Customer value, product repositioning and supply chain strategy: A case of supply chain design for LANSEA corporation

With continuous development of Chinese economy, the incomes of Chinese citizens are constantly increasing, leading to dramatical changes of consumer demand patterns, especially in household electric appliances. The analysis of income and household wealth shows that the proportion of the middle-class population is about 20%-30% of the total population, and this proportion is still increasing. Consequently, it seems that consumption is constantly upgrading. This means, on one hand, part of the consumers still focuses on quality and cost, while on the other hand, part of consumers pays more attention on performance and styles. Therefore, it is critical for the manufacturers to adapt to customer demand changes so as to create more consumer values.In this thesis, we study how to construct supply chains for newly introduced products of startup manufacturers.To achieve this goal, we start from examining the changes of market demands. We analyze the data of consumers in Chinese markets, in particular in small electrical appliances, and show that the growing trends of such products. To catch such demands, the firms have to position their newly developed product well. We then discuss the components of customer perceived values in such situations, including product function and quality, product selection, price and brand, value-added services, and relationship and experience, to help firms reposition their products. Based on these analyses, we propose an integrated model considering consumer demand changes and customer perceived values. The theoretical framework mainly includes three parts: consumer value creation, product positioning and supply chain design, which is of great significance for companies to explore how to develop or produce new products.Based on the theoretical framework, we study the supply chain construction for LANSEA Corporation, an emerging domestic hair dryer manufacturer, as an exemplar case to study supply chain construction for a new product manufacturer. We analyze the internal constraints of factory capacity and distribution capacity and the external environment under oligopoly competition, then construct a two-layer supply chain network model, and finally use the stimulation to propose an optimal solution for the real problem. Thus, we demonstrante the viability of the framework and the models through the supply chain construction of LANSEA Corporation, which form a circular process and product development for an evolutionary spiral.