Risk and Reward: The Games Manufacturers Play
In American business, the bottom line is profit. Both manufacturers and dealerships must make money. Many things can interfere with this goal. Consider the following situations, which create overwhelming pressure on the dealership:
• The manufacturer is producing large numbers of defective products. The dealer can’t change this.
• The manufacturer sets a warranty repair budget for the dealership. When the budget is depleted, the dealership is penalized. For example, the dealership may have to eat repair costs.
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