Thursday, June 05, 2008

Rosewood Case Study: Key Issues In Exporting To Mexico

Rosewood Case Study: Key Issues In Exporting To Mexico

* Customer Service

Sales in Mexico will require consideration of significant lead time and possibly a specialized product mix to match unique Spanish language and Hispano-cultural requirements on packaging and in communciations. This will cost money. As mentioned in current technological trends e-commerce opportunities are high in Mexico at this time and may provide opportunities for online cataloguing and ordering versus new warehousing considerations or implicating JIT processes. For example, San Carlos Imports and Southwest Furniture Design Inc. provde style and trend samples such as Sante Fe, Mission or Spanish Colonial styles which might influence design modifications for Rosewood's product line in Mexico.

* Manufacturing

At the same time options exist for Rosewood to choose to continue full production in Canada. However this would be determined by forecasting sales in Mexico first. International partnership opportunities exist with ventures such as San Carlos Imports or Southwest Furniture Design Inc. where profit sharing from manufacturing parts of the product in their facilities, or purchasing portions of finished product from them and detailing it at a final finishing facility in Mexico exist. Consulting maquilladora contractors concerning industrial locations might help.

A complete turnkey operation in Mexico might not be the best first option for small sales forecasts. Perhaps first direct export of domestic production would be followed by increased demand with a profit-sharing partnership with a finisher closer to the border followed by increased demand with a complete Mexican production facility.

* Marketing

Rosewood seeks to be a niche player possibly developing products singularly designed for the Mexican market, aiming for a small pool of rich customers - research would need to determine current luxury office furniture sales companies in the market to determine the feasability of acquiring their customers. For example is it a saturated market? Are these customers extremely loyal? What kind of commitment to customers will ensure their product loyalty? What kind of customer turnover is acceptable which maintains global market approaches to growth and profitability? An expensive office furniture set may be a rare once in a life time purchase. What kind of social or community commitment with such Mexican furniture consumers is required to ensure any growth in customer base? Several agencies excel at answering these types of questions.

* Inventory

The supply chain needs to be mapped out to provide "oriented for action" changes which minimize costs for distribution of product stocking points, levels and locations. Cooperation between all supply chain partners will be essential to make effective and streamlined decisions regarding continuous improvements. Such an orientation is often difficult for western-world businesses to make independent of contracting consultants to make recommendations for them. Loads of free case studies to extrapolate however.

* Transportation

The best methods of shipping, delivery, choice of carriers, speed of service, consolidation, and monitoring to minimize costs of transport need to be determined. Obviously this is not an air-freight product. However the choices between multi-modal rail, truck or ship movements must be balanced to provide the best opportunities to maintain a margin of profit. Tricky to determine considering trends and pace of change in environmental conditions relating to transport infrastructure. Statscan comes through but busy may not always mean better. It could just mean slower.

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