Question

A local supermarket would like to introduce its own brand of paper goods (e.g. paper towels, facial tissue, etc) to sell alongside its current inventory. The company has hired you to generate a report outlining the advantages and disadvantages of doing so. Prepare a one slide PowerPoint that lists the advantages and disadvantages.

Answer 1

This type of business is expanding the product line where the company introduces a new product in its existing business. The advantages of the same are:

- achieving economies of scale as growth in business will help in reducing per unit cost and increasing production output by saving in manufacturing, marketing and overheads.

- increase in resources and the stock will help increase production levels.

- increase in sales will bring in more profits

- new customers will be attracted to the new product

- market price will be influenced

- external risks can be reduced.

- the company will be more viable to other stakeholders

The disadvantages of this expansion can be :

- expansion costs can be more

- comprise with the existing quality

- management and operations control issues

- the new business will require additional capital for expansion.

- requires more motivation and dedication from staff.

- risk of new customers not being attracted.

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Answer 2

PowerPoint Slide: Advantages and Disadvantages of Introducing a Supermarket Brand of Paper Goods :

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Supermarket Brand Paper Goods: Pros and Cons 

Advantages:
  Higher Profit Margins – Store brands typically yield better margins than national                                             brands.
  Customer Loyalty – Encourages repeat purchases as customers associate the                                              brand with the supermarket.
  Price Competitiveness – Lower pricing attracts budget-conscious shoppers.
  Inventory Control – Flexibility in sourcing, production, and supply chain                                                     management.
  Differentiation – Stands out from competitors by offering exclusive products.

Disadvantages:
  Initial Costs – Requires investment in branding, packaging, and marketing.
  Perceived Quality – Some customers may prefer established national brands.
  Supplier Dependence – Reliance on third-party manufacturers may affect                                                         consistency.
  Shelf Space Conflict – May compete with existing brands, requiring careful                                                    placement.

 Conclusion: A balanced approach can maximize benefits while mitigating risks.