What the German Company Told?
Can the case proof that small logistic company can be success under globalization?
Can “Moormann Böckmann GbR”(MBG) being defined as a logistic company is already a controversial argument. However, no matter it is a trading agent or a logistic company, it is no doubt that the company play an important role in the potato supply chain. Some people proudly say that the success of this company proof that “Small logistic company cannot survive long time in market” is a wrong statement. However, under the trend of globalization, this company is expected to be eliminated from the market very soon. In this article the business mode of the small German company would be presented and their situation under globalization would be discussed.
Why they success in past 30 years
The business mode of the 3 men company is simple, source the potato from the local farmer and arranges shipment to the buyer.
As the productivity of a single local farmer may not able to satisfy the buyer, the buyer may have to collect the potato for each farmer one by one which would cost very high administrative cost and transportation cost. Also, the yield of each single farmer is not stable. It is hard for a buyer to build up a long term partnership with the farmer, the stability of the potato supply cannot be guaranteed. In a nutshell, the cost of buyer directly buy potato from the farmer would be very high.
Also, since the productivity of each farmer is not too much, their bargaining power against the buyer is weak, the potato collection price may not very high, and as they are not able to build up long term partnership with the buyer, the demand of the potato are not stable, so that the farmer may not likely to invest in potato production. The potato price may further boost and the whole supply chain profit maybe hurt.
Therefore, MBG plays important roles in coordinate between small farmer and the buyer from retailing or industrial field. MBG no...