BOLSTER ELECTRONICS: DEALING WITH

DEALER DEMANDS

CASE SUMMARY
This Case is all belongs to the industrial conflict, Bolster was one of the largest
suppliers of state of the art industrial video equipment for harsh environments, in
Canada. Industrial video equipment was often used for external security
purposes, but it was also useful for many other applications such as monitoring
equipment production while operating. The Bolster product line included video
cameras and all related equipment to provide complete video surveillance
systems for companies that required video surveillance and monitoring in harsh
environments.

ANALYSIS
Vickers Industrial Supplies (Vickers) has gone to Bolster asking for a discounted
price related to the distribution. He is a fast-growing retailer, aspiring to the
dominance of Bolster products in northern Alberta. Its performance in
northern Alberta has been a key factor in Bolster's products recording ten
times the volume of sales volume over the past five years. This has led to
northern Alberta becoming the highest market share district in Bolster. It is
also a very different Bolster dealer as it directly receives offers from the
company. It has a team of highly trained traders who are assisted by Bolster to
develop it. It maintains a stock of goods compared to distributors' operations
and has a marketing power that will sell to local retailers and end users. All of
this has led to specialized customer service and excellent customer
relationships, which are important decisions for marketing in a sensitive
electronics market.

The market in the oil sands of Fort McMurray is growing rapidly and it is
important for Bolster to have a cold presence there, in order to gain market
strength. while the latter have shown little interest despite repeated requests.
National warehouse is located south of Alberta making it even more difficult to
find their products in the northern part of the province.

Equipment needs to be used in a harsh environment that requires good

reliability and continuous high performance whenever needed. Therefore,
customers value the team’s design skills and service support in the same way
as the equipment itself. In the event of a Vickers incompatibility, it may be able
to move to another competitor on the same customer base that provides the
same service support. Competition in the market has been on the rise and it is
becoming increasingly difficult to maintain a 40% margin. Losing a business
competitor in the current situation could be very detrimental to the current
market situation and future prospects in the region.

The introduction of a new distributor in the past has drawn National criticism
for the perceived increase in competition in the sale of Bolster products.
Anxiety was eased after that when it emerged that there was no direct conflict
between the two distributors. A similar volatile situation is likely to occur as
the National manages to sell in the southern region of Alberta and there may
be a perceived threat that Vickers is hijacking a market in Alberta. Therefore, it
is important that national interests are remembered as we are responsible for
most of the marketing and product development activities of our products
across the country. Both companies have been enjoying a symbiotic
relationship from the beginning. Being a big player in their domains,
organization is very important for them to make a living. There is also the
possibility that the National may reduce Bolster to second place and reduce
involvement in pushing for the sale of their product. Therefore, it is important
that the National be taken seriously before any decision is made. Otherwise,
Albright annoyance is not possible because it does not work in this region.

Granting distribution rights to a seller may also set an example for other sellers
to request similar favors. This can lead to a problem in the future. However,
the chances of some vendors having storage facilities and the ability to support
the service are less likely to get products from the distributor and at the
moment, Bolster does not support any of them with video system engineer
technology.
There will be a reduction in Bolster jeans if it offers Vickers a lower price.
However, in return, Vickers could be directed to offer discounts to end users
and increase market share. This will offset temporary losses to the margins,
leading to an increase in total revenue over time. Revenue may increase as the
market share rises to 90% from the current 75%.

Questions for discussion?

1. Briefly describe the problem highlighted in this case.

PROBLEM STATEMENT
Vickers has approached Bolster requesting for a distributor pricing discount but
the potential conflict of interests with the national distributors is leading to a
problem in arriving at a decision.
The problem statement refers to a brief description of issues that need to be
addressed. It identifies problems or gaps between the current and the desired type
of organization, and thus needs to be addressed so that management can look for
change.

This whole case is on Horizontal Conflict.