Jebsen and Jessen SEA: Dealing with the Unkindest Cut

The case describes the problem faced by Jebsen & Jessen, South East Asia (J&J SEA), when a long-time supplier from Europe decides to take back the distribution rights for the region and distribute their products directly to their customers. J&J therefore needs to look for other suppliers of forklift trucks. It can either revert to potential European clients or move with the times and leverage on cheaper Chinese suppliers coming into the market.

The objective of the case is to help students understand the challenges of a distribution business, particularly in a diverse market like ASEAN, and the lessons learnt about picking the right type of supplier to represent. The case highlights the uneasy balance of having a well-known name to represent that is easier to sell to end-customers, and the lower bargaining power that the distributor has. It points out how an enterprising company can move up the value chain from doing purely distribution alone, to manufacturing and engineering. It also shows how it is possible to turn a problem – like the entry of cheaper Chinese competitors – into an advantage.