Launching new products is usually challenging for any business, especially during the beginning stages of identifying their supply chains. There are numerous factors and issues to consider carefully, and specific attention should be paid to INCOTERMS – a set of terms defining seller and buyer responsibilities and rights. The purpose of this paper is to propose a supply strategy for a company that is looking to launch a new line of televisions.
First of all, it is essential for the firm to complete the sourcing process. When selecting suppliers, it may be beneficial to find them in China because such cooperation may bring high-profit margins and lower risks in imports. Chinese manufacturers offer TV parts of different quality, which is why the company needs to ensure that the selected supplier produces high-quality details. What is more, it is recommended to learn whether the supplier works within the framework and rules of INCOTERMS – this will allow for avoiding undesired issues during delivery. While the benefits of Chinese suppliers are listed, some disadvantages may include delays or low quality of TV parts, as well as customs problems. Further, sea freight may be the most suitable transportation method because it is rather cheap and eco-friendly. The latter is especially crucial for many customers, and the company may win from its sustainability. However, sea freight is slow and involves a third-party company that ships the delivery, which may be severe disadvantages.
As for customs, it is vital for the company to have the required documentation to receive clearance from Customs and Border Protection. This step can be time-consuming, but the advantage is that it avoids detainment or examination of the cargo (Simmons, 2021). Finally, when deciding on distribution, the firm should select wholesaling because this method will lead to higher sales, let the company be certain that marketing is handled by others, and additional retailers will also want to become wholesalers soon. One disadvantage of this method is that if the product is not bought regularly by customers, retailers may decide to quit the cooperation. The outlined strategy may be good as it avoids additional costs and has more benefits than risks or weaknesses. Finally, when measuring the supply chain, the company will need to evaluate whether delivery is on-time, the quality of TV parts is high, there are no additional spending and customs issues, and distributors are willing to buy large volumes of TVs to sell them.
Reference
Simmons, K. J. (2021). How to import from China in 6 steps: The ultimate guide.