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Issues and Challenges (Franchise? (No (Bigger profit, More risk, Slower…
Issues and Challenges
Franchise?
No
Bigger profit
More risk
Slower expansion
Higher operating
expenses
Yes
Smaller profit
Less Risk
Faster expansion
Lower operating
expenses
Design on demand
retailing
Bulk Manufacturing
Lower production cost
Higher Inventory
Subcontracting
Low expense in Prop,
Plant and Equip
Vertical Integration
Higher expense in Prop,
Plant and Equip
JIT Manufacturing
Faster time-to-market
Real time demand
Low Inventory
costs
May require new production
and distribution facilities
Higher production costs
Advertisement
Aggresive Ad
Better for
market penetration
Higher cost
Current Model
Low ad cost
Seed investments
recovered slowly