Mr. John from ABC Ltd, Tanzania is an exclusive distributor of JJ India Ltd since last 20 years in Tanzania.
JJ India Ltd. is a well-known and established brand in the
field of industrial consumables. Mr. John have been doing a decent business
with JJ India Ltd, Importing industrial consumables from JJ India Ltd to
Tanzania and selling it to his customers. His business with JJ India Ltd have
been grown in decent pace, He has introduced various new products from JJ India
Ltd to Tanzania market and grown the business successfully.
Mr. John is operating with a decent gross margin of 25% in
his market since last few years (Till the year 2015), which is very lucrative
to stay into the business.
Tanzanian Currency (TZS) have been devalued against US
Dollar (USD) from year 2015 to 2016 by 30 %. (From 1700 TZS per USD in 2015 to
2200 TZS per USD in 2016) . Therefore Mr John’s import prices have gone up.
With higher manufacturing cost JJ India Ltd. was not able to
pass on the extra discount to ABC Ltd to make Mr. John stable into the
business.
To counter this situation Mr. John Has increased its selling
price by 15-20% as a result they have started loosing their market share, which
made them to sell their products at old rate. As a result their gross margin
has reduces to 12%.
A competitor of JJ India has started approaching to Tanzanian
market with same product but 25 % cheaper than JJ India Ltd and quality
approximately the same.
Tanzanian government also have made trading process tougher
for the traders like Mr. John.
Because of all above circumstances ABC Ltd. has lost its
market share by 30%.
Please suggest the way forward to ABC Ltd and JJ India Ltd
to sustain and grow their business in Tanzania Market.
If you want to read more such business case studies you can Buy a book called Case Studies in Management
>> Buy Now <<
bigo live app Here is the Guide on How to Download and Install Bigo Live for PC Windows 10/8.1/7 and Android Device and It is the Live Video Streaming Social Network
ReplyDeleteThanks for nice post, keep sharing eid ul fitr mubarak quotes
ReplyDelete