Weikang Pharmaceutical Co., Ltd.: Channel Management Dilemma
(6 pages of text)
In spring 2012, the issue of trans-boundary sales arose for China’s Weikang Pharmaceutical Co., Ltd. (Weikang). Sales of the company’s products were allocated to distributors in different regions, with each distributor enjoying a monopoly within that region. However, issues had been arising with such a rigid demarcation of sales territory. One question was whether introducing competition between sales agents would lead to higher sales, or whether regional teams could co-operate and share best practices. The sales director of Weikang pondered a conflict between two distributors that had aroused great controversy. With each party sticking to its own view, the conflict seemed intractable, and now distributors from different regions were looking for a reasonable solution. It was time for a meeting to discuss the company’s channel management. Faced with such a great difficulty as a cross-border operation, how should the company proceed?
This case is suited for courses in trans-boundary sales at the MBA or undergraduate level. It is intended to help students learn about specific aspects of the Chinese business landscape. After completion of this case, students will be able to
- describe cross-border operations and trans-boundary sales in the Chinese market and their effects on the companies involved;
- define the differences in the effects on enterprises of trans-boundary sales for different types of products and of cross-border operations in different types of markets; and
- draw a comparison of solutions to cross-border operations and trans-boundary sales.
China, Large, 2012
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