|Axon company spending graph|
|Total Spend in 2017
Factors driving the need for the category
Various factors exist that lead to the need of the category under consideration. Thus, the factor amounts to the reason which the organization must have the category in place. Primarily, the requirements revolve around the needs of the end customers. The end customers require having the goods right at their disposal as and when they need them. There are various aspects that come with having the products at their disposal and having the ability to use them.
There is need to provide the customers with the right quality of products as they need it. Many of the customers give the details that they expert their products to have as they are delivered to them. It is, therefore, the role of the organization to spend on demanding a high level of raw materials quality so as to transfer the same to the end consumers. Normally, quality goes hand in hand with the costs. It is for this reason that the company spends more and more each year to ensure that the quality level is updated. The company’s records indicate that the plastic products come into the organization ion their finished shape. This means that the quality of the final product is defined at the source, which is in the suppliers’ premises. Therefore, Axon spends as much as possible on the suppliers to ensure that the materials brought in match the quality demanded by the customers. From the graph, it is seen that Axon spends more on Trocha than any other supplier. This is highly related to the quality that is given by Trocha. In addition, Axon spends the least amount on Airspeed Company, being a new supplier. The reason for the limited spending is because Axon isn’t sure at the first time if the quality offered by Airspeed meets the demanded level (Axon n.p). The analysis indicates that Axon spends more money as it gets to interact more with the supplier. However, the trend may not be true in all cases as the spending on a supplier reduces upon the delivery of low-quality products.
Axon deals with many customers from time to time. The number of customers served by Axon has increased with time. In the same way, Axon has to get identify the suitable sources of the raw materials to ensure that the demand by the customers is met. As the demand from the downstream customers’ increases, the company looks for new suppliers such as Airspeed. Also, the company spends more on the existing suppliers. In comparison, the company spends more on the suppliers under the category under consideration in 2017 as compared to 2016 (Hatting n.p). This is an indication that the demand from the customers increased in 20917 and Axon had to spend more to earn customers loyalty.
Service is quite important in the day to day operations of the company. For this reason, Axon enjoys the service delivery offered by Trocha more than any other supplier. Therefore, the level of service quality offered by the suppliers defines the spending level of Axon on the respective supplier.
Historical trends in demand and future projection
Demand has been increasing. For instance, the demand from the suppliers increased from the year 2015 to the year 2017, and by a big margin. This is an indication that the demand from the downstream customers has increased as well (Granell 834). To cater for the increased demand, Axon has had to spend more on the suppliers to meet it effectively. The history could, therefore, predict the future. The demand is expected to rise in future. For this reason, the company will have to spend even more to meet the demand posed by the end consumers.
Axon, David. Exploring the role of the stakeholder in fast-moving consumer goods cross-sector collaborations: a phenomenological study. Diss. Edinburgh Napier University, 2016.
Granell, Ramon, et al. “Power-use profile analysis of non-domestic consumers for electricity tariff switching.” Energy Efficiency 9.3 (2016): 825-841.
Hatting, Henry Lindo. An opportunity exploration and best practices analysis for South African mobile value-added companies entering the Ghanaian market. Diss. Stellenbosch: Stellenbosch University, 2015.