Logistics and distribution - Essay Example

Entering China Market: Candy Bars and Molding Machine Monmouth Entering China Market: Candy Bars and Molding Machine Candy BarsDecisions to consider:Your recommendation:Your rationale:Entry Approach Direct Investment China provides a conducive business environment for the foreign firms. It would be very expensive importing ready-made bars, and the imported bars would not be in a position to compete the locally made cheap bars.Shipping Methods TrucksA refrigerated tanker has to collect the raw material (milk) from the farms and transport it to the processing factories.

This is followed by transportation from the processing factories to the processor/manufacturer. Finally transportation to supermarkets and retails. Milk transportation requires refrigerators which may not be a reality for the trains and air. There are very reliable, and a powerful network of roads in China. It is cost effective to use road networks already existing in China to transport milk from the farms all the way to the consumer.Level of product or market riskHigh RiskChina is a manufacturing country.

There is definitely very stiff competition in milk and milk products manufacture.Level of financial risk Low RiskChina is a stable economy, relatively low inflation rate and strong political willFactors that could affect distribution service levelsMedium riskGovernment logisticsMolding MachinesDecisions to consider:Your recommendation:Your rationale:Entry Approach Joint VentureIntegrated Distribution and a reliable warehousing solution. Integrated solution system operates in real-time. It’s easy to upgrade the system when a competitor integrates its system.

Shipping Methods Trucks Best local transport network, affordable.Level of product or market risk High risk Stiff competition from the well-established Chinese companies those sales to the world.Level of financial risk Low risk China is a stable economy, relatively low inflation rate and strong political willFactors that could affect distribution service levelsMedium riskGovernment strict logistics and regulations on the sectorReferenceDonald C. and Waters J. (2003). Global Logistics and Distribution: Strategies forManagement.

Kogan Page Publishers: London.