INTRODUCTION Peak Garage Door Inc. has set a goal to increase their sales for 2004. Garage door industry is expecting a growth of 2.4% while the management of Peak is looking to increase company’s sales 26.4%. The company currently has 50 exclusive dealers and 300 non-exclusive dealers. Management has three proposals in front of them. The first suggestion is to increase the number dealers in their existing markets. The second recommendation is to develop an exclusive franchise agreement with existing non-exclusive dealers. The third recommendation is to decrease the number of dealers and focus company’s resources on increasing support for the existing dealers. Of course there is an option for them to leave everything as it is. My …show more content…
Peak currently serves 150 markets that are equivalent in terms of population size. The second proposal would be an exclusive franchise agreement with some existing independent owners. 27 independent dealers have inquired to Peak about becoming exclusive dealers for their areas. This would involve Peak providing more marketing support for these areas as well as a franchise fee paid for by the dealer. This would require Peak to drop all other independent dealers in these markets since they do not want them to be in the direct competition with one another. The remaining 73 markets would not be affected. Either party can cancel the contract with 90 day’s advanced notification. The third proposal suggests eliminating a number of the independent dealers. It is stated in this proposal that 70% of the sales for Peak are made through their exclusive dealers. The argument made by this proposal is that there has not been an exclusive dealership program in place before, and the company might not need one. The franchise program could also make Peak less flexible to future changes. This plan would have the number of non-exclusive dealers in the 150 markets decreased by 100 to a total of 200 while the 50 exclusive dealers would remain as they currently are. Ultimately, company can choose to stay as it is. However, this would mean that their chances of reaching their sales goal are slim.
POTENTIAL RESULTS The first proposal would be to increase the number of dealers in the
The company started off producing 20,000 units of mountain bikes. We did not change the production quantity. Last year our forecast sales were 24,000 when we only sold 19,866; therefore we thought it would be best to leave production at 20,000 bikes. Having excess inventory, we concluded that 20,000 units should be enough considering our quality has not changed and our advertising will not increase the sales dramatically. Although we had the choice to produce as much as 30,000 units, we felt as though we did not have sufficient money to increase production. We were interested in allocating the money towards marketing as opposed to production. We realized that without awareness, no matter how many units we make, sales would be inefficient.
The company has been functioning well in terms of generating profit and demand so far. However, there will be a 20% increase in demand for the next month of operations as predicted by management, and the production and supply management's problems may come as a problem they can no longer afford.
1. Why are Houston Fearless 76, Inc. (HF76) managers unhappy with the company’s existing sales incentive plan? Are weaknesses in this plan a major cause of the company’s performance problems?
If you compare bakery sales in July to bakery sales in September, it shows a 66% increase in sales in just two months. Peyton Approved uses its equity to finance the business than taking out loans. It has a .36% Debt to Equity ratio. The best ratio for the business is the profit margin. In three months the profit margin for Peyton Approved is 53.4%. The company just added a product line of hypoallergenic shampoos. It has been selling these products for one month and the company only turned the product over once during that month. At this time it does not look like adding these products to sales is
1) Issue – The team wants to develop new ventures and wants to keep it in house. They realize that everyone has things that they are working on. They start thinking of pulling warehouse staff to assist with order fulfillment, but right away Maria says no that it is not cost efficient to outfit them with new hardware. The
Alternative 3: General reduction in the number of independent dealerships (100) without granting any formal exclusive franchise.
Cranfield Inc. is a leading producer of juices for range of cranberry cocktails. After a market research experiment Cranfield Inc. has many different business decisions to make. One to introduce a new line called lite cocktail which requires space and machinery and will eat into sales of currently offered products. Or not to introduce the new product and lease out it’s space, or do nothing to save the space until it’s needed for its current product line.
2. Given the markets the company is operating in, what is the best structure for the sales force? How did you decide?
[Appendix B shows Pro Forma for Option 1 and Appendix C shows a Pro Forma for Option 2] A1 can also take a reactive approach by increase its advertising while Lawry is running its two-for-$5 promotion. A1 Steak Sauce can pay for more efficient shelf spacing in the retail outlet. This will include end caps, more facings in the stores, larger and increase signage (bigger and better than what they have done in years past). A1 can also use their brand recognition to their advantage by ensuring more restaurants that publically use A1 display their products, rather it’s on the menu or tables. Currently A1 spends roughly 15% of total revenue on advertising. Option 3: A1 could simply increase their percentage of revenue to marketing and adverting from 15% to 20%. This approach will decrease A1’s net profit by roughly 7.5million (with the worst case scenario that A1 will not increase sales at all) but it will allow A1 to increase its brand awareness and make it substantially harder for Lawry to penetrate the market with its new steak sauce. [Appendix D displays A1’s pro forma with the original 15% of revenue funding its marketing while Appendix E displays an increase to 20% of revenue funding marketing initiatives]Recommendation: Based on the financial analysis of each option, Option 2 would be the best approach for A1. Although each scenario is profitable, Option 2 has more
Answer: In my point of view the proposed system of Bachand seems to be more profitable for PK in contrast to the current franchise system. I would like to quote following reasons in favor of my conception:
|250000 indirect employees & 9000 vehicle for distribution). |position in profitability due to drop in prices by nearly 30% since 1950’s. |
Durango Manufacturing Company is progressive and poised for a successful future. To best maximize company revenue and position in the industry, it should consider increasing revenue by 10% in the next five years. As a consultant, our firm encourages the organization and CEO to consider methods of implementation to develop the company going forward. Several items must be taken care of to change revenue per business year. These steps include checking on our labor productivity and also department development which affects revenue collection. If taken seriously and implementation is successful, these strategies will help to achieve the desired goal of attaining 10% revenue in the next five years.
The follow information includes an analysis of the decisions made by SunPower’s management over a period of 18 years from 2008 - 2025. These decisions could impact the organizations pricing, marketing, as well as investment strategies. For the company to maximize profits, some objectives had to be met. I would suggest that the following objectives would need to be
Define the situation (case summary) Define the major issues, conflicts, and the network . Describe the options (alternatives) for solving these issues. Several internal and external influences serve as contributing factors in the reconsideration of the company’s current system. Changes in customer demands, domestic and global competition, and a unique decentralized management system is now forcing the Westminster Company to reevaluate their traditional supply chain practices. (Bowersox & M.B., 2014) Westminster’s domestic operations consist of three separate companies that sell and distribute products to several of the same customers. (Bowersox & M.B., 2014) At first glance consolidation of the systems can significantly improve
Place: Loctite should expand their distribution network. Currently they only have about 71 general distributors (285*.25 from p. 4) and 43 specialty distributors (285*.15 from p. 4). One of Loctite’s main objectives is to expand their market share to 35% in the SIC industries (20-39). So they should partner with distributors that specialize in the SIC industries (20-39). They should first partner with distributors that specialize in industries with the largest instant adhesive usage. This means that Loctite should first find distributors in the metal products, machinery (33-35) and electrical (36) industries because they use the most instant adhesives. There are about 15,070 instant adhesive users in the (33-35) industry (102,523*.147 from Exhibit 1). Loctite will want to research what a good end-user company to distributor ratio is in that industry then use that to find how many distributors they want to partner with. I am going to assume Loctite should use one distributor for every 100 end-user companies and that Loctite wants to