Service Sales Corporation: The Wholesale Challenge

Ahmed Hussain had just concluded an intense phone call with one of the biggest wholesalers in the central region. The wholesaler had made it clear to Ahmed that he would not use his current monthly budget to buy from Service Sales Corporation (SSC) unless Ahmed matched the offer being made by one of his competitors in terms of discounts on purchase. Ahmed had been at SSC for well over 5 years, he came back to Pakistan after studying at Carnegie Mellon University. He had been appointed as country head wholesales just over a year ago. However, his previous education and experience had not prepared him for such a challenge in the unstructured footwear industry of Pakistan (Ahmed had studied engineering, and this was his first job in a sales role). The case focuses primarily on the power of channel partners within an industry. The importance of the wholesaler in the context of SSC is discussed, and their role within the value chain is elaborated upon. The objective is for the class to assess the business situation presented before them in the case and evaluate the options under discussion. Ahmed is depicted as being under severe pressure to meet his goals and improve the performance of the wholesale channel. He faces competition from the SSC retail channel as well as other large players in the market. The situation is considered so serious that key executives within the company are considering getting out of the wholesale channel and focusing on retail only. Ahmed and his team, however, are not willing to let go of 30 per cent of the company’s revenues and have proposed bypassing the wholesalers and selling directly to private independent non-exclusive retailers. Another option put forward is to launch a new brand into the wholesale channel at a lower price point.