Answer in brief, Contracting with supplier partners in other countries can offer

Question

Answer in brief,
Contracting with supplier partners in other countries can offer challenges compared with dealing with onshore partners. What issues do you believe Liz and Michael should address when ordering from suppliers overseas? Should they order online, or off-line?

KIMBALL’S RESTAURANT: Long Distance Recipes

While Michael and Tyler were planning the operational and marketing aspects of the Lakeside location, Liz began to consider some details of the kitchen operations and menu. The family’s plan was to maintain the “hometown” meals and reasonable cost in the new location. However, she also thought that the menu needed some “upgrades” for the new location. She believed it was important to maintain their core menu choices but to also set a slightly different tone with additional menu choices for the Lakeside. Because their plan was to offer the Lakeside function room for business meetings, social functions, and special occasions for groups, a broader array of menu choices could give them a competitive advantage.

Michael and Liz enjoyed traveling to places outside of the United States. When they traveled, Liz explored the local restaurants and food stores to get inspiration for new recipes and ingredients. She found interesting items in countries such as Spain, Italy, Portugal, and France. She wondered how Kimball’s could stimulate their current menu choices as well as build new choices to rebrand the new location. Using the current menu along with her travel notes on various meals and ingredients, she was excited about developing a winning menu for their Lakeside location.

New View, New Menu

Liz began to develop new appetizers, entrees, and side dishes that used various imported spices and condiments. Whether it was imported olive oil, pasta, or

roasted peppers, the imported ingredients could add great value to the menu. Now, what would be the cost and availability for such items? She searched on the Internet for foreign suppliers to purchase items that she would need. There were several suppliers who sold and shipped products to the United States. She also researched several U.S. food suppliers to compare costs and shipping logistics. Michael and Liz then met to review her ideas and what she found.

Michael liked Liz’s additions to the menu. For example, an appetizer tray of various imported cheeses, olives, and roasted peppers could appeal to groups as well as individual patrons. Michael agreed with Liz that they were not abandoning their “old” menu selection, just expanding it to appeal to a broader range of customers. The upgraded appetizers could be marketed to a late-night crowd along with drinks and light fare. Michael also thought that these additional menu items could be offered on certain nights as a special promotion or for “after work” gatherings.

Michael, being the numbers fanatic, evaluated the costs of purchasing these items through a local supplier or overseas. He found the costs were very similar; probably balanced between the local supplier’s markup versus dealing with the overseas manufacturer/supplier directly. Purchasing from a foreign supplier did not seem outrageous.

Liz and Michael were pleased with the newly redesigned menu and its potential to brand The Lakeside a little differently than their current location.

Explanation / Answer

THE BENEFITS OF
BUSINESS PARTNERING
Win More Business
Spread Risks
Reduce Costs
increased range of customers
improved market intelligence
greater critical mass: ability to demonstrate collective capability
complementary strengths, resources, perspectives
greater flexibility within a team
pool resources
share costs of common functions (eg, product distribution; quality systems; sourcing and managing training)
strengthen negotiating power to obtain discounts when purchasing
attract public funding (eg, from European sources) which are often dependent on partnerships between businesses and with the public sector
Add Value to Products & Processes
innovation: new, more effective ways of doing things
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A partnership is defined as an on-going, mutually beneficial relationship between a buyer and a seller. Both stand to win if the relationship is successful, and both stand to lose if it fails. Most of the time, the understandings are formalized in a contract; but the partners may prefer an informal agreement. Cooperation and commitment are critical to the relationship. Partnering encourages the parties to share information, risks and even profits. This means that a partner accepts some responsibility for the other

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