Current situation and Challenges
The biggest challenge for Gino China right now is whether to take over Feima’s OEM business from its biggest distributor Jinghua or not. On one hand, Feima’s business is apparently attractive to Gino in terms of size and potential, and more importantly, is align with Gino’s OEM channel development strategy. However, on the other hand, Gino don’t want to take risk of losing Jinghua, which account for 40% of its total revenue. Theoretically speaking, take Feima is the choice, but in reality, Gino have to take other factors into consideration.
How to deal with Feima’s OEM business
It is obvious that by taking Feima, Jinghua will be offended. The worst result to Gino will be losing North China’s market which is not acceptable. Even worse, the other two distributors, FUNG and Wayip, who are worrying about their OEM business might align with Jinghua by then and lose their confidence in co-operating with Gino. More than that, our competitors may leverage on this issue and spread wording across the whole burner distribution channel in China. It would potentially destroy Gino’s reputation among China’s burner distributors. Last but not least, Jinghua would definitely put this issue in public during the global distributors’ meeting and such action is not acceptable by David’s manager. Taking so many negative impacts into consideration, it’s not a wise decision to directly take Feima’s business from Jinghua. To save face for both side and reach a win-win result in the end, we have to figure out the key –meet Feima’s expectation- to solve this problem which is give more discount on Gino burners. At first glance, it is not possible to reach that target through Jinghua. As by giving benefit to Feima, Gino have to bear the lost by itself. However, we have to keep in mind that we can grow the pie together to reach a win-win result instead of stick to a win-lose situation.
To Feima’s case, Gino should negotiate with Jinghua from three...
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