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It would diminish the flexibility to respond to the changes in the local Markets.
Financial benefits were highly uncertain.
The benefits are limited to the Top management, no benefits to the subsidiaries.
The future role of the subsidiaries would diminish.
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Enschede may not have capabilities to prove the level of services their customers require across the whole
Europe.
Layoffs of the staff at Subsidies and decreased responsibilities of the managers.
Implications:
This variation in the composition of European customers demands more flexibility and changes in the Polaroids
product. The apprehensions of most of the General Managers were largely based on this very fact that Centralized
distribution system would diminish flexibility of the variations in the European Markets.
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Recommendations:
They should go with the mixing up of different strategies and plans for initial period on trail basis in order to
access the which strategy would be more useful keeping in view the market dynamics of European markets and
after then they should decide what option should be implemented on long term basis.
Action Plan
Should it implement direct distribution strategy or not:
There are the strong arguments in favor the implementation of direct distribution strategy. Various studies have
presented some of the major benefits of the strategy which are given below.
Post integration traveling Cost saving from 5-25%
Reduction in inventory handing cost which is up to 9% of the value of inventory. It will reduce 75 % of the
local inventory.
Improving in cash flows, annual saving would be around $ 5.7 Million. Etc,
Theoretically, Polaroid possesses sufficient experience of working with Integrated Distribution system such as in
US and also the already operational International Distribution Service Center (IDSC) at Enschede are the basic
example in this regard. As IDSC also serves many international subsidiaries as well as distributors in the countries
in which Polaroid did not have subsidiary. Thus, it may be said that Polaroid had the enough experience of
Consolidated Distribution system. And launching the same in the Europe would surely be a success.
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Exhibit-1
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