Develop A Chewing Gum Business

Develop A Chew Gum Business

Develop a chew gum business. The business idea is chew gum. You are building a chew gum business. 1. Operations - Forms of Business Transactions. What will you use as form of business transaction? 2. Outline the supply chain of your business. Show the supply chain of your chew gum business 3. Given your supply chain, which processes (steps) of the chain would be “in-house” and which ones would be “outsourced”? Why? 4. Are there opportunities for strategic alliances and collaboration with other businesses? If so, why would you plan to form alliances with them? Specifically, what opportunities and threats might you face from the alliances (partnerships), and how would you take advantage of the opportunities and mitigate the threats?

Paper For Above instruction

Introduction

The confectionery industry, particularly the chewing gum segment, has experienced consistent growth driven by consumer preferences for fresh breath, convenience, and variety. Developing a gum business involves strategic decision-making related to operations, supply chain management, and collaborations. This paper discusses the operational transaction models suitable for a gum business, outlines its supply chain, considers in-house versus outsourced processes, and explores strategic alliance opportunities and associated risks.

Operations and Business Transactions

In establishing a gum business, the primary form of business transaction should be structured as a corporation or LLC (Limited Liability Company). These legal structures provide liability protection, facilitate investor involvement, and are advantageous for scaling operations. Business transactions involve procurement of raw materials (sweeteners, gum base, flavorings), manufacturing, distribution, and retail sales. Financial transactions will be managed through electronic invoicing, inventory management systems, and point-of-sale platforms, allowing transparency and efficiency.

The choice of transactions hinges on maintaining compliance with food safety standards, ensuring quality control, and streamlining procurement. Engaging in wholesale and retail transactions, including online sales, will diversify revenue streams and extend market reach. Electronic commerce platforms and traditional distribution channels will serve as key transaction modes, facilitating smooth operations across various customer segments.

Supply Chain Outline

The supply chain of a chewing gum business involves several key stages:

1. Raw Material Suppliers: Providers of gum base, sweeteners (sugar, xylitol), flavorings, and coatings.

2. Manufacturing: Production facilities where raw materials are blended, shaped, flavored, and packaged.

3. Warehousing: Storage of finished products for distribution.

4. Distribution Channels: Wholesalers, retailers, convenience stores, supermarkets, and online outlets.

5. End Consumers: Customers purchasing the product through various channels.

An effective supply chain ensures timely procurement, quality control, and efficient distribution to meet consumer demand while minimizing costs.

In-house vs. Outsourced Processes

Within this supply chain, certain processes would be kept in-house, while others will be outsourced:

- In-House Processes:

- Quality control testing to ensure compliance with safety standards.

- Packaging and labeling to maintain brand consistency.

- Product formulation to maintain proprietary flavors and recipes.

- Outsourced Processes:

- Raw material sourcing can be outsourced to specialized suppliers to leverage their expertise and economies of scale.

- Manufacturing might be outsourced to contract manufacturing organizations (CMOs) to reduce capital expenditure and focus on branding and marketing.

- Distribution logistics can be outsourced to third-party logistics (3PL) providers, allowing flexibility and efficiency in transportation.

This division optimizes costs, quality, and focus, allowing the business to be agile and competitive.

Opportunities for Strategic Alliances

Strategic alliances play a pivotal role in expanding market reach and innovating product offerings. Forming alliances with ingredient suppliers, retail chains, and marketing firms can prove advantageous:

- Partnering with retail chains enhances shelf space and brand visibility.

- Collaborations with flavor and ingredient suppliers can lead to product innovation, such as sugar-free or functional gums (e.g., vitamin-infused).

- Alliances with marketing agencies can boost brand awareness through targeted campaigns.

Opportunities:

- Access to new markets and customer segments.

- Shared resources reducing operational costs.

- Innovation through joint research and development initiatives.

Threats:

- Over-reliance on partners may lead to less control over quality and brand image.

- Conflicts over profit-sharing or strategic direction.

- Exposure to competitive threats if alliances are exploited by competitors.

Mitigating strategies include clear contractual agreements, establishing key performance indicators, and maintaining strong internal controls.

Conclusion

Building a successful chewing gum business requires solid operational planning, an efficient and flexible supply chain, and strategic alliances that capitalize on shared strengths while managing potential risks. By choosing appropriate transaction methods, delineating in-house and outsourced processes, and fostering mutually beneficial partnerships, the business can thrive in a competitive market and meet evolving consumer demands.

References

• Anderson, J.C., & Narus, J.A. (1991). Partnering as a customer strategy. Harvard Business Review, 69(4), 92–101.
• Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.
• Grant, R.M. (2019). Contemporary Strategy Analysis. Wiley.
• Lahtinen, M., & Wallin, M. (2013). Food supply chain management — recipe for success? British Food Journal, 115(9), 1303–1317.
• Mentzer, J.T., & Moon, M.A. (2004). Sales forecasting management: A demand management approach. Sloan Management Review, 45(2), 40–51.
• Porter, M.E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. Free Press.
• Savitz, A.W., & Webb, L. (2006). The Triple Bottom Line: How Today's Best-Run Companies Are Achieving Economic, Social, and Environmental Success. Jossey-Bass.
• SLR Consulting. (2020). Supply Chain Optimization in Consumer Goods Industry. Retrieved from https://www.slrconsulting.com
• Tate, W., & Dooley, R. (2012). Strategic alliances and competitive advantage. Journal of Business Strategy, 33(4), 57–65.
• Williams, T. (2019). The role of strategic partnerships in consumer product marketing. Marketing Intelligence & Planning, 37(4), 440–453.