mall customers have to find the basic franchise or enhanced distributor

franchise to fulfill their needs, they value spatial convenience, loyalty

and searching time high but with the new policy they can’t get the desired
service outputs. There may be possibility the basic or enhanced distributor
franchise may not be present in their territory then instead of going for
Atlas compressors customer can move toward its competitors.
Customers don’t have option for one stop shop. Some customers want to buy
big and small compressors at a same time but with new policy they can’t do
this. For big ones they have to visit another distributor and for small
they have to visit another. Same is the case with spare parts and different
services. Like Polaroid and Monsanto they purchase big and small
compressors but with new policy they have to visit another distributor.

 For warranty and post warranty services customers have to go to authorized

service centre which will be a new thing for customers and what if the
authorized service centre is not in their territory where as previously
distributor was sufficient to provide warrant and post warranty services.

Q4:-
Atlas-Copco was having sales of $50 Million for its industrial compressor
business from which $37 million was coming from its distributors.
Distributors of Atlas worked very well and let Atlas to capture market
share. Now Atlas comes up with new four-level franchising policy as a
result of distributors’ audit and development program.
During the start of Atlas-Copco’s operations in USA, its distributors had
shown the level of trust and commitment. The success of Atlas-Copco is not
only by its sales team but with the collective collaboration of its
distributors. The new four-level franchising policy will lead Atlas-Copco
to failure.
Atlas-Copco is willing to form new relationship with its distributors by
adopting. In the past there was strategic alliance between both parties but
it was inclined towards more informal structure. From Phase 1 to Phase 4
Atlas-Copco was flexible in operations and distributors were happy too and
the success can be seen by viewing the growth of Atlas’s market share. If
Atlas implements the four-level franchising policy then it will cause
conflicts between both the parties.
Distributors are not ready and not expecting from Atlas to become so
formal. Atlas-Copco will show its opportunistic behavior by adopting four-
level franchising policy which will bring the element of uncertainty and
propensity to leave for distributors.
If four-level policy applied then Distributors  have to follow a path in
order to sell the big compressors; they have to move from 1 st level to
3rd level, then what about those distributors who are all ready selling the
big compressors? They again have to start from the scratch and it will take
their plenty of time, their existing customers will also have to wait for
somebody to serve them. The implementation process will take a lot of time
for distributors to move up and during that time frame the competitors can
take the lead.

IMPACTS OF FOUR-LEVEL FRANCHISING POLICY ON ATLAS-COPCO

BEFORE IMPLEMENTATION AFTER IMPLEMENTATION
Satisfied Channel Dissatisfied Channel
Members (Distributors) members (Distributors)
Informal strategic Alliance (Full Formal Strategic Alliance (Absence
of commitment & Trust) of Commitment & Trust)
Satisfied Customers (Sufficient Dissatisfied
Service Output) Customers( Insufficient Service
Output)
Growing Market Share Growth not Guaranteed
Lesser threat from channel members Chances of channel members to drop
for switch ATLAS

Q5:-
mall customers have to find the basic franchise or enhanced distributor
franchise to fulfill their needs, they value spatial convenience, loyalty
and searching time high but with the new policy they can’t get the desired
service outputs. There may be possibility the basic or enhanced distributor
franchise may not be present in their territory then instead of going for
Atlas compressors customer can move toward its competitors.
Customers don’t have option for one stop shop. Some customers want to buy
big and small compressors at a same time but with new policy they can’t do
this. For big ones they have to visit another distributor and for small
they have to visit another. Same is the case with spare parts and different
services. Like Polaroid and Monsanto they purchase big and small
compressors but with new policy they have to visit another distributor.
 For warranty and post warranty services customers have to go to authorized
service centre which will be a new thing for customers and what if the
authorized service centre is not in their territory where as previously
distributor was sufficient to provide warrant and post warranty services.

