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Monday, March 25, 2019

Brexit Supply Chain Collapse: What Should Sarah Do?

Sarah Carruthers was fit to be tied. She watched with horror the way that the members of the British government argued and debated with each other, but were unable to come up with a plan to harmonize with the European Union. That mean that all imports and exports from the European Union would hit a wall of red tape, not only tariffs but of documentation, which could amount to, in some cases, upwards of a hundred documents required for a single export into the European Union.

"Don't worry! We're going to replace the European Union market with our old standby, the Commonwealth!" crowed a 20-something Brexit-er on his YouTube channel.

Sarah watched him with mounting animus. "I hope you get deplatformed!" she glowered to herself.

She thought of her own business. She had a small restaurant in the cathedral town of Bury St. Edmunds and she catered to Londoners who liked to go to farmer's markets on the weekends, and also to walk through some of Britain's most historic reaches, where assiduous treasure hunters had found hoards of Roman silver, Anglo-Saxon cloisonne and intricate braid-patterned knife hilts, hidden Catholic abbey chalices during Henry VIII's rampages, and then Georgian and Victorian knick-knacks. There were walking and biking paths, and it was altogether a historical gold mine.

"I should expand into a boutique hotel," she told herself. But with the impending Brexit shock, Londoners were scared. They were not in a mood to explore history, charming walks in nature, and fascinating churchyards immortalized by novelists and poets.

Sarah went into survival mode.

1.  She looked at what it would take to keep up her sales to Germany and France of English Shortbread and Peter Rabbit Chocolates. Most of her sales were around Easter and Christmas. Perhaps she could work with a broker.  At least she understood the anatomy of the demand.

2.  She looked at how complicated it would be to import the packaging, and other elements she used to create her hand-crafted shortbread cookies and chocolate rabbits.

Then, Phase II. She looked at how she could replace lost sales to the Commonwealth. Here were her first thoughts.  The biggest markets in the Commonwealth were India, Australia, New Zealand, Pakistan, Bangladesh, and South Africa.

1.  Peter Rabbit chocolates for Easter.  Sarah had to smile (albeit through tears) at this one. Easter?  in India? Pakistan? Peter Rabbit may seem exotic, but it's not going to capture the Hindi, Muslim, or Buddhist populations.

2.  Christmas shortbread. Same problem as Peter Rabbit in South Asia.

3.  There's always Australia, South Africa, and New Zealand, right??  Sarah's heart sank. They celebrated Easter and Christmas, but the seasons were opposite, and she did not know how chocolates and shortcake were viewed.  Plus, there was the distance, and the costs of transportation.

Also, there were complications with logistics: transportation, warehousing..

And, there was the pesky issue of brand recognition and marketing -- Sarah's products were well-known in France and Germany, and, thanks to quirky and cute advertising, their jingles were a part of the culture at large.  With the Commonwealth, they'd be starting from ZERO.

Challenge: You've been hired to give Sarah advice. What should she do to keep her sales high and profitable?

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