Hunter Business Group

1093 Words5 Pages


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
…show more content…

• 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

More about Hunter Business Group

Get Access