3. Overview :
Location :
!
• LeClerc Machines de
Cuisines
—>Paris, France
!
• Creative Cuisines
—>Atlanta, Georgia, USA
!
• Reliable Restaurant and
home kitchen supplies
—>New Jersey, USA
!
!
4. Leclerc
Machines de
Cuisine
Reliable Restaurant and
Home Kitchen Supplies
Mr. François Jost
(Overseas Sales
Managers)
Owens, Garfield
and Sueton, Inc.
Feingold
Advertising
Ms. Marie Dominic
(Attorney
representing Creative
Cuisines)
Ms. Sandra Jordan
(Account Executive)
Creative Cuisines ,
Inc.
Mr. Bill Lewis
(President)
Ms. Jane Watson
(Sales manager)
Mr. Albert Rose
(President)
Overview :
Names and Positions
5. Overview :
Dates
January
July
5th of August
31st of July
4th of August
Launch of LeClerc (exclusive) products on the American market
We discovered that Reliable is selling LeClerc products, which results
to a conflict in our contract of exclusivity with LeClerc
Letter from our Attorney to Reliable’s President, where we ask them
to stop selling LeClerc’s products
The analysis of Reliable merchandises came back positive, so it’s
certified that they are selling genuine LeClerc products
Response of Creative Cuisines : price reduction of 30% ( during 2
months) and agressive advertising
6. Overview :
Documents
• Dialogue : Between Mr.Bill Lewis, President, Creative Cuisines, Inc and Ms. Marie
Dominic, attorney representing Creative Cuisines
!
• Exhibit 1: English Version of a Letter Sent by LeClerc to All Distributors
!
• Exhibit 2: Letter from Dominic to Albert Rose, President, Reliable Restaurant and
Home Kitchen Supplies
!
• Exhibit 3: Memo from Jane Watson, Sales Manager, Creative Cuisines, to Bill Lewis
!
• Exhibit 4: Memo to Creative Cuisines Sales Department from Jane Watson
!
• Exhibit 5: Reliable's Ad in a Number of Consumer Food Magazines and
Professional Journals
!
• Exhibit 6: Letter to Bill Lewis from Sandra Jordan, Account Executive at Feingold
Advertising, Creative Cuisine's Advertising Agency
7. • Dialogue : Between Mr.Bill Lewis, President, Creative Cuisines, Inc and Ms. Mar
Dominic, attorney representing Creative Cuisines
8. • Exhibit 1: English Version of a Letter Sent by LeClerc to All Distributors
9. • Exhibit 2: Letter from Dominic to Albert Rose, President, Reliable Restaurant
and Home Kitchen Supplies
10. • Exhibit 3: Memo from Jane Watson, Sales Manager, Creative Cuisines, to Bill
Lewis
• Exhibit 4: Memo to Creative Cuisines Sales Department from Jane Watson
11. • Exhibit 5: Reliable's Ad in a Number of Consumer Food Magazines and
Professional Journals
12. • Exhibit 6: Letter to Bill Lewis from Sandra Jordan, Account Executive at Feingold
Advertising, Creative Cuisine's Advertising Agency
13. Overview
• Problems :
-Violation of exclusive
distribution agreement
-Loss of sales revenue
-Unfair Competition (Illegal
competition)
14. - Leclerc Machine de Cuisine, a French manufacturer of food processors, signed an
exclusive distribution agreement with Creative Cuisines, an American distributor, to
give them the exclusivity of selling its product in the United States.
!
!
!
- However, 6 months later, Creative Cuisines found out that despite their agreement,
another company, Reliable restaurant and Home Kitchen Supplies, was also selling
LeClerc products.
Overview
• Business Overview :
15. Communication
Strenghts Weaknesses
-Good communication between Creative
Cuisines and LeClerc’s headquarters
!
-Fast communication and reactions (less
than a week) inside Creative Cuisines
(with the attorney representing, the sales
manager) and outside (with the
Advertising Agency and Reliable)
(Dialogue, Exhibit 2, 3, 4 & 6)
-Lecler’s lack of knowledge inside the company
-No response from Reliable
!
-No response from LeClerc’s distributors
!
