Last year, BP was concerned that a major competitor was introducing a treatment that was similar to one of its own bestselling products. BP felt that the best way to compete was to improve its customer service by opening regional warehouses in its major markets of Northern Europe. These warehouses would guarantee same day delivery. To make sure that this was a sensible move, the company did a survey of 60 major customers. This survey confirmed that delivery time was by far the most important factor to them. The following table summarises the results when customers were asked to rate the importance of factors on a scale of 1 (not important) to 5 (very important).
Factor
Average response
Same day delivery
3.1
Next day delivery
4.9
Delivered when promised
2.7
Products delivered from stock
3.4
Cost of products
1.3
No errors in delivered products
2.8
No errors in paperwork
1.5
Ease of order entry
1.7
Ease of payment
1.4
Ease of access to customer relations
2.1
Knowledge of customer relations
2.5
Although same day delivery was fairly important, it seemed that most customers would be happy with next day delivery. From the survey, BP also found that its competitors only guaranteed next day delivery for 60% of orders. Another interesting finding, was the perception that BP did not share information with customers, and did not publish details of product lead times, products that might have shortages, likely delays, and so on.
Question:
What is the strategy to compete the rival, if you are a BP manager?