the previous analysis, Clif Bar & Company should focus on the elimination of risks in the current circumstances rather than expansion. Thus, such a measure does not seem to be reasonable until the specified task is successfully performed.
In conclusion, the created supply chain of Clif Bar & Company presents an example of sustainable development of a business through outsourcing. However, an extensive network of suppliers and other partners does not guarantee their success in the conditions of increasing competition. Therefore, it is necessary to reassess their relations with others and introduce new products. Once these goals are met, the expansion implying entering the international market will be possible. In this case, it will be effective if the company develops a risk mitigation strategy.
Abdel-Basset, M., Gunasekaran, M., Mohamed, M., & Chilamkurti, N. (2019). A framework for risk assessment, management, and evaluation: Economic tool for quantifying risks in the supply chain. Future Generation Computer Systems, 90, 489-502. Web.
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Klochkov, Y., Klochkova, E., Didenko, N., Frolova, E., & Vlasova, N. (2017). Development of methodology for assessing risk of loss of a consumer through the fault of an outsourcer. In 2017 International conference on Infocom technologies and unmanned systems (Trends and future directions)(ICTUS) (pp. 719-724). IEEE.