Assignment format: What is the role played by “power” in business to business re

Question

Assignment format:

What is the role played by “power” in business to business relationships? Eco-Guardian - a small startup in Toronto is a “…manufacturing and distributing company providing ecologically and socially responsible products including multi-purpose shopping bags, industrial bags and single use compostable food packaging items. Eco-Guardian is committed to protecting the environment by reducing our carbon footprint, significantly decreasing waste and mitigating the disposal of hazardous materials” (Eco-Guardian.com). Recently, Eco-Guardian has entered into an agreement with Wal-Mart to supply very large and repeat “orders” of table-ware products. These products are selling well across all Wal-Mart Super-stores in Canada. While the deal is hugely prestigious for Eco-Guardian, the price-squeeze is forcing the company to sell their product “at cost” – (barely covering their variable costs). This “take-it-or-leave-it approach by Wal-Mart is forcing Eco-Guardian to shift their focus on keeping Wal-Mart stores well stocked, while making very little money. Is the role played by Wal-Mart unethical or unfair?

Based on the above, please answer the first question.

Use 1.5 spacing, 12 pitch font). Feel free to use class-note materials and textbook for citations. How long should it take to answer each question? Please use your judgement. When you feel that you have answered the question to your satisfaction, thats when you stop.

Assignment Questions:

You are required to answer both strategy questions listed below: Please take a “strategic" position, in terms of what the two companies should do in the situations described above. In other words, view yourself as a consultant to the Marketing VP and advise him/her on an appropriate course of action.

Strategy Question1: Canadian Business magazine has just ranked Eco- Guardian as the 45th fastest growing company in Greater Toronto Area. In light of such rapid growth, what do you suggest Eco-Guardian should do about their dealing with WalMart? That is to say, should they just discontinue their "problematic" relationship with the giant retailer and focus on small businesses in Canada? Based on your understanding of fast growth businesses, what should they watch out for in the next 2 to 5 years?

Strategy Question 2: Please refer to the following Court decision relating to the Jose Cuvervo Case:

Cohiba Decision_ Federal Appeals Court.pdf

What is Judge Snyder's view of Professor Kindra's approach to establishing the fame of Cohiba? Is her view consistent with the Trade Mark Act of Canada? Do you agree? What is the importance of her decision?

Assignment Questions:

You are required to answer both strategy questions listed below: Please take a “strategic" position, in terms of what the two companies should do in the situations described above. In other words, view yourself as a consultant to the Marketing VP and advise him/her on an appropriate course of action.

Strategy Question1: Canadian Business magazine has just ranked Eco- Guardian as the 45th fastest growing company in Greater Toronto Area. In light of such rapid growth, what do you suggest Eco-Guardian should do about their dealing with WalMart? That is to say, should they just discontinue their "problematic" relationship with the giant retailer and focus on small businesses in Canada? Based on your understanding of fast growth businesses, what should they watch out for in the next 2 to 5 years?

Strategy Question 2: Please refer to the following Court decision relating to the Jose Cuvervo Case:

Cohiba Decision_ Federal Appeals Court.pdf

What is Judge Snyder's view of Professor Kindra's approach to establishing the fame of Cohiba? Is her view consistent with the Trade Mark Act of Canada? Do you agree? What is the importance of her decision?

Explanation / Answer

Q1) Is the role played by Wal-Mart unethical or unfair?

No the role played by Walmart is neither Unethical nor Unfair. The degree of power in a business is purely determined by economics. In an business relationships there are price and market makers. Walmart is currently Eco-Guardian's biggest client so it has every right to set and dictate prices. if Eco-Guardian had multiple vendors or distributors then it would wield more power over setting prices and negotiate with Walmart. In order to do so Eco-Guardian would have to build its own brand equity, distribution network, sales and marketing channel.

How Prices are Set in a Free Market

There are two ways to keep demand at an constant or to increase demand. The first is to increase prices and the second is to differentiate the product or the service being offered. If price changes without any changes in the net value that the product or a service is adding to a customer, it would inevitably effect the demand for the product or service. This is best highlighted by the demand curve in behavioural economics through a series of graphs known as elasticity of demand. Monopolistic firms are the only ones who enjoy perfectly inelastic demand for their products or service, where a change in price is't followed by the change in demand. For all other companies however, they would have to add a degree of value to prevent demand levels from falling.

Assignment Questions:

You are required to answer both strategy questions listed below: Please take a “strategic" position, in terms of what the two companies should do in the situations described above. In other words, view yourself as a consultant to the Marketing VP and advise him/her on an appropriate course of action.

Q2) Strategy Question1: Canadian Business magazine has just ranked Eco- Guardian as the 45th fastest growing company in Greater Toronto Area. In light of such rapid growth, what do you suggest Eco-Guardian should do about their dealing with WalMart? That is to say, should they just discontinue their "problematic" relationship with the giant retailer and focus on small businesses in Canada? Based on your understanding of fast growth businesses, what should they watch out for in the next 2 to 5 years?

Answer :

No i think the best way to regain bargaining or negotiating power it to diversify the distribution and reseller channels for Eco Guardian. They should build relationships with other big box retailers like , Target etc. This would allow them to effectively gain an upper hand in negotiations. Since they'll have close substitutes for Walmart. Target is a big box retailer department store in the United States with over 1800 Stores Across 49 States in the Unites States. Target is charges around 15 % more than other traditional department stores like Walmart and Sears which means that target could provide higher profit margins for Eco Guardian .

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