Transport and Innovation
THE THREAT OF GLOBAL GRIDLOCK
A Case Analysis
GLOBAL BUSINESS MANAGEMENT
September 25, 2012
EXECUTIVE SUMMARY
The case “The Threat of Global Gridlock” by George Stalk highlights that the world is about to face a major crisis in transportation because of not meeting the demand of the global economy. The author believes that currently the threat has been masked away but it's imminent and if the prerecession trend reappears it would be a serious problem with the lack of infrastructure and the rising prices of oil. According to him there are four basic means of transportation that are by truck, train, ship or air. So choosing the right means is important to gain competitive advantage over competitors, moreover to save cost of logistics. Similarly the waves of globalization, regional integration and other business practices are in increasing trend so this case also talks about the impact of transportation network problem on the today’s retail and durable goods companies as well as provide guidelines what companies can do to deal with such problem that may occur in future.
STRATEGIC ISSUES
The impact of transportation bottlenecks, increasing congestion and delays in logistics will hit all around the globe. So having a better supply chain management and efficient logistic networks under these circumstances could give a company the competitive edge over its rivals. Similarly, in coming days doing business will be more complicated and complex due to the global gridlock in the supply chain management. Any means of transportation like truck, train, ship or by air are not free from the congestion threat. The congestion in the logistics systems not only hamper the effectiveness and efficiency in the supply chain management but also invites the series of problem like raising the cost of working capital, reducing the goodwill of the business, losing the market share, increase in the production cost. Another important issue address is that the companies should
A Case Analysis
GLOBAL BUSINESS MANAGEMENT
September 25, 2012
EXECUTIVE SUMMARY
The case “The Threat of Global Gridlock” by George Stalk highlights that the world is about to face a major crisis in transportation because of not meeting the demand of the global economy. The author believes that currently the threat has been masked away but it's imminent and if the prerecession trend reappears it would be a serious problem with the lack of infrastructure and the rising prices of oil. According to him there are four basic means of transportation that are by truck, train, ship or air. So choosing the right means is important to gain competitive advantage over competitors, moreover to save cost of logistics. Similarly the waves of globalization, regional integration and other business practices are in increasing trend so this case also talks about the impact of transportation network problem on the today’s retail and durable goods companies as well as provide guidelines what companies can do to deal with such problem that may occur in future.
STRATEGIC ISSUES
The impact of transportation bottlenecks, increasing congestion and delays in logistics will hit all around the globe. So having a better supply chain management and efficient logistic networks under these circumstances could give a company the competitive edge over its rivals. Similarly, in coming days doing business will be more complicated and complex due to the global gridlock in the supply chain management. Any means of transportation like truck, train, ship or by air are not free from the congestion threat. The congestion in the logistics systems not only hamper the effectiveness and efficiency in the supply chain management but also invites the series of problem like raising the cost of working capital, reducing the goodwill of the business, losing the market share, increase in the production cost. Another important issue address is that the companies should