- 10 Marks
BMIS – L1 – QE9 – Operations strategy
SkyStar Clothing evaluates forward integration by establishing its own retail outlets while maintaining sales through existing retailers.
Question
SkyStar Clothing Limited (SSCL) is engaged in the business of manufacturing a wide range of children’s clothing for the past six years. The Company has built a reputation for good quality products of the latest designs, and its brand name is very popular in the middle-class segment of the market. The Company strongly believes in a policy of giving “value for the customer’s money.” At present, SSCL markets its products through a widely dispersed network of independent retailers who sell the company’s brands along with the products of other manufacturers.
SSCL is considering a proposal of forward integration and establishing its own chain of retail outlets for the sale of its products. SSCL would, however, continue to sell its products through the network of existing retailers also.
Required
Identify and explain briefly the different factors which SSCL should examine while evaluating the proposal for establishing its own network of retail outlets.
Find Related Questions by Tags, levels, etc.
