Case TELCO opened bookings for different models of its proud small car Indica in late 1998. The
consumer response was overwhelming. Most of the bookings were for the AC models, DLE and
DLX The DLE model accounted for more than 70 percent of the bookings.
Telco has planned to commence delivery of the vehicles by early 1999. However, delivery
schedules for the AC models were upset because of some problems on the roll out front.
According to a report in The Economic Times dated 13 March 1999. Telco officials attributed
the delay to non-availability of air conditioning kits.
Subros Ltd. supplies AC kits for the DLE version and Voltas is the vendor for the DLX version.
Incidentally, Subros is also the AC supplier to Maruti Udyog Ltd. Telco officials alleged that
Subros was being pressured by the competitor to delay the supply of kits. "If this continues, we
will be forced to ask Volfas to supply kits for the DLE version too, "a company official said
Case Questions
1) Why did Telco land itself in the problem (supply problem in respect of AC kits)?
2) If the allegation about the supplier is right, discuss its implications for the supplier.
3) Evaluate the ethical issues involved in the case. (Also consider the fact Maruti was 50 percent
Government owned).