The Chinese Fireworks Industry - Case Study Example

The best participants in the fireworks industry are foreign importers. The reason being; they possess the following advantages: they have unlimited access to information; agents on the ground; and direct contact with factories. However, the sad thing is that importers have to incur the high costs of permits, shipments, and inventory taking before selling. As a merchant/retailer, he will be able to get supplies from the local companies, brand them and even improve the quality of the products. Thereafter, she would sell them at higher prices both locally and internationally. However, the disadvantage associated with this is that there will be minimal control of exports; more companies will join the market; this will lead to enhanced policies and restrictions thus reducing profit margins. (The Chinese Fireworks Industry-Revised: page215 )
2. The suitable point for jerry to enter into the industry is like a merchant. Because the Chinese products are of inferior quality compared to those from Japan and Korea, as a merchant he will obtain supplies from various local factories. Subsequently, brand them and improve on their quality (The Chinese Fireworks Industry-Revised: pg 219). He could then set up wholesale booths in the countryside. Thereafter, peddlers and other small-scale dealers would source the commodities from the market and sell in the surrounding communities. Consequently, he would avoid the low-profit margins as a manufacturer and brand identity loss. Given the reasonably good quality of Chinese products and cheapness, branding and better quality fuse replacement of the same products would render them at higher sale prices (The Chinese Fireworks Industry-Revised: pg 214-216).