Interface's Evergreen Services Agreement Essay example

2044 Words9 Pages
Interface’s Evergreen Services Agreement

Northwood University

Problem Statement: Dan Hendrix, president and CEO of Interface, Inc. is challenged with deciding the future of Interface’s Evergreen Services Agreement (ESA) business model. This decision will impact Ray Anderson’s vision to create an environmentally stable enterprise.
Objectives/Goals: (Financials / Ecological) • Uphold ESA’s business model concept • Maintain ecological balance using the ESA’s seven goal plan to achieve a sustainable enterprise • Become Profitable – Increasing net income by 3% in 5 years
Analysis:
After using common troubleshooting diagrams and performing a root cause analysis, various reasons have been identified as to
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According to a facilities manager, The number one rule of budgets for facilities is – Thou shalt not spend more in operating expenses that the rate of inflation next year – • Overall sales team o Anderson was not in unison with his team members. He had a vision but neglected to consult with his cohorts about whether or not his vision was realistic The upfront costs to sell ESA were difficult for customers to overcome when implementing a decision. Customers are initially shown a high price at the time of reviewing the lease and then forced to make decision. Customers are then opted to buy rather than lease. As an alternative the lease agreement could have been adjusted as Interface has no commitment in asking for a specific price amount upfront. Therefore, a smaller amount could be requested from the customer rather than two large transactions at the time of signing the lease agreement. Interface could explore other options to alleviate upfront costs by dropping specific services provided by Re: Source such as the daily tasks of vacuuming and emergency spot removals. Removing such services will allow them to charge a lower

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