An upscale retail specialty store with strong customer service carries quality merchandise that can be worn in any season. The dress department is the most important department in the store and does a large sales volume. It has exclusivity with a vendor which produces well-made dresses in the United States; thus, there is no competition for this merchandise. In return for exclusivity, the retailer has made large investments in advertising this product. After three years with this arrangement, a conflict arises as the vendor announces they will be expanding and will sell to other retailers, adding competition and ending their exclusivity in the trading area. One of the retailers they will sell to is a moderate company giving a discount store impression through their advertising of promotional merchandise. Having the same label in both an upscale and moderately priced retailer can lower the image of the upscale store. The retailer needs to make a decision concerning the status of this vendor.