Possible long-term effects on channel relationship

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Question

Amaco, one of the nation's largest oil companies, has been forcing a number of independent service stations to convert from full service stations offering repair service to convenience stores or "gas only" stations. Thus, the highly profitable repair part of the business will no longer be available to those station owners forced to convert. The franchised independent dealers have little choice but to give in to Amaco because the oil company typically owns the station lands and buildings and offers leases of only three years or less. This arrangement appears to vest all of the power with the producer and virtually none with the dealers.

Discuss the situation in the light of the bases of power and the possible long-term effects on channel relationship. Critically discuss the bases of power that should be used by Amaco.

Reference no: EM133989570

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