Lighting the World
18-3 What manufacturing strategy should Nokero pursue? Should it continue to supply all of its light bulb orders from a single factory location in China? What impact could uncontrollable issues such as COVID-19 have on Nokeros sourcing strategy?
Nokero is a company that makes solar-powered light bulbs. The company started out by selling its bulbs in Africa, where there is a great need for affordable and sustainable lighting solutions. Nokero has been successful in Africa, and it is now expanding its sales to other markets. One issue the company faces is how to manufacture its bulbs. Should it continue to supply all of its light bulb orders from a single factory location in China? There are advantages and disadvantages to this strategy. On one hand, manufacturing in China is relatively cheap, and Nokero can take advantage of economies of scale. On the other hand, shipping costs may increase as Nokero expands into new markets, and there is always the risk that production could be interrupted if there are political or economic problems in China. Another option would be to set up additional manufacturing facilities in other countries, closer to Nokero's target markets. This would reduce shipping costs and risks, but it would also be more expensive....
Nokero must weigh these considerations carefully as it decides how to manufacture its products (Serapio, n.d.).
Of course, there are several potential problems that can arise from single source supply chain management. First, the reliance on a single supplier creates a situation of dependency, which can lead to higher prices and terms that are unfavorable to the buyer. Second, if the supplier is located in a different country, there is the potential for language barriers and cultural differences to create communication difficulties and...
…up a network of small, locally-owned franchises that could sell and service Nokero products. Finally, Nokero could direct its
marketing and distribution efforts towards online channels such as social media platforms and e-commerce websites. The rationale behind this is that by using these channels, firms are able to reach out to a larger target audience with relatively lower costs. In addition, online channels also allow firms to have a more direct interaction with potential customers, which can help to create a better understanding of customer needs and preferences. However, while there are certainly benefits to using online channels for marketing and distribution purposes, it is important to note that there are also some risks and challenges associated with this approach. For example, one of the main risks is that of potential fraud or scams. Whichever approach Nokero decides to take, the goal should be to make its products accessible…
