Ace Brokerage Company CASE ANALYSIS

Ace Brokerage Company

One of the 3 largest food broker

Represent 25 non competing groceries and house

hold supply manufacturer Average commission 3% Over $80000 brokerage from Morreaux. Reputation of high quality distributor. Brokerage agreement was terminated due to quality issue.

Morreaux Sugar Company

70% market share of sugar purchased in steel city.

Agreement terminated with previous broker

Underwood due to effort conflict. Distribution through Ace Brokerage. Wants to Ace Brokerage to pursue institutional buyers. Compatible goals between Ace and Morreaux.

Concern
Ace Brokerage (abc)
Burden of increase sales

Morreaux Sugar
Loss sales potential Growth of institutional

force and their salary. Difficulty in controlling additional sales person. Not familiar with behavior of institutional buyer. Training of sales forces is a concern. Cannot afford rolling stone image

sales business Growth of away from home eating market Failure of ABC to solicits the wholesale institutional distribution. Cannot afford rolling stone image

Alternative
Ace Brokerage Morreaux Saugar
Motivate ABC regarding

Distribution through

existing sales force. Recruit and training of new employees. Terminate agreement with Morreaux Avoid institutional distribution.

future benefits for channel members. Own sales forces for institutional selling Forgo the opportunity for institutional business Choose another broker for institutional trade

Recommendation
Ace Brokerage should go with institutional buyers for

competitive advantage and future growth. Recruit and develop new personnel for institutional business. Training and salary institutional sales persons may be shared with Morreaux. Bring long lasting relationship.