3.

0 CAUSES OF THE PROBLEM

CASE A

Issue 1: Lack of efficiency in the traditional FMCG trade channel

Basically, traditional trade, modern trade, and e-commerce trade were the distribution

channels stated in the case. Originally, WinChannel concentrated on traditional trade as it

maintained as the biggest in the China’s retail industry in generating the revenue. However,

they intend to launch a modern trade distribution channel as well as implementing digital

technologies to rural regions since there are various flaws in this traditional trade channel.

Typically, FMCG companies utilized their own marketing channels to approach

mom-and-pop stores to allocate their products through the traditional trade channel along

with distributors and wholesalers. Generally, these shops are located in underdeveloped cities

and suburbs whereas these types of stores keep some supplies on hand which leads to a

reduced stock turnover. The inefficiency of traditional FMCG trade channel also comes from

the fact that it is more costly from usual price as it turns out that intermediaries would make a

profit for themselves through using profit margin approach. This is due to the fact that the

process of distributing the goods to the customers need to go through distributors and

wholesalers or mom-and-pop stores from FMCG companies.

Issue 2: The traditional trade channel is threatened by the large online e-commerce players.

Based on the case, the expansion of e-commerce platforms contributed into the

downfall of traditional trade channel as FMCG businesses are able to enter business-to-

consumer (B2C) platforms. Thus, the goods can be sold directly to customers without the

need of intermediaries. Moreover, e-commerce would benefit businesses by assisting in the

formation of brand identity and exposure in a more effective manner, particularly in less

developed rural areas in China.

Issue 3: The wide disparities in economic growth and income between China's urban, first-

tier cities and its underdeveloped rural regions

CASE B

Issue 1: To identify measures to persuade small-business owners to utilize Huixiadan's

mobile applications on a daily basis.

The primary concern in this case is whether the applications are designed to suit the

needs of the consumers. This issue would affect customers if the applications created do not

satisfy the expectations of the people. Furthermore, if the applications are not fascinating, or

complicated to use, they may grow bored in using them. As a result, the firm may need to

improve or create an intriguing application for its clients or consumers to feel satisfied using

that application. People preferred to use user-friendly application since it makes searching for

anything easier and consumes less effort.

Issue 2: The competition in B2B environment is fierce and complicated whey Huixidian first

joined the market.

The capability of Huixiadan to acquire customer trust in their services and survive in

these challenging platforms is quite hard to predict since Alibaba is a strong B2B online

platform that can link people all over the world and has been a trusted platform for a long

time. It may be difficult for Huixiadan to thrive with firms that have been in these channels

for a long time, such as JD.com and Alibaba, because they obviously have more knowhow in

this platforms.