Adchem's Approach to Selling Clebal in Guatemala

Topics: Proposal, Proposals, Revenue Pages: 2 (578 words) Published: August 30, 2011

Following a review of the newspaper article, our recent law suit and events over the last one year concerning the sale of Clebal™ into Guatemala please find below my proposal, rationale for the proposal and proposed implementation plan: PROPOSAL

A. Our organization should consider adding mustard oil to Clebal™ even though this might result in an initial drop in sales because of the increased cost of manufacture However, in the long term, this is a significantly lower cost compared to the potential long term revenue loss resulting from poor consumer confidence owing to negative press and eventual costs from legal claims for wrongful death – both of which could be reduced by the modification of the constituents of Clebal™ with mustard oil. B.No changes be made to the direct sales method of distribution in Guatemala. RATIONALE

By adding mustard oil to Clebal™ will avoid violations of consumers trust and legal liability for deaths caused by the use of Clebal™. I estimate that, by adding mustard oil to Clebal™ there could be a drop in sales due to a reduction in the effectiveness of Clebal™ (30% weaker), Moreover, eventual revenue from the sales of Clebal™ could well be reduced and production costs increased, in amounts difficult to estimate, as shoe manufacturers may look for substitute adhesives to Clebal™ and competitors may gain market share due to the change. However, in spite of the aforementioned disadvantages, I propose that AdChem should still consider adding mustard oil to Clebal™ because risking the lives of an estimated 5,000 children in Guatemala with a known toxic toluene based adhesive (Clebal™) could undermine AdChem’s reputation with all customers for an indefinite period not just for Clebal™ but for all AdChem branded products. There is also the potential cost of legal claims from at least some of the estimated 5000 Guatemalan children...
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