Bolster Electronics: Dealing with Dealer Demands Case Solution

Hence, should Bolster convince the management of Vickers that the current arrangement of exclusive dealership in northern Alberta will suffice? Or they should evaluate the future relationship and conclude that Vickers become a territorial distributor? If this is so, Vickers would become the third distributor for Bolster, where its first two distributors are classified as national distributors. Moreover, the decision also has to be made regarding the future relationship of Bolster with its two current national distributors. If a distributorship arrangement is provided to Vickers, how will Rob Jackson continue the relationship and partnering arrangement with National and Albright?

The future relationship with both National and Albright is significant for Bolster as it enjoys the distinction of being primary line with both of their national distributors. It is not likely that the two national distributors will give the same preferential treatment to Bolster if it was to bring in another exclusive distributor in the process.

2. What issues does Rob Jackson need to consider in making these decisions?

Firstly, the financial impact of the decision has to be considered. That is, how much benefit can Bolster Electronics derive if Vickers was made a territorial distributor for the company in northern Alberta. The assurances provided by Vickers for increased sales and market share for Bolster’s surveillance equipment need to be penned down. Secondly, will it be a win-win situation for both Bolster and Vickers, or most of the benefits go to Vickers. It also needs to be considered that if a distributorship was permitted to Vickers, it might become too powerful and dominating to dictate its terms. It may also then be in a position to challenge the authority and exclusivity of National and Albright.

Moreover, the management of Bolster Electronics is not currently convinced about Vickers’ request. The management of the organization is content with its current relationship and partnering with Vickers. Hence, the willingness and acceptability of all senior management needs to be considered by Rob Jackson. The company also needs to take into account its future expansion plans. That is, which areas of Canada and further in the United States the company wants to target its sales. Currently, the sales in the United States are all through distributors.

Bolster Electronics also has technical support staff that assists the end-consumer with any issues related to surveillance equipment. Their role in the case of a renewed relationship with Vickers also has to be kept in mind. How much will be their role for support servicing if Vickers becomes a territorial distributor for Bolster Electronics?

3. What alternatives does he have?

In the given situation as presented in the case, Rob Jackson has the following alternatives: provide territorial distributorship to Vickers, continue with Vickers as an exclusive dealer but offer discounts and margins similar to a distributor, and lastly, offer exclusive distributorship of United States to Vickers.

While suggesting these alternatives, the important customers of Bolster should be kept in mind. The two primary customers are those requiring remote monitoring in outdoor locations and those requiring automated process monitoring in their manufacturing facilities. The role of the technical staff will continue and service levels will have to be elevated no matter that alternative Rob Jackson chooses.

The first alternative, providing territorial distributorship to Vickers, is what the dealer has been looking forward to. Territorial distributorship shall make Vickers the third distributor in the history of Bolster Electronics and encourage Vickers to work harder on Bolster’s accounts. It is also likely that a stronger relationship would develop between the company’s technical sales staff and Vickers.

The second alternative, offering discounts and margins similar to a distributor, would be a strong position for Bolster Electronics. This is because they will be able to convince Vickers to continue as an exclusive dealer and not have to change the orientation of their relationship. However, Vickers will then have to be attracted through better margins as compared to other dealership arrangements. Lastly, the company can suggest an altogether different approach to Vickers and offer them a strong position in another region, that is, the United States. Currently, the company handles its United States sales through a network of twelve dealers. It can offer the exclusive distributorship to Vickers and help the company expand in the United States.

4. What might happen as a result of each of the alternatives?

The first alternative is quite clear that Vickers wants a distributor’s account with Bolster Electronics. The company, Bolster, is headquartered in Waterloo, Ontario. With its primary presence in Canada, the company has been looking forward to expand its operations in the United States. Hence, the first alternative relating to providing distributorship would make Vickers extremely happy as this will be a perfect situation for them. This also means that Bolster Electronics will have to provide training to the staff of Vickers on its future conduct and increased responsibility levels.

Furthermore, such an arrangement with Vickers will displease the existing national distributors: Albright and National. Hence, the current relationship of Bolster Electronics with the distributors may jeopardize as a result of the new business partner. However, the benefits to Bolster may overcome the damages it would have with its existing national distributors.

The second alternative would be another expensive outlet to Bolster’s management. While Vickers will be encouraged to continue operating as a dealer in northern Alberta, it will be offered greater margins in its business relationship. This would require a useful cost-benefit analysis to be performed by Bolster’s management. How motivated will be Vickers if it is offered increasing discounts and margins in its sales arrangement?

Lastly, the alternative of offering exclusive distributorship for the United States is a more long-term venture. While Vickers may agree with the proposal, it would need to put in place a lot of infrastructural facilities to cope up with the requirement. Vickers would feel that it is being given a special treatment by the vendor, that is, Bolster Electronics. However, such a decision may be in the best interests of Bolster to expand and strengthen its business in the United States.