The managing director of Pakistan State Oil (PSO) must oversee the most significant transformation in the company's 29-year history, from a lumbering bureaucracy-laden state enterprise to the most technologically sophisticated oil marketing company in Pakistan. The company had recently embarked on a New Vision marketing program, which included loyalty cards, a 24 hour toll-free customer relations line, and renovated state-of-the-art service stations replete with convenience stores and Internet kiosks. However, at the time of the case, only about one in four service stations had been renovated under the New Vision program. A more recent proposal involved automating the company's retail outlets by linking online tracking of fuel deliveries to retail outlets, where specially designed sensors could monitor gasoline inventory and automatically place orders when stocks were low. Retail automation would allow PSO to know its exact inventory at any given time and thereby more efficiently manage its supply chain and logistics. To keep capital expenditure costs within limits, the managing director must decide whether or not to invest in retail automation or expand the company's New Vision program. At the same time, deregulation of Pakistan's oil industry was expected to result in increased levels of competition.
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