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MacDowell Corporation:
Canadian company that was established in 1967 in the Philippines. Mcdowell
Philippines was made up of 40% by the parent company and the rest belonged to
Filipino investors including Paul Cheng, with a 7% stake in the company.
Problematic:
Despite the fact that San Fabian had been the largest exclusive distributor for
Macdowell, on September 1, 1987, the new president of MC Philippines informed San
Fabian that the company was going to terminate the exclusivity agreement but Paul
was asked to Cheng that the company continued as a distributor but not exclusive.
- What should San Fabian do to reduce the impact of removing the exclusive
distribution?
This is a very important aspect because San Fabian's greatest policy is precisely its
exclusivity contract, removing this point in the exclusive distribution the company
would automatically lose its exclusivity policy and thus its image with respect to
customers would be in decline And if you set a precedent with a lot of impact with our
clients to whom we exclusively sell exclusively. Although it is true that due to the
refusal to distribute Macdowell products, there are no substitutes for their products
on the market, and due to the decrease in our sales, they would affect us strongly. In
any case, taking into account that Macdowell's sales are in many cases thanks to the
sales power of San Fabian, the idea would be to impose our service on Macdowell, not
to sell their products for a period of approximately one semester and thus negotiate a
new exclusivity contract. All of the above mentioned, in order to show a firm firm to
its policies, strengthening our image towards our suppliers. In addition to this,
something that would increase the company would be to continue strengthening its
sales force, this would be due to a specialization and technical training of the products
for its employees, especially new ones, and it would be done continuously. You could
also improve your strategies in the market, both with advertising and marketing to
improve the image of exclusive distributor.
- Under what conditions could both parties accept to have an exclusive distribution?
We think at this point, that in order to have an exclusive distribution, Macdowell
should now be part of all the tasks that San Fabian performed, in search of total equity
in which both companies would benefit. We break our ideas down into 3 key points to
better explain ourselves.
a) Macdowell now also participate in roles that only San Fabian had before, such as
transportation, product deliveries and advertising. Equity is sought total equity.
b) To avoid the same thing happening in the following years, a contract is created in
which there are clauses as well as short and long term, in order to benefit both
companies and avoid later inconveniences.
c) Lower prices on products, seeking to compensate for the services we provide to
customers, which is our differentiating factor.