London Business School
The goal of this exercise is to help students understand the problem of double marginalization in a firm’s go-to-market decisions and consider different means to address it. Specifically, in the first part of the exercise students are encouraged to calculate the financial impact on Twisterden, a British winery, of sticking with the direct-to-consumer strategy versus engaging with one or more wine merchants. The second part introduces two possible retail partners, Cult Drops and Fancy Grapes, as the idea is to engage students in a discussion of the type of mechanisms and retailer characteristics that may facilitate dealing with an intermediary. Overall, the debate in class is supported by hands-on calculations, where students defend their preferred course of action and make recommendations based on the data provided in the exercise.