Question

1. Why do you think B&O has decided to switch from relying on external distributors in Europe and emerging markets to relying more heavily on direct distribution through local stores they own and operate themselves?

2. Do you agree with this decision? Is there any downside to this choice?

Answer 1

1. In my opinion B&O has decided to switch from relying on external distributors in Europe and emerging markets to relying more heavily on direct distribution through local stores they own and operate themselves in order to get better control of the supply chain and eliminate any middle men associated with the product availability to the customers. Also in order to increase its margins and eliminate the margins of the distributors, company has taken this step.

2. I do not agree with this decision since the elimination of distributors limits the outreach of the products to all the regions and markets that B&O earlier used to cater. Distribution is now only restricted to the regions where local stores are present. Moreover, the increase in customer demand cannot be catered to since local stores have limited storage capacity and increased demand cannot be catered to resulting in lost sales to the company.

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