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Advantages and Disadvantages of Costs in International Physical Distribution
Advantages and Disadvantages of Costs in International Physical Distribution
For any company that wants to export, one of the options that must be controlled
are those of international transportation and distribution in the destination market,
these factors must be handled correctly by the company so that the product arrives
at the appropriate times and in the manner that final consumers requested, this in
order to maintain quality and thus generate a brand identity and it is a recurrent
error in the companies that are concerned in their desire to reduce costs and
increase their margin of profitability
For each entrepreneur, the distribution is a cost problem that must be faced, these
costs are normally high, which generates an additional cost in the product that the
consumer ultimately pays. And it is understandable since there are different actors
that can intervene from their productive chain to the distribution chain. The
important thing of this is that it is guaranteed that expectations are met and quality
does not diminish. That is to say, any failure in one of the stages of a product can
suspend the distribution system that affects international business and therefore
we would reach the customer's loss imminently.
For this purpose there is the international physical distribution, which is the logistic
process that takes place in the export of products and whose main objective is to
reduce costs, times and risks to the maximum from the point of departure at the
origin up to the point of delivery to the final destination.
For a company to expand and seek better opportunities in the market, it must
consider the investments of time, effort and capital, therefore, the correct logistics
that it carries out is possible to reduce the costs of the products for the benefit of
the clients. The consumers and the costs. Production for the benefit of the
company. The impact of the logistics department within the companies is visible in
the degree of customer satisfaction, as well as in the fluidity of the internal
processes of tracking, production and transportation, if the correct efforts are made
that will finally be reflected in the cost. reduction.
That is why the advantages of reducing logistics costs can trigger the company to
be forced to increase its productivity, since it must be oriented more and more to
improve in a competitive way, this also applies to the improvement of the
management of the company by the company, so it does too. in the possibility of
expanding markets by accessing products and markets that, without the correct
export, are unattainable and end up in one of the best assets of companies: the
increase of their customers.
On the other hand, if you do not have control over the costs, you may incur high
operational risks, which entails political and economic risks for the company, as
well as "whiplash effects" that may interrupt the actual demand, and finally the
greatest danger that The organization's failure to protect itself from excessive costs
is that it has zero margin of error or reduced inventories to meet market needs.
As a conclusion, this is why strategies and international physical distribution should
be characterized by the ability of companies to generate support to internationalize
from their production or from their market, ensuring that their distribution line is not
interrupted and that a brand identity which is reflected in customer loyalty. Since in
the current business measurement is a competitive factor to generate profitability in
import operations always maintaining the quality of the product and the opportunity
in satisfying the need for which it was designed
https://bibliotecadigital.ccb.org.co/bitstream/handle/11520/11675/100000048.pdf