While generalizations are not always ideal, it is common to hear in many countries, including my own, Honduras—at least in most cases—that the perception of "healthy eating being expensive" prevails. This idea is often linked to food products, as it is said that "organic" and natural foods tend to be more expensive than processed ones. However, attributing this phenomenon to a single cause would be overly simplistic, as the sector faces various complex challenges.
One aspect that stands out is the structure of the distribution chain, as discussed in the previous article. In this system, the producer, who bears most of the risks (from weather conditions to production costs), often receives the least economic return compared to other links in the chain. Although this situation is not an absolute truth, it remains a constant in many cases.
Interestingly, without delving into the complex situations and challenges that arise, the term used is telling: the distribution chain, which clearly consists of links. According to the Diccionario de la lengua española (n.d.), a link is "an element necessary for the connection of actions, events, etc." At first glance, it might be interpreted that a particular "loyalty" among the parties in a distribution chain is somewhat akin to an "all or nothing" scenario. However, this is not the case. In markets, there is a need to outperform competitors, that is, famous competitiveness, so there is little or no loyalty among the parties involved in producing a product or service.
And let's be clear: We, the customers, are not guilt-free either. In most cases, we are the most unfaithful. How many times have we switched a brand for a cheaper one or one that "gives more for less"? As the saying goes, "You don't live on love," and even less so in business.
Returning to the distribution chain and stepping into the shoes of the links, loyalty towards a single agent becomes complex. According to Michael Porter's theory, a business must perform a retrospective and constant analysis of its competitiveness to solve problems or face situations and thus become better. One way to achieve this is by considering "the five forces," which are:
- The threat of new entrants.
- The rivalry among existing competitors.
- The threat of substitute products or services.
- The bargaining power of suppliers.
- The bargaining power of customers.
(Santander, 2024)
THE STATIONERY STORE AND I
Of these five forces, the last two are particularly relevant. The bargaining power of suppliers reflects the dependency a business may have on its suppliers.
Imagine living in a small town a few hours away from the city and owning a stationery store with everything you need and a bit more in inventory.
Since it takes eight hours to get to your town, you work with a single supplier willing to make a monthly trip to stock your store. This means you must have impeccable planning and inventory management.
What does this imply? Having a single supplier forces you to adapt to their delivery times and costs. For example, they might sell you a pencil for one dollar today and three dollars tomorrow. In this case, you have two options: buy or not buy. But if that pencil is a product that your customers frequently look for, responding with a "no stock" could be detrimental.
Several measures can be taken to mitigate these risks, such as increasing the number of suppliers, creating long-term partnerships, or even manufacturing the raw material directly.
After years of being the only stationery store in the area, two competitors arrive, meaning there are now three stationery stores offering practically the same products to the same customers. Here, you need to strive to regain the "bargaining power of the customer" by highlighting why customers should choose you over the other two stores. Of course, the others will do the same. Strategies such as promotions, loyalty rewards, and exclusive or premium products, among others, come into play to win over the customer.
TWO EARS AND ONE MOUTH?
The above is an overly simplified view of everything that happens in markets, in different theories, and how these are applied to reality.
However, the aim is to better understand why things happen. Often, we hastily point fingers at culprits without thoroughly examining the bigger picture. Unfortunately, many of these situations turn into "problems for tomorrow," but that tomorrow never comes, and as is customary in our species, we end up settling.
Therefore, this section does not seek to assign blame but to present a broader perspective so that we can be both judge and part, using discernment and knowledge to make the best decision for ourselves and our environment.
Sabita Banerji's tea wisdom best explains it: "Listen carefully and understand what others are telling you." It doesn't matter if it contradicts our opinion; we can only grasp the bigger picture by listening attentively. As the saying goes, "We have two ears and one mouth: to speak less and listen more."
IS EVERYTHING LOST?
Is there nothing to be done? Should we just submit to injustices? Not at all. This topic only begins, but it is necessary to understand all versions to make informed decisions. Ultimately, we are judges, but we are also part of the situation. So, instead of pointing fingers, we must take action.
As we learn, grow, and improve, remember Mahatma Gandhi's words: "Your beliefs become your thoughts, your thoughts become your words, your words become your actions, your actions become your habits, your habits become your values, your values become your destiny."
Satoricha ~
References
Diccionario de la lengua española. (n.d.). eslabón | Definición | Diccionario de la lengua española | RAE - ASALE. Diccionario de la lengua española. Retrieved December 15, 2024, from https://dle.rae.es/eslab%C3%B3n
Santander. (2024, April 4). 5 fuerzas de Porter: cuáles son y para qué sirven. Becas Santander. Retrieved December 15, 2024, from https://www.santanderopenacademy.com/es/blog/5-fuerzas-de-porter.html
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