LasPalmas Chicago

Like any tree or bush, a business needs pruning and shaping after a certain period of time. In business parlance, it is called, ‘streamlining.’ Here is a quick look into why this is a crucial step in the long term success and survival of any business.

Changes in Market

Naturally, any start-up will carefully evaluate their target market when they start out and cater their products or services accordingly. Over time however, their products and services may change and evolve to the point that, in 10 years, their target market may have changed. Many businesses still carry on as if nothing has changed, refusing to conduct market research because it is an ‘unnecessary’ and ‘additional’ cost. By conducting periodic market research, a company will be able to understand and adapt to changes in their target market as well as other environmental factors that may have caused a change in their sales.

Changes in Employment

Most businesses start off with small teams, usually less than 10 members. When the group is small and working hard to make the business a success, they build up a rapport and bond that is hard to break. It also fosters a sense of exclusivity. As companies expand, they often struggle to bridge the gap between the original workers and the newcomers. If they do not implement induction, mentorship, and corporate recognition programs, there will be tensions between the OGs who feel entitled and the newbies who feel more up-to-date.

Changes in Pipeline

Again, a company starts off with all hands on deck, with the founder usually working alongside his/her team in order to get the company off the ground. As the company grows, it forms a corporate pipeline, with the CEO at the top and other original members of the company heading various departments. By the 10 year mark, most companies have forgotten that the reason they managed to carve out their niche and become successful is because of their daring, audacious and original ideas. Most companies will freeze new employees with good ideas simply because they haven’t ‘paid their dues.’ Around the 10 year mark, it is important to re-evaluate the current situation and shake things up a bit; implement employee engagement programs that will bring a steady supply of bold ideas to the table. Click here for more info on employee engagement programs.

Changes in Management

One of the most difficult decisions a company faces is when to ask a founding member to step down because their ideas and approach are not working for the company any more. Many original employees are offended when this is suggested but it is simply part of the natural process of a company’s growth. If you have won promotion after promotion and have been at one position for a while, it may be time to consider early retirement, or a change of jobs. It is easy to become too comfortable in a place and that is detrimental to yourself as well as the company you are running. Businesses require new ideas and vigour to survive the competitive business world and there are plenty of other things you can do to challenge yourself.

 

Distribution is a major activity that aid in the movement of products from the place of manufacturing to the place of consumption. The medium through which this is made possible is called as distribution channel. Manufacturers make use of different distribution channels in order to make their product available for the final customers.

The goods and services are transported from the manufacturers place to the consumers place through various mechanisms. Also, there are a number of people involved in making this activity complete like retailers, wholesale distributors, warehouse keepers and so on. The involvement of the people depends upon the type of distribution channel chosen by the manufacturer and also the type of product.

Distribution channels are broadly classified into three major types:

Manufacturer – wholesaler-retailer-customer

This channel is also known as the two level channels as there is the involvement of middlemen like wholesale distributors in Australia and is comparatively the longest channel too. The manufacturers sell their produce to the wholesaler who is capable of buying large stock of goods and have the required storage rooms to stock them. The prices paid to the manufacturers will be much low as there is a bulk purchase. The wholesalers in turn charge a small percentage as profit margin on the stock and sell them in smaller quantities to the retailers. Small retailers may not have enough warehouse space and facilities to hoard large stock of goods and so they purchase in small quantities. Retailers in turn again charge a profit percentage on the price paid by them to the wholesalers and sell the products to the ultimate customers. As the channel is long, the product’s price tends to be higher. Garments industry is majorly depending on this kind of channel.

Manufacturer-retailer-customer

This type cuts off the role of the wholesaler and so there is no heavy price hike in the products. Manufacturers sell their produce to small retailers or even big retail outlets at fixed price. The retailer then sells them to the final consumers at a rate higher than the price paid by them to the manufacturer. As the middlemen are not playing a role, the profit percentage of the middlemen is also saved by the consumers. These kinds of channels are mostly used by the big super markets.

Manufacturer-customer

The last and simplest type of distribution channel is the direct sale of products by the manufacturers to the customers. As it cuts the role of all middle men including the retailers, prices of products tends to be reasonably low. They are mainly useful for products that are easily perishable.

Knowing the types enable in best selection of the distribution channel to match the type of product.