Dear Anonymous A,
I would structure this is a Don’t Act/Act decision protocol, and structure the decision criteria into two broad buckets (see below) for each option.
Under Don’t Act, I would test the financial implications of this decision (bucket I).
Under Don’t Act, I would test all other non-financial implications of this decision (bucket II).
I would do exactly the same under Act.
Now, you’ve asked how would you structure this.
For that, the starters above would form the top line of any eventual structure. But, I would have asked some clarifying questions first under two broad lines of enquiry:
- What financial and market power does the supermarket chain wield?
- What financial and strategic needs does our client face?
These two questions above are not my actual clarifying questions; rather, they are the two broad lines of enquiry I would pursue with appropriate questions as I see fit.
Returning to the structure, I would then establish a quick issue tree based on the identified (through the clarifying questions) power pull of the supermarket chain in all financial matters and in all other non-financial matters.
Then I would do the same for our client’s financial and strategic needs.
I would then establish a hypothesis:
Let us act (i.e., ‘franchise our product’ under the supermarket’s brand) if two conditions are met:
- Not acting would harm us in some financial or non-financial way and/or
- Acting would benefit us in some financial or non-financial way
otherwise, let's not act.
I know which way I already lean in this interesting Case based on the fact that our client produces a commodity product (easily replicable/attainable elsewhere?), that our Client can be shut out of a market (how big to be worried?) that our market player has other options (as stated in Case prompt/as implied by commodity product), but it could go either way.
This is the sort of case that requires some intellectual rigour whatever the final recommendations. In other words, whatever the ‘final answer’ ends up being, a complete solution must, of course, include a robust counter Case in the wrap-up.