Sustainable Supply Chain
The establishment of Clif Bar & Company is premised on its creation of a product to solve an identified problem. With the reliable market opportunity, the company makes wholesome products from natural ingredients. Clif Bar & Company does not have its production and distribution stores, and therefore it selects affordable who are partners aligned to its goals. These elements enable it to have sustainable chain supply from its farmers who supply the ingredients, to companies that process its products and stores that help in the distribution of its products. Thus, the strategy is workable for the company (Krajewski, Malhotra, & Ritzman, 2015).
Financial risks
Outsourcing all aspect of the company’s supply chain operations will result in an increased cost of production (McIvor, 2005). Given that Clif Bar & Company outsources all of its components, the cost is determined externally which limits its ability to influence the prices of its inputs. Factors such as labor and the grins, nuts, and fruits come from farmers. Since they are outside the firm’s control, other factors can come into play resulting in price fluctuation. If Clif Bar & Company was operating its production units and distribution bars, it could be able to manage the costs of production. This will reduce the cost of outsourcing (Krajewski, Malhotra, & Ritzman, 2015).
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Risks in expansion
For a business to go global, it must confirm the market, availability of raw materials and the production costs (Travis, 2007). In case Clif Bar & Company expands to international level, the company will encounter several constraints that will increase its cost of production. To begin with, the company relies on natural ingredients that only a few farmers are practicing thus it will lack raw materials for the production of its bars. Secondly, the company relies on other companies to process its products, which may not be available on a global scale. Finally, it also depends on other distribution stores to avail her products to the consumers, which will also be limiting factor. Besides, Clif Bar & Company’s products are only tried locally, and thus there is no assurance that it will succeed once it goes global (Krajewski, Malhotra, & Ritzman, 2015). The management should establish itself locally before it advances to the global market by owing its subsidiaries and distribution stores.
References
Krajewski, L. J., Malhotra, M. K., & Ritzman, L. P. (2015). Operations Management: Processes and supply chains, student value edition . Pearson College Division.
McIvor, R. (2005). The outsourcing process: strategies for evaluation and management. Cambridge: Cambridge University Press.
Travis, T. (2007). Doing business anywhere: the essential guide to going global. New York, NY: John Wiley & Sons.
