How would the negotiation of the distribution contract with Riscola benefit a company like Riham? Give TWO reasons.
Negotiation between a beverage manufacturer and a soft drink distributor over the terms of a potential distribution contract. Riscola is a multi-billion-dollar, multinational soft drink manufacturer interested in expanding its operations into the Africa country of Uganda. The distributor that was supposed to handle Riscola’s new distribution campaign, Aloe Cola, decided suddenly last week to close its Kampala operations and focus on other African countries. Riscola is eager to sign a new distribution contract with the Kampala-based Riham Beverage, a financially troubled but reputable soft drink distributor. Indeed, Riscola headquarters has authorized its Director of African Operations to offer Riham up to $6.75 million per year for the contract, though Riscola would like that figure to be lower if possible.
Riham desperately wants this contract, which would put it back on the map, attract additional clients, and give the company the confidence and certainty about its future that it has been waiting for to purchase Delight Juices (a juice and specialty beverage distributor). The contract is so important that Riham would almost be willing to distribute for Riscola for free, except for the impact on future agreements and reputation.
Questions:
- How would the negotiation of the distribution contract with Riscola benefit a company like Riham? Give TWO reasons.
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