File-It Supplies, Inc. (fis) Case Study

CASE STUDY: FILE-IT SUPPLIES, INC.

Patsy Akaka, marketing manager for File-It Supplies, Inc. (FIS), which is a file folder manufacturer that has been in business for over 28 years with current sales of 40 million. They also offer lines of file markers, labels, and indexing systems. Although the company has expertise in the field, Patsy is facing a tough decision because her main customer has requested the purchase of FIS products under its own private brand. Business Center Inc. is their main customer and there is the potential to lose their business if they don’t accept the deal.

One major challenge is that the company’s largest customer Business Center Inc. wants to buy FIS file folders and sell them under their own name. Business Center Inc. is a major distributor of office supplies and the strategy of using their own brand is already in more than 45 products in the market. They have requested this offer before to FIS and they declined, however they continued to buy products from FIS. The company accounts for about 30% of FIS sales, so keeping this customer satisfied is necessary for Patsy in order to avoid a potential downturn in the business and the main concern is that they will stop doing business with FIS if they turn down there offer again.

Another challenge facing FIS is that local stationers businesses are looking into using large wholesale distributors like Staples, Office Max, and others. This is because they want to try and band together in order to receive a volume discount, which would make them more competitive against the 150 Business Center stores. These Large suppliers have the ability to offer the product at a lower price. This has a direct effect on their business with Business Center Inc. even though they are doing well right now. The potential effects of this happening would mean that Business Center Inc. will eventually be out performed by these large corporations, again because they will be able to sell the product at a lower price.

The third challenge is the root of all the issues facing FIS as a company and it is their corporate policy. The policy was set in place to avoid excessive dependence on any one customer, and to sell its own brands of higher quality products. With that said the company is dependent on their biggest customer Business Center Inc, despite the policy. So the challenge here is to turn this negative into a positive for FIS and become more in line with the demands of the market

I believe that the model FIS has for its distribution right now is an adequate one. I like that they have three channels, but in both the Business Center and the local stationeries channel I see