Scm 470 - Fsmi Case Study

For Sale Magnets Case Analysis Questions

[1]: Explain the nature of For-Sale Magnet’s product. Given the characteristics of this product, what type of “supply chain” would be most appropriate?

FSMI’s product is an alternative to the traditional paper/plastic “for sale” signs used by most people who are selling their car by owner. The difference between their product and the traditional for sale signs is that FSMI’s for sale sign is a large magnet. These magnetic signs can be placed on the outside of cars for better visuals than the traditional sign and are significantly larger than the traditional signs as well.

[2]: What role should the availability (or lack thereof) of property rights protection (e.g., patents, trade secrets, etc.) play in shaping the competitive strategy that For Sale Magnets should pursue? 

Because of the copy, need to take the first step to take lead.

Patent protection was unobtainable. Legal experts believed that any serious challenge could nit be defended, and the cost of pursuing formal protection would be a bad investment. This would leave FIMI extremely vulnerable to exposing its product to distributor and manufactures.

[3]: What is the current supply chain structure that For Sale Magnets has? Be sure to include lead-time information and the downstream distribution structure.

Star (screen-printing in Georgia) manufactures the magnets. It started by producing 3,000 magnets total. Star doesn’t have much room to lower their prices for FSMI due to material cost. They have a lead-time of 3-4 weeks for large orders.(High cost, material and labor)

For packaging, Carson Cartons in California produces all the labeling required. Their lead-time is also 3-4 weeks.

The magnets are received from Georgia and the packaging is received from California both to FSMI’s home office in Eugene, Oregon. From here, the products are assembled by hand and then delivered personally to each of the eight local retailers they provide magnets to OR to the individual customers who have ordered directly through their web site.

[4]: Should For-Sale magnets pursue the opportunity with ShopCo, Car Trader, both, or neither? Provide an in-depth explanation for your decision.

FSMI should take on the opportunity with only ShopCo for now. I believe they should just start with ShopCo and possibly work their way to both ShopCo and Car Trader, depending on how the first partnership goes. The reasoning behind not taking on Car Trader is because their demand is extremely vague, unknown, and has lots of variation possibilities. For ShopCo, FSMI was given an exact number to have to put on the shelves as well as an exact number to have in stock at ShopCo.