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Discuss the formal intervention strategy used

The intervention that Alcopops and Wonder Bronski used is non-binding mediation.
Non-binding mediation is usually adopted by parties in order to either delay litigation or to
avoid other expensive conflict resolution mechanisms (Georgakopoulos, Coleman & Storrow,
2017). In this process, the parties in conflict agree to submit their claims or disputes for
mediation that is conducted by a mediator who is agreeable to all the parties in the conflict
(Georgeakopoulos et al., 2017). The mechanism is termed as non-binding because neither of
the parties involved in the conflict is under obligation to enter into settlement that results
from the mediation process. One of the parties can walk away from the process if they feel
that the process is not serving their interests or refuse to agree to the settlement if they are not
satisfied with it. Thus, in non-binding mediation, the parties only agree to the settlement if
they are satisfied with it. Once an agreement has been reached that the conflicting parties are
satisfied with, the parties enter into an agreement that is binding to them.
Discuss whether the strategy used satisfactorily resolved the conflict
The non-binding strategy that the two parties used satisfactorily resolved the conflict
between the two parties. With regards to Alcopops, the American manufacturer and distiller
of alcoholic beverages, it wanted Wonder Bronski, the Russian alcohol distiller and
distribute, to stop using the 8-sided bottle because it considered that type of bottle to be the
company’s signature (IM12 Mediation, 2011). It also wanted Wonder Bronski to stop using
2-sided stripped label, the color scheme, and Octave trademark on Wonder Bronski’s Pico
Bello Octave drink (IM12 Mediation, 2011). From Alcopops point of view, the Wonder
Bronski’s Pico Bello Octave infringed on its trademark and was meant to hurt sales of the
Kik Octane brand that it planned to launch in the Russian market.

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As for Wonder Bronski, the issues at hand were simple. It felt that it had not infringed
on trademark of Alcopops for two reasons. First, Alcopops had given it license to use the 8-
sided bottle in 1992 and the license remained valid. Secondly, the Paris Convention only
protects trademarks in the country that a business organization operates in and since
Alcopops did not operate in Russia, it could not claim that Wonder Bronski was infringing on
its trademarks (IM12 Mediation, 2011). Thus, from the point of view of Wonder Bronski, it
had not committed any wrongdoing and was, therefore, free to start selling its Pico Bello
Octave brand in the Russian market.
Apart from these issues that the two parties brought up, there were other issues that
they were really concerned about and which they shared with the mediator in private. For
Alcopops, its main concern was that Wonder Bronski’s use of the 8-side bottle brand would
make it hard to effectively market its products in the Russian market. As for Wonder Bronski,
its main fear was that Alcopops planned to introduce High Octave brand in the Russian
market to rival its products in the premium and super-premium market (IM12 Mediation,
2011). For Wonder Bronski, the introduction High Octave would constitute a major threat to
its most profitable market segment.
After discussion with the mediator and among themselves, the two parties reached an
agreement. In the agreement, Alcopops agreed not to introduce the High Octave brand to the
Russian market and allow Wonder Bronski to use the two-ton color scheme. In return,
Wonder Bronski was to sell back the license of the 8-sided bottle brand to Alcopops.
Additionally, there was valued added to the relationship of the two parties after they
reached an agreement. Having started as adversaries, the two parties ended up being business
partners. Wonder Bronski agreed to use its knowledge of the Russian market and huge
distribution channels to distribute Alcopops’ Kik Octane brand in Russia on condition that it

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got higher than average margins, there was no minimal volume to distribute, and that it was
to be the only distributor of the brand in Russia (IM12 Mediation, 2011). Wonder Bronski
also suggested that it manufactures the brand in Russia on behalf of Alcopops in order to
avoid punitive importation taxes. As for Alcopops, it agreed to distribute Wonder Bronski’s
coffee flavored, red hot chili vodka outside of Russia using its huge distribution channels,
particularly in the US. Thus, thanks to the mediation process, not only did the parties arrive at
a satisfactory agreement over the issues that they had but they also managed to develop a
mutually-beneficial relationship that would serve their business interests in the long term.
Additional formal intervention strategy that the team could have had for the same or

better outcome

Even though the non-binding mediation served the two parties right, they could also
have used arbitration to reach a settlement that was acceptable to both of them. Arbitration
involves the use of a third party to decide an outcome which is legally binding to the
conflicting parties (Menkel-Meadow et al., 2018). Unlike non-binding mediation, parties
which enter arbitration are contractually bound the final decision that the arbitrator makes
whether they like it or not.
Another difference that arbitration has with non-binding mediation is that, unlike in
non-binding mediation, the arbitrator is usually directly interested in the reasons, facts, and
content that led to the development of conflict between the two parties (Menkel-Meadow et
al., 2018). This high level of interest in such matters is because the arbitrator can only make a
fair decision after carefully analyzing the arguments of both parties and the evidence that they
present. The final decision that the arbitrator makes should reflect all the facts of the conflict.
In the conflict between Alcopops and Wonder Bronski, arbitration would have
worked well because the dispute between them was over points of law and facts rather than

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emotional matters. Additionally, given the lack of trust and goodwill that the two parties
showed in the initial stages of the mediation process, arbitration would have been a good fit
because it works best when the parties in conflict do not trust each other or when there is no
goodwill between them. Another advantage of arbitration that makes it suitable for use as a
conflict resolution mechanism in the case between Alcopops and Wonder Bronski is that it
can balance unequal power distribution between conflicting parties. In the conflict between
the two parties, Alcopops was the more powerful partner. As the fourth largest alcohol
distributor in the world with distribution channels spread across the globe, it had a bigger and
better-known brand than Wonder Bronski which was only in the Russian market. Thus, the
use of arbitration would have leveled the power imbalance between the conflicting parties.
Given these advantages of arbitration, there is no doubt that it could have led to an equally
good or even better settlement between Alcopops and Wonder Bronski.

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References

Georgakopoulos, A., Coleman Jr, H., & Storrow, R. (2017). Organizational conflict
management systems: The emergence of mediators as conflict resolution
professionals. In The Mediation Handbook (pp. 153-163). Routledge.
IM12 Mediation (2011, Sept. 28). Resolution Through Mediation: Solving a Complex
International Business Problem. Retrieved from https://youtu.be/xTbj-eHwX-w
Menkel-Meadow, C. J., Porter-Love, L., Kupfer-Schneider, A., & Moffitt, M. (2018). Dispute
resolution: Beyond the adversarial model. Aspen Publishers.