Costs to service and profitability approaches

Order Management
1. Customer Segmentation Approach
Given the point that the organization has sales forces and manufacturing divisions, it places it in a better position to utilize a multi-pronged approach in approaching customer segmentation. Applying both costs to service and profitability approaches is suitable for the long-term progress of the institution while keeping it competitive and sustainable in the long run. Given the point that Telco has been facing massive losses in a certain customer division to the high of $100 million, it is important to keep the production mechanisms in check to have the lowest possible production expenses, thus minimizing the losses and possibly attaining profits in the long run. This can be realized through using sustainable production approaches. Moreover, the profitability approach can be realized by introducing favorable trade discounts to encourage loyal customers, thus increasing the revenue base. However, from the available report, it is abundantly clear that the majority of the internal operation is due to the palpable difference between pretax profits and revenues.
2. How Telco can tailor its offerings for each customer segment
There are various options that can be pursued in tailoring organizational offerings to each customer segment to attain the optimal state. This can be carried out in diverse ways, which include redefining customer relations and restructuring how an institution accesses its customers. Telco Company can have its customers use contract distribution channels in product delivery, thus avoiding losses affiliated with direct involvement in the supply chain. Alternatively, Telco can change how the institution interacts with the customers, thus encouraging them to move to a new customer segment which can successfully minimize the incurable losses in the segment. Moreover, the institution can deploy price discrimination, thus charging varying prices for different markets, thus minimizing the loss margin in the losing customer segments.
3. Should some customers be told to take their business elsewhere?
While encouraging customers to take their services can be a suitable approach to minimizing losses for a poorly performing segment, this technique has a massive impact on both the internal and the market structure. This is because it might destabilize the institution after the job losses for the sales reps in the target segment. Moreover, this can lead to a decrease in the customer base, thus reducing the company’s diversity thus exposing it to vulnerabilities of competition. Therefore, an alternative mechanism for countering the challenge should be pursued in consolidating a business’s position in the market and especially the approaches that retain the customers and the workforce.
4. Service Packages to each segment
The revised packages should be introduced at different times to assess the actual impact and how a particular segment responds to the new introduction. This can be done through specific metric techniques such as an assessment of the degree of competition and how the new introduction impacts agility in the supply chain. If a positive score in the stated criteria is realized, then this warrants the deployment of more techniques. This assignment should be carried out by a special task force which can effectively monitor customer’s response thus foreseeing the actual feedback.
5. Question 5
By Telco organizing its production processes around the customers, this shall assist in reducing actual production costs thus increasing sustainability. Therefore, despite a few expenses that can be incurred in the reorganization of the institution, it is much more likely to consolidate its operations, thus increasing customers’ satisfaction through reduced delivery time and reducing delivery costs. Production processes shall be undertaken through increasing coordination between the manufacturing divisions thus allowing coordinated production for labor sharing and responding to fluctuations in demand between the various customer segments. Given that the institution shall be responding to external demands by the customers, the main organizational performance matrix shall be order fill rate and perfect order.