Product Differentiation

Bolster is one of the top four players in the video surveillance category of Canadian electronic security industry. Bolster has always been a technology focused firm offering wide range of services and enjoyed a warm reputation among its customers. It has adopted a strategy of selling its products through distributors [Exhibit 4], thereby allowing it to focus more on technology development. Bolster has partnered with two distributors - National distributor and Albright industries, who dedicate their resources, engineering expertise and sales force to enhance the sales volume and brand loyalty of Bolster's product line. National being the most prominent among them is the biggest source of revenue generator for Bolster. The Distributors are also given a handsome margin of 48% [Exhibit 1]. Distributors in turn would sell to several regional dealers who would sell the products to end users. There were also a small numbers of OEMs whom Bolster sold directly.

Recently one of the regional dealers - Vickers which operated in the Alberta region has demanded a better pricing discount (similar to a distributor) on the grounds of increasing sales volume it has generated for Bolster in the past few years. Previously in 2007, the Vickers has already been given status of territorial dealership. Vickers has shown impressive performance in last five years [Exhibit 2]. Vickers has been serving the industrial customers for long times and has gained considerable the intangible goodwill in Alberta region, mostly generated by its quality service and sales force expertise. The Alberta region, due to presence of prosperous oil sands area of Fort McMurray, is expected to grow economically and therefore the demand for video surveillance category can be assumed to grow proportionally. Hence, Vickers is poised to play a valuable role in expanding the business of Bolster in Alberta region and given greater flexibility and responsibility, it can further strengthen the business of bolster in Alberta as well as in nearby regions.