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Why should beauty co put pressure on its manufacturers when the issue emanates from the Grey market products being cheaper?
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Hi there,
I am assuming you are referring to the following case: "Bain Case: BeautyCo – Where Did the Profits Go?"
My brief answer:
Let me clarify - Beauty Co should not put pressure on its manufactures. This is only one of the options that Beauty Co should identify and consider. There are large drawbacks to Beauty Co actually utilizing this option - e.g., could harm their own sales, or damage their PR / Reputation.
However, it is still a valid option to consider, especially if you can minimize the potential downsides. If we assume that Beauty Co has quite a large market share for instance - just notifying it's manufactures that they are not pleased with their current price or the practices of the manufacturers to sell to the grey market at a discount periodically - might be sufficient to eliminating the issue.
I hope this helps!
Sincerely,
Thor
