1. London Graves
6/13/15
Alexis Downs
Summer Capstone
Assignment #1
A Wholesaler Finds Himself in Competition with Retail Clients
By John Grossman on April 24, 2013
DESCRIBE:Case Industry, and place the case in this context.
The industry that Gerald Shvartsman is in is the outdoor furniture industry. He sells
outdoor furniture to both customers and retail stores mostly in southern Florida and but
he also sometimes sells to clients in other states. I have placed Gerald’s business in the
furniture and flooring industry, and the five forces in this industry are all relatively
moderate, with the exception of buyer power. Buyer power is a little on the weaker side.
See appendix for graphical representation of the five forces of this industry.
IDENTIFY:Problems and root cause of the problems.
The problem that Gerald is having is that his retail customers are upset with him because
he is also selling directly to their potential customers. This problem could soon make the
retail clients not want to buy from him. Thus, he would lose many of his retail sales.
The root cause of the problem that Gerald is having is he is not utilizing all of his channels
effectively so that he is able to sell to both the retail clients and directly to customers.
DIAGNOSIS:
My diagnosis for Gerald is: to be able to sell to all parties and maximize his profits, without
any one party getting upset with him; he should try to use all the channels of sells available
to him.
2. SOLUTION and RECOMMENDATION:
Alternatives:
a. Gerald can only sell to directly to customers. This allows him to freely sell
furniture to customers at home shows. This option means he will lose his retail
customers.
b. Gerald can only sell to his retail customers. This mean he will no longer directly
sell to customers.
c. Gerald can create a multi-channel sells strategy. This will allow him to sell to
both retail customers and directly to customers at home shows.
d. Gerald can do absolutely nothing and let the symptoms create larger problems.
My Recommendation:
I recommend that Gerald should create a multi-channel sells strategy. In this
strategy, Gerald will need to make the retail clients believe that he is also helping them as
well. This will make them feel less upset that he is also selling directly to their potential
clientele. He will also need to make sure that he is not taking sells from his retail clients, but
allowing them to share the sell. Maybe he can give the direct customers a coupon to use at
the retail stores. He could also allow the retail clients to share his home show booths. By
sharing the booth, he is allowing the direct customers to view a wide variety of furniture. By
doing this strategy Gerald is allowed to sell directly to customers (which he makes the most
profit from), and to his retail customers which makes up the rest of his annual profits.
