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A. Selection Criteria
Category 1: Shortlisting criteria Product Kept: The products kept form important criteria. The party should have experience in handling consumer durable or technology products. The product kept should not be of the nature of day to day consumption by customer and should involve some investment on behalf of customer. Gupta Sons (Eveready Batteries) and Laxmi Enterprise (Airtel) satisfy shortlisting criteria. Laxmi Enterprise seems to have better standing as it is selling a complementary product. Pyarelal and sons plays mainly in commodity products and is best kept out of this business Category 2: Essential Criteria Investment capacity: The distributor should have moderate investment capacity as he will be holding the stock on behalf of ABCL and will also be managing operations in entire Harora subdistrict Span of Control: Good Relationship management and excellent reach in whole subdistrict are important. Category 3: Situational Criteria Storage space: Should have his own storage space. (20ft x 15 ft x 10 ft) Location: The location of the distributor should present easy access to the dealers, preferably in the main bazaar of the town.
Infrastructure: The distributor should have right number of own vehicles. However large number of Attitude: The distributor should be go vehicles do not necessarily present getting and should have commitment good governance. to principal. Capability: The service record of the Reliability: As the company will be distributor should be good. The sales making considerable investment in of low price product in the villages developing the market and channel. depends on the availability of the The distributor should be reliable as product. far as commitments and finance are Sales force: The channel partner concerned. should have sizable sales force. Financial Strength: The distributor Again excessive number of sales should be financially strong as he is people will bring down the required to make considerable efficiency. Whether a manager is investment in the inventory of required from distributors end to manage the mobile business alone is handsets. a question. Almost all the distributors more or less seem to satisfy essential criteria, Almost all of the distributors count as all of them have good financial same on Infrastructure, storage space, location and sales force. backing, control and attitude. However Gupta sons seems to incapable of provide the required level of service to the business.
Buyers needs
Retailers Needs
Reach
C. Due Diligence:
The final selection of a dealer is made after analysing various factors. It can be done on the basis of the following framework.
a. Gupta S.No. Information Source of Information Rating Who carried it out Who has approved it
Financial Information
Bank Healthy cash flow for last 3 years No history of cheque bounce for last six months Income tax/Sales Tax Turnover- 1.6 Cr
Legal information Commercial Information Physical evidence Large go-down cum office space in his house A team of 6 people two delivery vehicle Owner Will not overstock and be under pressure to sale Will do only replenishment job Will work hard Will provide all support in market expansion and servicing. 6
Reputational information
years For Levers, Proper beat plans for salesman and delivery vehicles For Eveready, no systematic plan
b. Laxmi enterprise S.No. Information Source of Information Rating (1 to 7) Who carried it out Who has approved it
Financial Information
Legal information Commercial Information Physical evidence Go-down cum office in house in the main bazar of the city Single delivery vehicle A team of 6 people Owner Will not overstock and be under pressure to sale Will do only replenishment job Will work hard Will provide all support in market 6
expansion and servicing. 4 Reputational information Dealers Personally dealing in case of any disputes Proper beat plans for salesman and delivery vehicles 6
c. Pyarelal and Sons S.No. Information Source of Information Rating Who carried it out Who has approved it
Financial Information
Bank Healthy cash flow for last 3 years No history of cheque bounce for last six months Income tax/Sale tax Business turnover- 11.2 Cr
Legal information Commercial Information Physical evidence Large go-down cum office space in his house A team of 20 people Six delivery vehicle Owner6
Will not overstock and be under pressure to sale Will do only replenishment job Will work hard Will provide all support in market expansion and servicing. 4 Reputational information Natives Most reputed business house Political background Self Can ensure a huge turnover and deep market penetration due to because of good relations with dealers Exclusive work force and manager for mobile business 4
D. Conclusion On the basis of due diligence criteria, we find that Laxmi enterprise is the right partner to go ahead with. Laxmi has overall excellent performance in financial, commercial and reputational front.