US-based manufacturer of premium musical instruments
To reverse slumping e-commerce sales, the company was considering adding a distribution and assembly facility in Europe to be able to offer lower prices and faster shipping.
Assess the opportunity to increase sales in Europe by:
- Streamlining the supply chain
- Receiving and assembling parts closer to European clients
- Maintaining premium brand status and margins
With no international manufacturing or distribution facilities, the company was passing on the shipping and import cost to its European customers —- which made them less competitive with local businesses.
A customer survey indicated that lower prices would be the best way to service the European market, but the company needed additional European sales in order to justify supplying customers directly in market.
The leadership team needed to know a few things before developing its global expansion strategy:
- Would streamlining the supply chain result in higher sales?
- Was investment in European expansion the only solution?
Turning up the volume on international sales
In addition to these challenges, the company faced other hurdles.
- A strong U.S. dollar
- Customer uncertainty on landed costs
- Limited European language and marketing programs
The company previously had proven it could increase international sales through a customer loyalty program, but in this case, it was limited by its supply chain. By streamlining its supply chain to enable receiving and assembling closer to European clients, company leaders believed they could offer faster, two-day shipping and lower prices by reducing fully landed pricing and shipping fees.