HUNTER BUSINESS GROUP : TBA
ANALYSIS OF THE CASE
Brief Background of the Case
Star Oil a gasoline services company started TBA (Tyres, Batteries and Accessories), a complementary business which added value to the core business of gasoline sales. The TBA business initial appeared successful as there was a strong correlation between petroleum sales and the auxiliary business but the profits of TBA started showing a progressive decline before turning into a loss making proposition. Star Oil decided to outsource the entire management to HBS (Hunter Business Group) who had a proven track record in turning around businesses dealing in the same domain.
As a part of the turnaround strategy, HBC implemented a number of steps. It
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• They should try to reduce fixed operating cost while in the meantime focus on the most all D client to C. Despite lower revenue than A to AA it is more profitable segment of their customer according to the ratio (Cost/expense), which would be to transfer profitable and it is the most realistic outcome according to the external upcoming situation. Despite an important individual effort from customers, it can be largely compensated through a continuing formation of the sales reps since the amount to sell is not that important.
How important is the Gold Account program as an incentive to dealers?
• The gold account is a good incentive to encourage sales reps to improve market penetration and visibility of the brands through a large range of products. However you can’t force customers to buy what they don’t need or want, it improves your numbers but on the long run, destroy the relationship with the client who ends up with a large inventory that he can’t sell. In the meantime, we don’t have information on the profitability level of the different products. What is the interest to push products that are barely profitable when we could focus on highly profitable products such as we focus on high volume customers? So the Gold Account program might works for some accounts but won t result in the sustainability of the TBA programs since some products
Taking in consideration the attrition rate during the past nine years, it seems to be more convenient try to convert the customers as early as possible; indeed
Concentrate on their current clients, broaden and deepen their relationship with them, while maintaining current offerings
* Re-introduce products to “B” accounts to determine which accounts could potentially become “A” accounts. Continue to develop strong relationships with “B” accounts staff.
Increased marketing budget costs to launch the new product and provide incentives to “Maintenance users
• Having the real customer profitability numbers and using CRM tool, RBC know clearly about the customer preferences and needs, issue is what should RBC do with this
If the cause of the decrease is because of product, the company should work with the implementation of new products or maybe establishing a new image for the product in sale decrease. If the product is still on demand and the decrease is because economy they should establish a new marketing for the offer of the product. This could be discount offers in product or quantity discounts for product bought. Discovering the reason why the product is decreasing in sales is an advantage for both the company and its sales rep. Making loans to sales rep on commissions that haven’t been earned could lead to greater losses for the company, turning the solution into a problem. Why? Simple, the problem could rely on sales reps that are not doing the job as they should. As the questions state, there are some sales rep that still making a good commission, the task must be to find why the other that have lower the sales. If the fact is that the company hasn’t evaluated commissions percentage for their sales rep in a long time to cover the high cost of living is simply, evaluate commissions based on cost of living and increase the percentage for the sales rep. Also they could work with encouraging the sales department with bonuses per sales goal; every sales rep that goes beyond its monthly sales goal will receive a bonus for this. This could encourage the sales rep and thus increase the sales because everyone wants the bonus.
Recommendation – To improve revenues and margins, the company will have to increase the revenue contribution of every product category. I recommend that the company go into its customer requirements and see if it can cross sell product items, so that it can get more revenue from each customer. This will ensure that the company is able to offer competitive prices to customers and grow its business using its existing customers.
b. The overall profit would be a function of the customer’s satisfaction level. Hence a profit
keep an existing customer than finding new ones. A major part of the customer service, especially in a retailing
Sales centre A, they had achieved great success over the last year and consistently outsells other sales centres. In fact, due to the large number of accounts managed by our sales team and larger staff, Sales centre A is expected to sell as much volume as the other two sales centres put together. That means, the expense budget for Sales centre A must be more than other, at least twice time then the other centre. Because, they need a lot of money to pay for their cost, such as Wages, telephone, office supplies, and commission. That seems not fair for Sale centre A.
Over the last 77 years, Morgan Stanley has been at the forefront of the financial industry. This is from the firm focusing on creating customizable investment products that are sold to retail and institutional clients. ("Company History," 2012) However, a problem is that many competitors are entering a period of flat growth that is at the top of S Curve. This is when a company will grow so big that it becomes difficult to continue increasing profit margins. (Nunes, 2011, pp. 1 5) In the case of Morgan Stanley, the recent financial crisis has made it more difficult for the firm to improve earnings. As a result, a new strategy must be developed that will motivate the sales force to do more. To determine the most effective approach requires examining six features of a total rewards program, the specific behaviors that will be targeted, assessing the value proposition and how to attract registered representatives.
Vice President of Sales wants to develop a new retail account in non DFW areas after only five accounts for the last 5 years. They want to focus on non DFW areas because half of their sales and dealers exist in that particular area. It has been asking by Mr. Burns on what the sale representative will do, either focusing on retail account side or on recruiting the professional painter. 70 percent of sale is through their professional painters in DFW areas, while 70 percent of sale went to do-it-yourselfers in non DFW areas. They would need 40 percent price cut to attract contractors since they have minimum number of contractor sale in DFW and other areas.
What strategy should Daloon undertake to build and stabilize its sales in the catering market?
3》 Current fixed customer channel network is not perfect, and market coverage of its products is low
After carefully analyzing the situation, the best plans are to improve customer satisfaction through improving both quality and speed of service and providing incentive programs. A few considered alternative solutions are as follows: