Balster Electronics Case Analysis

Decent Essays
Bolster Electronics: Dealing With Dealer Demands


Northern Alberta, the oil sands development area surrounding Fort McMurray, is the fastest growing economic area in Canada for several years. Obviously Bolster’s total market share in this area was the highest with one third of the total market share it held national wide. Vickers based in Edmonton, Alberta covered 50% of the local market share and 75% of servicing in that area in spite having a national distributor, National Electronics (National). Also local firms preferred to do business with Vickers than National which has their nearest warehouse in Calgary, Sothern Alberta around 750 Km from Fort McMurray. (Exhibit 1)
Neither Bolster nor National had a video
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Fortunately, last time National’s dissatisfaction disappeared in a long run since they are not competing for the same market. National doesn’t take any leap in past 5 years in doing business in northern Alberta though it was informed about the huge potential of increasing market share. It seems National is not interested in increasing his presence in northern Alberta.
Because of technological advancement and increased competition from three other major players it was difficult for Bolster to maintain an overall gross margin of 40% of factory price. In the current scenario if Bolster gives a distributorship to Vickers, it will further affect the financial stability of the company. Though it has a potential to increasing the market share over 90%, if they got distributor’s discount. It will also change the entire distribution channel (a network through which goods moves from the manufacturer to end-users). The distribution cost of each channel plays a major role in selecting the options (Financial Analysis if possible)
Customer service is a major issue since industrial video equipment are normally used in harsh environments. So the distributors or dealers should work faster if there was a production stoppage because of
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