Established in 1999, ABC is an online wholesaler of building materials, focusing on hardwood and laminate flooring, tile, stone countertop, roofing, and decking. Initial growth within the company was a result of key relationships within their supply chain, ownership of the distribution component of the supply chain, and a proprietary logistics management system (LMS.) The company plans further development of this system, which reduces internal distribution costs as well as freight costs to the customer through optimization of several shipping processes. ABC believes that this system will be a first in the market for such technologies. Additionally, there may be an opportunity to commercialize the system as a separate business venture. Although this may present new opportunities, the company must consider the impact on its core business and competitive advantage. Any new initiative should be carefully analyzed based on a consistent alignment with the company’s cost-leadership strategy.
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