Apple Computer - The Reseller Conflict*

            


Details


Case Code : CLSDM034
Publication date : 2005
Subject : Sales and Distribution
Industry : Hardware
Length : 05 Pages
Price : Rs. 100

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Key words:

Apple, Macintosh, Reseller, Midnight Party, Retail stores, Lawsuit, Discount, Online, Contract, Agreements, iPod

Note

* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.

 


Abstract:
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Apple Computer started its own retail stores in 2001. At the same time, the company followed channel strategies that were aimed at eliminating the traditional resellers and promoting the company-owned stores. This caselet discusses these different methods and their impact on the resellers. It also discusses the lawsuits filed by resellers against Apple resellers. It also discusses the lawsuits filed by resellers against Apple.

Issues:

Importance of channel relations
Impact of channel conflict

Introduction

Thomas Armes (Armes) had been an authorized reseller of Apple Computer, Inc. (Apple), since 1989. He was the owner of Elite Computers of Cupertino, California, and had five retail stores that sold Apple's products.

He had the habit of selling new product launches of Apple on the eve of their introduction in the market through a midnight party organized at his stores. These parties were a huge success and people thronged his stores making him the best reseller of the computer company...

Questions for Discussion:

1. "Our strategy isn't to put our resellers out of business, but to work side by side with them." According to you how far was Apple successful in working in tandem with its resellers?

2. Although Apple was successful in its venture with company outlets, this move had its own downside. In this context, explain the problems faced by Apple despite achieving a turnover of US$1.2 billion in 2004 through its stores.


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