Question

Write the advantages and disadvantages for all types?

a) Manufacturer

b) Wholesaler

c) Retailer

d) Hybrid

e) Service – capital intensive

f) Service – labor intensive

Answer 1

1. Manufacturer

Advantages

· Manufacturer earns the highest amount of the margins as the origin of the product begins from here

· Various Incentives are being given to the manufacturer such as financial assistance, legal identity, tax relief for specified criteria’s

Dis-Advantages

· Manufacturer also bear the risk from manufacture to market and sale the product and to create a brand

· Manufacturer needs to make heavy capex for creating whole plant and no-profit for initial years of incorporation and also had risk of entire business failure.

2. Wholesaler

Advantages

· No risk or hassel to manufacture products

· Since wholesalers deal in bulk only, good amount of margins are available to them.

Dis-Advantages

· High credit risk of customers as they are generally owners of retail shops

· Difficulty in handling and management of bulk Inventory

3. Retailer

Advantages

· No credit risk as the retailers do their business on cash basis only

· Incentive are given by manufacture for achieving target sales of their product

Dis-Advantages

· Low amount of margins are earned by the retailers as the MRP is fixed.

· Difficult to grow and increase sales as the customers are limited to individuals only.

4. Hybrid

Advantages

· Benefit of hybrid will lead to higher margins and profitability as the intermediary will be reduced

· Higher Market share for the product will be gained by the firm due to hybrid in nature

Dis-Advantages

· Hybrid nature often results in mis-management of business which may result into losses.

· Increase in transportation cost as the distribution will be made available to the retailers.

5. Service-Capital Intensive

Advantages

· Quality and fast driven service process will take place and minimal wastage of resources would be there.

· Dependency on labor will be reduced as the the firm will be driven by capital intensive machines.

Dis-Advantages

· Since the firm will be capital intensive, lesser employment opportunities will create

· Huge capital investment to be made in initial years of incorporation and might possible that the business could fail and investment would be write off,

6. Service-Labor Intensive

Advantages

· The firm will lead to create ample employment opportunities which will create the good image in the society.

· The quality of the product will also be increased as the manmade product are of manufacture with more care

Dis-Advantages

· Dependency on the labor will increase as the firm will be labor intensive only

· Time Consuming service process will be there as the labor can’t match the speed of capital intensive