Assignment 1

1) PAD runs a high-margin business positioned at the luxury end of the market and
commands a significant premium for its items and for the Palate-Able Delights
experience. Should PAD absorb some incremental costs in exchange for added
security and opt to stay with traditional trade payment and financing systems?
Is a confirmed documentary letter of credit still the best option for PAD?
 PAD should opt for other financing method as well because adopting a single
traditional method will not attract more customers and in this competitive
market, where every second, market is changing with the technological
upgradation the company needs to open its arms for every payment system. It
would not be wrong to say that the company must comply with the “higher the

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risk more the profit” in order to be successful in its business extension and to

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reap profits they need to invest in the security system for the payments.

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 Yes, the confirm letter of credit is the best option to opt for as it provides
guarantee for the payments. The nature of PAD’s product, being likely to go bad

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quickly, means that both PAD and its customers face a unique risk which calls for a
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substantial level of importance place on transit insurance, such as that offered by
UPS capital. PAD’s high margins and in position in luxury, niche market, the cost of
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insurance is one that should be absorbed in exchange for the requisite security.
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This can suggest that differing payment system hence level of security costs which
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are warranted and PAD is attempting to determine its best suited methods of
payment and it is intrigued by non-traditional as well as online payment options
like PayPal.
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2) How well-suited is PayPal, or similar online payment solutions, to the PAD

business and model?
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 PayPal is a good platform that PAD can implement for the payment process of its
clients, that would be guarantee greater security of the transactional both to the
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company and to the clients that pay for their product, this would also contribute
to the company can keep track of transactions. Moreover, many banks now
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provide service of online banking from which online payment can be done or
received from anywhere in the world with end to end security which safe &
secure and encrypted. PAD just need to filer out the best option which can suit
the company. PAD can also look or contact UPS as UPS is already handling their
supply chain, UPS also finance small scale trade to expand their trade area but if

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 they go with UPS they might have limit their shipping contract to UPS only
whereas UPS is still not providing services to all parts of the world.

3) What is your recommendation to Palate-Able Delights?

 Palate-Able-Delights provides some kind of perishable foods which is not good to
eat after specific time period. PAD is planning to export this type of product
around the world which can take time to reach out customers so they should be
aware of the product life cycle which they are exporting. Moreover, before
exporting they should research transportation of that target market like how
much time it will take to deliver the product to the consumers. They should also
conduct surveys in different parts of the world regarding their products, for this
survey they can identified potential target market and from which target market

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they will be able to pull out more profit as profit is the main factor for running the

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business which they have to keep in their mind all the time. Moreover, PAD is a

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niche retailer and therefore they have to choose a kind of method which can be

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efficient as well as secure and effective. Also, for the export of this products they
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have to set up for the virtual payment method and they have to choose fast &
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secure payment method so that their supply chain does not get interrupted.
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