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Toys R Us and Amazon's Supply Chains

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1) Describe how Toys R Us products get from manufacturer through the DISTRIBUTION channel to the final consumer, (if Toys R Us manufactures a product or products).

2) Describe LOGISTICS or how Toys R Us products are transported (land, sea, air, etc.)-- or even how component parts are obtained for manufacturing.

3) Describe their retail PHYSICAL FACILITY to including its location, its exterior and interior appearance, and related place issues such as the decision-rules used to decide where products are located in the facility, being a retailer.

4) With regard to the product(s) (good(s) and/or service(s)) Toys R Us offers, do they have a COMPETITIVE ADVANTAGE with its DISTRIBUTION channels or issues? Your answer should be a "Yes" or a "No" followed by your defense of why you chose Yes or No. Be sure to include references to the background materials to support your response.

Please be specific, that is, directed toward each competitor. A simplistic example is that Burger King may have competitive advantage over KFC in terms of location, but it does not have competitive advantage over McDonald's. Of course, you would elaborate more and explain why Toys R Us does or does not have competitive advantage in distribution/place relative to each particular competitor.

P&G bought Gillette in 2005. As an example of competitive advantage, consider where P&G distributes its products (drugstores, supermarkets, mom and pop stores, and convenience stores). Now consider where Gillette sells its products (drugstores, supermarkets, mom and pop stores, and convenience stores). At least from a channels perspective, it made a lot of sense for P&G to purchase Gillette.

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Solution Summary

The solution outlines the distribution channels of a supply chain and discusses Toys R Us and Amazon

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1) Describe how Toys R Us products get from manufacturer through the DISTRIBUTION channel to the final consumer, (if Toys R Us manufactures a product or products).

There are many ways the products that Toys R Us manufactures get to the final consumer. One of the company's best selling items is the Toys R Us Swing Set. (Caxton 2007) The product is manufactured in York County, PA. (Toys R Us 2008) The product is distributed through two channels.

1) The product is delivered to the stores via truck transport for the consumer to purchase and take home the same day.

2) The product is sold on the Toys R Us/Amazon website. Amazon is the exclusive online distributor of all of Toys R Us products (Amazon 2008) this way of delivery eliminates the middleman, as the product is purchased directly from the company and the consumer pays the delivery fee to have the product delivered to his or her home.

2) Describe LOGISTICS or how Toys R Us products are transported (land, sea, air, etc.)-- Or even how component parts are obtained for manufacturing.

Toys R Us are located national and internationally in Canada, Asia, Australia, Europe and the Middle East.

Mike Jacobs, the Senior VP of Logistics for the company states, ""This was a strategic project and not just a tactical one. Obviously you need to integrate across the supply chain. You can't implement Manugistics [Rockville, Md.] as a stand-alone system, or a Retek [Minneapolis]-system, or warehouse management-system, or any of our other systems. They need to work together. Whether its product visibility, better replenishment methodology, or new logarithms to be able to calculate in-stocks and what safety stocks should be, it needs to work together across the organization." (Toys R Us 2008)

Jacobs discusses how ...

Solution provided by:
Jo Ann Prevetti, MBA, PhD (IP)
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  • Bachelor of Science in Paralegal Studies, Kaplan College
  • Business Diploma, Katharine Gibbs Business College for Women
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