Adchems Approach to Selling Clebal in Guatemala free essay sample

ADCHEM’S APPROACH TO SELLING CLEBALâ„ ¢ INTO GUATEMALA Following a review of the newspaper article, our recent law suit and events over the last one year concerning the sale of Clebalâ„ ¢ into Guatemala please find below my proposal, rationale for the proposal and proposed implementation plan: PROPOSAL A. Our organization should consider adding mustard oil to Clebalâ„ ¢ even though this might result in an initial drop in sales because of the increased cost of manufacture However, in the long term, this is a significantly lower cost compared to the potential long term revenue loss resulting from poor consumer confidence owing to negative press and eventual costs from legal claims for wrongful death – both of which could be reduced by the modification of the constituents of Clebalâ„ ¢ with mustard oil. B. No changes be made to the direct sales method of distribution in Guatemala. RATIONALE By adding mustard oil to Clebalâ„ ¢ will avoid violations of consumers trust and legal liability for deaths caused by the use of Clebalâ„ ¢. We will write a custom essay sample on Adchems Approach to Selling Clebal in Guatemala or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page I estimate that, by adding mustard oil to Clebalâ„ ¢ there could be a drop in sales due to a reduction in the effectiveness of Clebalâ„ ¢ (30% weaker), Moreover, eventual revenue from the sales of Clebalâ„ ¢ could well be reduced and production costs increased, in amounts difficult to estimate, as shoe manufacturers may look for substitute adhesives to Clebalâ„ ¢ and competitors may gain market share due to the change. However, in spite of the aforementioned disadvantages, I propose that AdChem should still consider adding mustard oil to Clebalâ„ ¢ because risking the lives of an estimated 5,000 children in Guatemala with a known toxic toluene based adhesive (Clebalâ„ ¢) could undermine AdChem’s reputation with all customers for an indefinite period not just for Clebalâ„ ¢ but for all AdChem branded products. There is also the potential cost of legal claims from at least some of the estimated 5000 Guatemalan children who could become fatally injured by the Clebalâ„ ¢, this is in addition to punitive damages, negative press and the excuse of compliance with government safety regulations might not be a complete defense as has been seen in other high profile cases. While it is admittedly difficult to estimate the monetary value of the future revenue loss to due to reduced consumer confidence and the costs from future legal claims, it appears that not adding mustard oil to Clebalâ„ ¢ could easily result in an outcome far less favourable than its addition, in spite of the relatively higher sales and higher revenues realized from not adding mustard oil to Clebalâ„ ¢. To enable AdChem closely monitor its sales and interface directly with its major customers I propose that at this point AdChem should continue sales directly to its customers. PROPOSED NEXT STEPS AdChem should consider adding mustard oil to Clebalâ„ ¢ as the advantages (no legal claims, positive brand image, long term revenue, consumer confidence etc) far outweigh the disadvantages (legal suits, poor consumer confidence etc) of not doing this. I propose that we do the following: A. Engage the shoe manufacturers in a forum, where their concerns are heard and their fears allayed. This can be done by explaining to the shoe manufacturers that the adhesive is still strong enough for shoe manufacture. B. Find innovative ways to allocate the additional cost of adding mustard oil to the adhesive e. g. redistributing costs in Adchem’s books or getting tax rebate. C. Could the government provide a subsidy to AdChem in the interim? Thank you.