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CASE 26 American Furniture Warehouse Sources Globally
Synopsis: Show how retailers can reflect and respond to values expressed by their
consumer base through the merchandise they buy. Enumerate ways that the
Uses:
Chapter 5: Retail Market Strategy
Chapter: 12 Buying Merchandise
Discussion Questions
1. Factories in many developing nations have lower cost structures, but that is often
attributable to fewer benefits and lower wages for workers. What are the ethical trade-
offs for retailers and shoppers when merchandise is sourced from countries in which
labor practices fall short of standards Americans deem acceptable? Do shoppers really
care about workers halfway across the globe, or are they more concerned about how
many dollars are flowing out of their own pockets?
Ethical trade-offs include:
Sending jobs and business to another country
2. The world is our marketplace. AFW employs global sourcing, uses many negotiating
tactics, and shifts channel tasks to keep its costs as low as possible. Enumerate the tactics
AFW uses to keep its prices low. What other strategies and tactics could a furniture retailer
use to hold the line on retail prices?
Tactics AFW uses to keep prices low:
No highly paid executives
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Other tactics:
Recycling and reselling of Styrofoam and other recyclables
3. What criteria should AFW use when deciding whether to see a new vendor? How might it
apply some of its best practices with its biggest vendors to new, smaller vendors? What
strategies or innovations could it employ to stretch the productivity of its buying staff?
Criteria for seeing a new vendor:
The vendor appears to offer merchandise that suits their target market its taste level,
design aesthetic, price point, etc.
How to replicate best practices with large vendors to smaller vendors:
Use technology to its best advantage to communicate with and share information with
vendor partners.
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