Bolster Electronics: Dealing with Dealer Demands
(5 pages of text)
Case (Gen Exp)
This B2B case describes a common situation that arises when channel partners gain success and the perceived balance of power shifts from the supplier to the channel. The manager for Bolster Electronics, one of the largest suppliers in Canada of state-of-the-art industrial video equipment for harsh environments, must consider a request from Vickers Industrial Supplies, a regional dealer, to be upgraded from a dealership to a distributor. Vickers was generating a growing business volume for Bolster in an important market segment, the Canadian oil sands in northern Alberta. Approving Vickers’ request will generate slimmer margins for the manufacturer, which may be made up with higher projected volume, if the projections are reasonable. The potential reaction of the company's national distributors is causing concern. Although Bolster sells to regional dealerships in the United States, its policy is to distribute its products in Canada through two national distributors, and it fears that increasing Vickers’ role will alienate these distributors. Each alternative has benefits and risks.
- To explore channel behaviour, channel conflict and the variance between company policy and company actions.
- To examine the concepts of bargaining power in the channel, functions of a channel and the evolving nature of channel dynamics.
- To develop an understanding of making channel decisions within the framework of a strategy and company policy and to appreciate the financial impact of these decisions and the potential reactions of other stakeholders affected by them.
Canada, Medium, 2012
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