Iceberg Case 1 1

Background information Iceberg Ltd – frozen food operations Opened 8 weeks ago on a premium site Theme ”customer confidence” Keep-it-cold installed refrigerator system at cost of £ 250 000 and has maintenance contract at a yearly cost of £ 18 750 2 hour call out commitment Keep-it-Cold distanced about 150 miles from Iceberg

Background information Friday at 2 pm something happened: Visual alarm – temperature has risen slightly Called Keep-it-cold for assistance Agreed service could wait until the next day (Keep it cold was very busy too) During the night, the cooling system went down completely and all cabinets had room temperature and stock loss of £40 000

Background information Service engineer arrived at 11 am instead at 8, when she was expected. She had been busy all night elsewhere Deputy manager at Iceberg was on the phone to Keep-it-Cold all morning to express his anger Keep-it-Cold says that it was agreed that service could wait until today – they had not received any more calls saying there was an emergency

Background information Manager of Iceberg says employee who called were ”persuaded” into agreeing to bad terms Senior management were away (and employee did not contact senior staff) Regional office assumed Iceberg was aware of the problem as they had reported the incident to Keep-it-cold Phone calls are argumentative and blame seeking

Background information Iceberg has lost money Stock 40 000, profit 14 000 and labour costs 2 000 Damage to reputation and customers, store is brand new (8 weeks old) Iceberg threatens that the whole maintenance contract with the group may be in jeopardy (256 stores)

A meeting has been called… Questions What is the main common interest of Iceberg and Keep-it-cold in the dispute? How far should Iceberg push for compensation? Should Keep-it-cold resist of pay compensation? What proposal might Iceberg make to resolve the dispute? What would jeopardize Iceberg`s and Keep-it-cold chances of resolving the immediate problem?