A midmarket company suffers diverse challenges while trying to stay competitive and agile. Expanding into new markets is no longer an option; it's a must to stay dynamic and robust in the fast-paced evolving business environment. Expanding to serve multiple markets is the right move for midmarket companies seeking new business opportunities.
What risks must a solid supply chain overcome on its way to market expansion
Good supply chain management involves good and efficient risk management. Everyone knows this, yet unprepared supply chains remain a reality. A Supply Chain Management Review whitepaper efficiently lists common supply chain risks that every midmarket business should consider. Here is a summary.
- Outsourced manufacturing: “Consider oil and natural gas prices, environmental concerns, inflating wage rates, political climate, weather and other natural disasters, substandard and/or toxic ingredients an outsourced supplier might use, and more.”
- Environmental and social risks: Not paying attention to environmental and social risks can damage a business all the way to the consumer level. A Cone Communications study found that “71% of consumers consider the environment when they shop.” Supply chains benefit when consumers support “businesses that reflect positive environmental and social impact.”
- Last-mile distribution centers: Customers are usually driven by price and fast delivery. For a midsized business, determining and executing the best last-mile strategy (“the final transportation of goods from the delivery center to the customer's door”) is paramount. For this, partnering with a last-mile distribution center may offer benefits, “starting with the cost savings of not building your own distribution center.”
- Outsourced returns: This is simple: ” If you wouldn't consider outsourcing customer service, you might not want to outsource returns,” either. Processing your own returns gives you the opportunity to get feedback on returned items, and in-house returns usually receive better care and control. “Third-party fulfillment and returns companies are intended to be generic as they attempt to meet the needs of a wide variety of their customers.”
- Regulatory and compliance risks: Regulatory compliance can be “both a top supply chain and business concern.” Cooperating and collaborating with “regulatory affairs organizations” can help companies avoid fines, supply chain disruptions, and delays like product expiration.
What does it take for a supply chain to expand its market?
- A robust business strategy
- Appropriate supply chain infrastructure
- Meeting local, social, and environmental demands
When planning market expansion, midmarket companies must think of lead time, inventory levels, order fill, rates, and prompt delivery as important items in their strategy. Understanding each aspect of its supply chain in detail allows the company to achieve speed, cost reduction, flexibility, reliability, and sustainability. Reducing complexity and isolating actions increases visibility and thus profit.