Q4:-
Atlas-Copco was having sales of $50 Million for its industrial compressor
business from which $37 million was coming from its distributors.
Distributors of Atlas worked very well and let Atlas to capture market
share. Now Atlas comes up with new four-level franchising policy as a
result of distributors’ audit and development program.
During the start of Atlas-Copco’s operations in USA, its distributors had
shown the level of trust and commitment. The success of Atlas-Copco is not
only by its sales team but with the collective collaboration of its
distributors. The new four-level franchising policy will lead Atlas-Copco
to failure.
Atlas-Copco is willing to form new relationship with its distributors by
adopting. In the past there was strategic alliance between both parties but
it was inclined towards more informal structure. From Phase 1 to Phase 4
Atlas-Copco was flexible in operations and distributors were happy too and
the success can be seen by viewing the growth of Atlas’s market share. If
Atlas implements the four-level franchising policy then it will cause
conflicts between both the parties.
Distributors are not ready and not expecting from Atlas to become so
formal. Atlas-Copco will show its opportunistic behavior by adopting four-
level franchising policy which will bring the element of uncertainty and
propensity to leave for distributors.
If four-level policy applied then Distributors  have to follow a path in
order to sell the big compressors; they have to move from 1 st level to
3rd level, then what about those distributors who are all ready selling the
big compressors? They again have to start from the scratch and it will take
their plenty of time, their existing customers will also have to wait for
somebody to serve them. The implementation process will take a lot of time
for distributors to move up and during that time frame the competitors can
take the lead.

IMPACTS OF FOUR-LEVEL FRANCHISING POLICY ON ATLAS-COPCO

BEFORE IMPLEMENTATION AFTER IMPLEMENTATION
Satisfied Channel Dissatisfied Channel
Members (Distributors) members (Distributors)
Informal strategic Alliance (Full Formal Strategic Alliance (Absence
of commitment & Trust) of Commitment & Trust)
Satisfied Customers (Sufficient Dissatisfied
Service Output) Customers( Insufficient Service
Output)
Growing Market Share Growth not Guaranteed
Lesser threat from channel members Chances of channel members to drop
for switch ATLAS

Q5:-
mall customers have to find the basic franchise or enhanced distributor
franchise to fulfill their needs, they value spatial convenience, loyalty
and searching time high but with the new policy they can’t get the desired
service outputs. There may be possibility the basic or enhanced distributor
franchise may not be present in their territory then instead of going for
Atlas compressors customer can move toward its competitors.
Customers don’t have option for one stop shop. Some customers want to buy
big and small compressors at a same time but with new policy they can’t do
this. For big ones they have to visit another distributor and for small
they have to visit another. Same is the case with spare parts and different
services. Like Polaroid and Monsanto they purchase big and small
compressors but with new policy they have to visit another distributor.

 For warranty and post warranty services customers have to go to authorized

service centre which will be a new thing for customers and what if the
authorized service centre is not in their territory where as previously
distributor was sufficient to provide warrant and post warranty services.
Q4:-
Atlas-Copco was having sales of $50 Million for its industrial compressor
business from which $37 million was coming from its distributors.
Distributors of Atlas worked very well and let Atlas to capture market
share. Now Atlas comes up with new four-level franchising policy as a
result of distributors’ audit and development program.
During the start of Atlas-Copco’s operations in USA, its distributors had
shown the level of trust and commitment. The success of Atlas-Copco is not
only by its sales team but with the collective collaboration of its
distributors. The new four-level franchising policy will lead Atlas-Copco
to failure.
Atlas-Copco is willing to form new relationship with its distributors by
adopting. In the past there was strategic alliance between both parties but
it was inclined towards more informal structure. From Phase 1 to Phase 4
Atlas-Copco was flexible in operations and distributors were happy too and
the success can be seen by viewing the growth of Atlas’s market share. If
Atlas implements the four-level franchising policy then it will cause
conflicts between both the parties.
Distributors are not ready and not expecting from Atlas to become so
formal. Atlas-Copco will show its opportunistic behavior by adopting four-
level franchising policy which will bring the element of uncertainty and
propensity to leave for distributors.
If four-level policy applied then Distributors  have to follow a path in
order to sell the big compressors; they have to move from 1 st level to
3rd level, then what about those distributors who are all ready selling the
big compressors? They again have to start from the scratch and it will take
their plenty of time, their existing customers will also have to wait for
somebody to serve them. The implementation process will take a lot of time
for distributors to move up and during that time frame the competitors can
take the lead.

IMPACTS OF FOUR-LEVEL FRANCHISING POLICY ON ATLAS-COPCO

BEFORE IMPLEMENTATION AFTER IMPLEMENTATION
Satisfied Channel Dissatisfied Channel
Members (Distributors) members (Distributors)
Informal strategic Alliance (Full Formal Strategic Alliance (Absence
of commitment & Trust) of Commitment & Trust)
Satisfied Customers (Sufficient Dissatisfied
Service Output) Customers( Insufficient Service
Output)
Growing Market Share Growth not Guaranteed
Lesser threat from channel members Chances of channel members to drop
for switch ATLAS

Q5:-