Distribution

Question 1

distribution introduction

Answer 1

operations management covers the logical side of distribution , marketing focuses on the RELATIONSHIPS among channel members
B2B issues - conflict - negotiate favorable selfish terms (power)

Question 2

Porter’s 5 forces

Answer 2

marketing side of distribution considers two power forces : 1. bargaining power of buyers
2. bargaining power of suppliers

Question 3

relationship between breakeven point and price

Answer 3

not linear
as price drops closer to variable cost, the break even value increases exponentially because price>vc
B/E = FC / (price-vc)

Question 4

determinants of buyer/seller power

Answer 4

economic leverage - scale economies, price ability
product differentiation - quality
importance of brand name - loyalty
influence on decision making - customer knowledge

Question 5

vertical integration

Answer 5

complete control over supplier- however, in competitive markets outsourcing has become increasingly useful in many aspects of production

Question 6

Outsourcing

Answer 6

“buy versus make” decision
product development
sales
advertising

Question 7

outsourcing advantages/ disadvantages

Answer 7

buying becoming favorable over making
1. lower costs
2. flexibility
3. legal protection
4. higher competencies/ innovation
5. strategic focus
risks/ assessment necessary
1. true costs/savings
2. loss of control
3. switching costs

Question 8

offshoring

Answer 8

outsourcing =/= offshoring -

• perception front office - good
• perception back office - bad