1) According to your Lecture 12 Supplement Notes: “International Distribution Network Value-adding Services – provide Customers with Product Accessibility (Availability), Product/Market Information, profitable Distribution Services, Partner Relationship Support Services, and Financing.” Discuss, in-depth, these Functions of International Distribution Systems 2) According to the Textbook, Major Factors that Influence International Distribution Decisions are – Distribution Structure, Channel Management, and Channel Control. Discuss, in-depth, What you will Consider, and necessary Actions (Strategies) – in these Three Important Factors

QUESTION

1) According to your Lecture 12 Supplement Notes: “International Distribution Network Value-adding Services – provide Customers with Product Accessibility (Availability), Product/Market Information, profitable Distribution Services, Partner Relationship Support Services, and Financing.” Discuss, in-depth, these Functions of International Distribution Systems

2) According to the Textbook, Major Factors that Influence International Distribution Decisions are – Distribution Structure, Channel Management, and Channel Control. Discuss, in-depth, What you will Consider, and necessary Actions (Strategies) – in these Three Important Factors

ANSWER

Functions of International Distribution Systems: Unlocking Global Market Potential

Introduction

International distribution systems are pivotal in enabling businesses to expand their reach and tap into global markets. These systems offer a plethora of value-adding services that enhance product accessibility, provide crucial market information, deliver profitable distribution services, foster partner relationships, and offer financing options. This essay will explore these essential functions in-depth, shedding light on their significance and impact on international trade.

Product Accessibility (Availability)

A key function of international distribution systems is to ensure product accessibility in various markets. This involves establishing an efficient supply chain network that spans different countries, enabling businesses to reach customers promptly and reliably (Hayes, 2021). By managing logistics, transportation, and warehousing, distribution systems ensure products are readily available to meet customer demands, thus enhancing customer satisfaction and loyalty.

Product/Market Information

International distribution systems provide valuable product and market information to businesses. They collect and analyze data on consumer preferences, market trends, competitive landscapes, and regulatory requirements. This information empowers businesses to make informed decisions regarding product adaptation, pricing strategies, marketing campaigns, and overall market positioning. Access to such crucial insights helps companies navigate complex international markets more effectively and tailor their offerings to meet local demands.

Profitable Distribution Services

Efficient and cost-effective distribution services are vital for successful international trade. Distribution systems offer a range of services, including inventory management, order processing, packaging, labeling, and customs clearance (Raj et al., 2022). By leveraging economies of scale and expertise in cross-border trade, these systems optimize the distribution process, ensuring timely delivery of goods while minimizing costs. This enables businesses to maintain competitive pricing, enhance profitability, and gain a competitive edge in international markets.

Partner Relationship Support Services

Building and nurturing partnerships with intermediaries and local distributors is crucial for international success. International distribution systems provide support services that foster strong relationships with channel partners (Osano, 2019). This involves activities such as training, marketing support, collaborative planning, and ongoing assistance. By strengthening partner relationships, distribution systems facilitate effective market penetration, brand building, and customer engagement in foreign markets.

Financing

Access to financing is often a challenge for businesses engaging in international trade. International distribution systems play a vital role in providing financial solutions to support companies’ global expansion. These systems offer trade financing options such as letters of credit, export credit insurance, and factoring services. By mitigating financial risks and providing working capital, distribution systems enable businesses to navigate the complexities of international transactions and seize growth opportunities.

Conclusion

International distribution systems serve as the backbone of global trade, offering a comprehensive range of value-adding services. From ensuring product accessibility and providing vital market information to delivering profitable distribution services, fostering partner relationships, and offering financing options, these systems enable businesses to successfully navigate international markets. By leveraging the functions of international distribution systems, companies can unlock their global market potential, enhance competitiveness, and drive sustainable growth in the dynamic world of international trade.

References

Hayes, A. (2021). Distribution Network: Definition, How It Works, and Examples. Investopedia. https://www.investopedia.com/terms/d/distribution-network.asp 

Osano, H. M. (2019). Global expansion of SMEs: role of global market strategy for Kenyan SMEs. Journal of Innovation and Entrepreneurship, 8(1). https://doi.org/10.1186/s13731-019-0109-8 

Raj, A., Mukherjee, A. A., De Sousa Jabbour, A. B. L., & Srivastava, S. K. (2022). Supply chain management during and post-COVID-19 pandemic: Mitigation strategies and practical lessons learned. Journal of Business Research, 142, 1125–1139. https://doi.org/10.1016/j.jbusres.2022.01.037