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Case Study 4

Le Clerc Machines de Cuisine

3 Companies

- LeClerc Machines de Cuisine : Manufacturer of the food processors

- Creative Cuisine : Exclusive U.S. distributor for LMC

-Reliable Restaurant and Home Kitchen Supplies : Unofficial U.S. Distributor

Based in Paris, France

Based in Atlanta, Georgia

Based in New Jersey

Protagonists

CreativeCuisines

Marie Dominic

Attorney

Sandra Jordan

AdvertisingAccount

Executive

Bill LewisPresident

Jane Watson

Sales Manager

Reliable

Albert RosePresident

LeClerc

François Jost

Overseas Sale Manager

Dialogue

Creative Cuisines sales are lowering in July

Incertitude on how Reliable got the food processors

Reliable’s products seem to be genuine

A lawsuit against Reliable won’t be easy

Exhibit 1

Exhibit 2

Exhibit 3

Exhibit 4

Exhibit 5

Overview of the Exhibits

1. Letter sent by LeClerc to all distributors to find the ReliableRestaurant supplier

1. Letter from Dominic to the president of Reliable Restaurant to inform them that Creative Cuisine has the exclusivity

1. Memo from Jane Watson to Bill Lewis to certifiate that Reliable’sfood processors are genuine

1. Memo from Jane Watson to Creative Cuisines Sale Department to inform that prices are lowering

1. Reliable’s Ad in magazines for mail order

1. Letter from Sandra Jordan to Bill Lewis to confirm the new agressive advertising

Current Situation

• Communication• Intercultural Differences• Ethics & Legality• Management• Advertising & Pricing

Communication

• Good Communication between Bill Lewis and Jane Watson

• Marie Dominic is really concerned

• No answers from Reliable

• No answers from the other LMC’s distributors

Intercultural Differences

• No cultural conflict in Creative Cuisines

• No significative differences between French and American business

• LeClerc may not care about US competition as long as they sell their products

Ethics and Legality

• Reliable may be in illegality

• Good reactivity to protect CC’s interests

• The contract between Creative and LMC is clear

• The way Reliable obtained the products is not very clear

Management

• Efficient teamwork in Creative Cuisines

• Fast response against Reliable’s low prices

• LMC doesn’t know well their distributors

Pricing, Marketing and Advertising

• Good reaction with aggressive advertising

• CC lowers the prices to be more competitive

• Less sales due to the absence of a low costdistribution channel

• Less profits on the sales

Statement of Problems

What can we do against Reliable arrival on the market?

Is this arrival legal or not?

Options

Option n°1 :

Status Quo

Do nothing and wait for the results of the new price policy

No more time or money spent in this case

The problem still existsIncertitudes about the economical results

Option n°2 :

Create our own low-cost distribution network tocompete Reliable

Creative Cuisines will be more competitiveIncrease of sales

Costs a lot of money to set upThere could be a more agressive response in termsof prices from Reliable

Option n°3 :

Create a new partnership with Reliable

No more problems

Creative Cuisines and Reliable may not find an agreement

Option n°4 :

Close Reliable by legal means

Creative will be the leader on the market

Costs a lot of time and money to set upNot sure if Reliable’s actions are illegal

Option n°5 :

Stop the partnership between Creative Cuisines and LeClerc

No more problems

We lose a big opportunity on the Amercan market

Overview of the options

Option n°1 : Do nothing and wait for the results of the new price policy

Option n°2 : Create our own low-cost distribution network to compete Reliable

Option n°3 : Create a new partnership with Reliable

Option n°4 : Close Reliable by legal means

Option n°5 : Stop the partnership between Creative Cuisines and LeClerc