-No direct and detailed communication
between LeClerc Machine and Creative Cuisines
(Just a message from LeClerc to its distributors
in Exhibit 1)
Existing situation :
Strenghts and weaknesses
16. Ethics
Strenghts Weaknesses
-LeClerc’s headquarter seems
trustable and involved
-Reliable may have known about
the contract, knowingly doing an
illegal action
Existing situation :
Strenghts and weaknesses
17. Management
Strenghts Weaknesses
- Creative Cuisines succeeded an exclusive
distribution agreement with LeClerc whereas
it was at first reluctant (Background)
!
- Creative Cuisines leads very quick
investigations (Genuine products, legal rules)
and competitive actions (Legal and Marketing
actions) (Dialogue, Exhibit 2, 3, 4, 6)
!
- Good teamwork and involvement within
Creative Cuisines (Dialogue, Exhibit 6 “We
will them at their own game”)
- LeClerc Machines de Cuisine may have some
management problems with its distributors (no
answer from them in Exhibit 1)
!
- LeClerc Machines de Cuisine could have break
his exclusive agreement with Creative Cuisines
(Dialogue)
!
- LeClerc Machines de Cuisines doesn’t know if
his distributors have contracts with Reliable
(Exhibit 1)
Existing situation :
Strenghts and weaknesses
18. Legal
Strenghts Weaknesses
- Exclusive distribution agreement in the US
between LeClerc and Creative Cuisines
(Background)
- Non-respect of this agreement, on purpose or
not (Background)
!
- Reliable offers the same warranty as Creative
Cuisines (Exhibit 3)
Existing situation :
Strenghts and weaknesses
19. Financial
Strenghts Weaknesses
- Low of Creative Cuisines prices: from $399 to
$310 for the professional model and from
$279 to $189 for the standard one ! Better
prices than Reliable (Exhibit 4)
!
- Reliable add $18 for postage and handing
(Exhibit 5) ! Manipulation of the customer
- Reliable prices : $337 (319+18) for the
professional model (ATI) and $207 (189+18) for
the standard one (ATI) (30% off the list price)
(Exhibit 5)
!
- Sales revenues of Creative Cuisines are off
about 30% in July (which is unusual for this
month in general) (Dialogue)
Existing situation :
Strenghts and weaknesses
20. Marketing
Strenghts Weaknesses
- Fast and competitive reaction of Creative
Cuisines (less than a week) : Launch of an
aggressive ad campaign with information
about Reliable pirate actions, bad warranty
(Exhibit 6)
- Reliable already launched add with competitive
prices (Exhibit 5)
Existing situation :
Strenghts and weaknesses
21. Statement of problems :
Should Creative Cuisines still trust and continue to
distribute Leclerc products despite the possible violation of
the agreement and therefore the presence of a major
competitor ?
22. Option 1 —> Nothing changes
• It’s LeClerc responsibility to find
who’s fault it is
• Consumers will be aware that
Reliable are « pirates », thus
making us regain market shares
• Maintain our presence in the
market and in the competition
!
• Legal expensive costs
• It may attracts other competitors
• Possible loss of market shares and
revenue in favor of Reliable
Restaurant
• Loss of revenue due to the reduction
of our prices (reduction of our
margins)
23. Option 2 —> Complain to Reliable Restaurant for
illegal distribution
!
—> In case of illegality
• Regain the exclusivity of the market
and set the prices we want
• Earn money in compensation!
• Long and expensive legal proceedings
!
—> In case of legality
• Bad image for the company
• Loss of money in the trial
• Don’t solve the problem of a new
distributor in the market
24. Option 3 —> Complain to LeClerc
• Possibility to earn financial or
material compensation
!
• It can lead to a deterioration of our
business relationship with LeClerc
• Possibility to loose our contract with
LeClerc
25. Option 4 —> Radical Change: Stop the agreement with
Leclerc and therefore stop distributing their products.
• No legal issues with Leclerc and
reliable restaurant anymore
• Stop an agreement with a
company that doesn’t respect its
deals
• Loss of a huge part of the market
and of revenue by stopping the
agreement
• Need to find another manufacturer
quickly if we want to keep making
profits
26. Option 5 —> Radical Change: Merge/Buy with Reliable
• No legal issues with Leclerc and
Reliable restaurant anymore
• Leadership
• Huge costs ( inc. legal)
• Not sure that Reliable is ok with it
• Many infraestructuras to handle
27. Recommendations :
!
-Option 1 —> continue the
investigation to find out if
Reliable is guilty
-Option 2 —> to regain the
market shares
-Option 3 —> claim financial
compensation to make up
for the loss of market shares
