Strategic Mgmt
Essay by review • December 23, 2010 • Study Guide • 687 Words (3 Pages) • 1,019 Views
Case Analysis
Laramie Oil Company: Retail Gasoline Division
Submitted by:
Yawna R. Jones
MKT 514
Dr. J. Lee
1. Identify the areas of conflict between Laramie Oil and its dealers.
2. Sales rep does not allow the dealers to sell at more than a four-cent markup.
3. Forcing the dealers to sell the premium offers.
4. The reps force the dealers to keep certain hours. If the dealers do not keep the hours, threatens not to renew the lease.
5. Turn some stations into a company-owned and -operated outlet.
6. Laramie forces their TBA brands on the dealers.
7. Laramie running their own discount stations in competition with some of the franchises.
2a. Why would the company want to follow its current policies with regard to these areas?
George Thomas states that the policy is to let dealers set their own hours. The dealer also has the right to establish its own prices. This will keep the lessees/dealers happy. This would give them the control over their store. If the representatives are forcing the dealers to set certain house, those representatives should be reprimanded. As far as requiring them to buy TBA products from Laramie, this would help keep them from giving money to Laramie's competition. This will help keep money in Laramie's pockets.
2b. Why do the lessees and franchised dealers object to those policies?
The lessees and franchisees feel like they should be able to set their own prices and own store hours. They should not have to fear losing
their business for not following the reps set rules. The representatives are forcing them to do opposite of what George Thomas said. The representatives are forcing them to set certain hours and certain prices. This causes the lessees/dealers to feel like their views are not being heard to management.
3. What alternatives are available to Mr. Thomas to handle these conflicts? What do you recommend?
Alternative 1
Give the dealers/lessees more control over their business.
Pros
*This would keep the dealers/lessees happy. If they are happy, they are most likely to stay in business longer.
*This might help reduce Laramie's turnover rate.
Cons
*This will allow dealers/lessees to buy
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