dspp wrote:One of my key suppliers in my dayjob had a business that a few years ago was 95% exposed to tobacco. They were a tier 1 supplier to the big tobacco companies. Over the last 5-years they have aggressively restructured their business to reduce their tobacco exposure to 50%, whilst remaining a tier 1 supplier to tobacco. They did that by aggressively growing their non-tobacco business. Make of that what you will.
regards, dspp
Low growth business, dominated by a few large and powerful customers much bigger than their suppliers, who see their route to profit growth in squeezing costs out of their supply chain.
Seems an obvious move for a Tier 1 supplier to diversify (unless you can establish such differentiation that you can re-establish the power balance between you and your customer).
How would you feel if 95% of your business was to TESCO? Same response likely