Question 1: Was taking on the large and powerful companies the right thing to do?
Ultimately, firms enter markets to compete for market share and grow their bottom line. Marly saw the opportunity for growth and went for it. However, FSMI has no experience with large customers. The best option to address the experience issue would be to take on one major customer and learn the ins and outs of what it takes to satisfy their demand. Then, once FSMI is able to accommodate that customer, they should approach additional large customers. If there were problems or glitches with the initial large customer, FSMI would be able to find alternatives. Once the issues with the initial large customer have been resolved and the necessary systems put…show more content… Mexico or other Central America plants would be the optimal production option for foreign production. An overseas partner would be the best value for the Shop Co account. As noted in the case study, there are 3,100 Shop Co stores to meet demand at. The company will need to perform accurate sales forecasting in order to avoid stock-outs as international shipping and processing could increase lead times 50-300%.
Question 5: Could the overseas partner cost effectively produce Car Trader magnets as well since the quantity would be smaller and initially unknown?
We do not find it wise for FSMI to initially produce the CarTrader.com magnets overseas. Because the quantity is unknown, FSMI should use a domestic producer. Negotiation with a domestic producer would be easier and governmental restrictions would be the same for both FSMI and the producer. Further, domestic production would allow FSMI shorter lead times and the ability to easily maintain safety stock on hand.
Question 6: How would these orders be fulfilled, both to Shop Co.'s distribution centers and to CarTrader.com's customers?
We feel that the orders will need to be filled to match the individual agreements between the companies. The supplier relationship with the Shop Co suppliers might be an arm’s length due to a geographical distance while the relationship with the CarTrader.com suppliers may be more of a partnership where they split the expenses. For Shop Co, the orders would
