NU 6 Assignment topic #1 by Joevic C Pasit

NU 6 Topic # 1  : New Business Set Up

By : Joevic C.Pasit –AGSB –REGIS CLASS ILOILO

New distribution network approach for Agchem industry;

Before the introduction of the generics compound in the market, there are only few numbers of multinational companies distributing the crop protection chemicals for the control of pest and diseases that damage the agricultural crops.

The multinational companies set up then was to appoint distributors in the provinces. These distributors will be the one to cater the requirements of the dealers who is the one selling directly to farmers.The set up have been effective then as there are no other channel that the dealers will depend on their purchases.

This set up was also profitable both to the distributors and the dealers since they can control the pricing and protect their profitability. Competition is not that stiff between dealers in a locality and they can ensure the  quality of the product they are selling.

The market has changed when the generics compound was introduced. A group of people who were formerly connected with the multinational companies form their companies and carried generic brands. These group are selling directly to the dealers and no longer follow the traditional distribution network. As more generics local companies are doing this multinational company distribution have been affected in terms of volume and the price  of the original branded products were highlighted by these generics company giving them the opportunity to eat up the market. 

The new set up that I will be proposing to introduce to Jardine Distribution Inc (JDI)  will be to breakdown its distribution network meaning open additional distributor as secondary distributors on a per territory . These distributors are those that are considered  as the big dealers having annual volume of business of more than 10M.

With this set up, there will be an assurance of product availability and will prevent stock out. With this set up there will be an equal footing when it comes to distribution but the advantage would be in the marketing campaign in the field in which JDI is fully represented.  3