When Customer Demands Hurt Channel Relationships
Case number:
A11-06-0017
Abstract
Wal-Mart wants PowerAde delivered direct to its warehouses. A seemingly innocuous request, given that PowerAde is a relatively minor brand for Coca-Cola. But in complying, Coca-Cola is taking the first step in changing the direct-store-delivery model used by its distributors for over a hundred years. And Coca-Cola’s smaller distributors aren’t buying it; 55 bottlers have joined ranks to sue Coca-Cola and Coca-Cola Enterprises (CCE), Coke’s largest distributor, to stop warehouse delivery.
Teaching
The case can be used as an example of power in action: Wal-Mart wants efficiencies in product delivery. Coke wants better control over its bottlers. Distributors want Cake to adhere to their long-standing contractual relationship. All three will not be satisfied. So understanding the implications of warehouse delivery of PowerAde becomes critical for all relationship.
Case number:
A11-06-0017
Subject:
Operations Management
Year:
Setting:
U.S.
Length:
4 pages
Source:
Library