Background of the situation, including organizational factors and the external environment,
Case in point is that, there is a situation to be analyzed critically, and the right decision made with the ideal strategy executed. This is between Sam, and her Mother Linda. This pertain the increase in sales. Sam, who is the marketing
Manager wants to increase sales by adding sales reps rather than playing with the prices. On the other hand, his mother is not sure on the appropriate cause of action to be taken into consideration before coming up with the strategy to implement.
United plastic Mfg is located at Long Beach in California. Its main area of operation is industrialized plastic, and it’s the foremost manufacturer in the plastic forming technology. Started in the 1970’s, it has outgrown time factor and currently it has over $ 50 million sales annually (Oak Brook, 2006). The co-founder of this company, Roger, succumbed to dearth as a result of a heart attack. His wife Linda took over from him and has excelled the company for over 15 years, and she has proved to be determinant, productive, focused and a strong executive. As her tremendous effort, she outworked external environment which was comparatively thought her incompetence to excel. Manufacturers of the same product tried to bring unfair competition, but consequentially she excelled. She competed with 12 competitors’, who manufactured the same products, and sold at the same price.
The various concerns, issues, and problems evident in the situation
The main concern on United Plastic is that it solely depends on six company sales representatives. These reps cover the West Coast, and they cost the company $880, 000 per year. This is the whole remuneration package including their salary, bonuses as well as transportation and other running coast. In addition, there are assistant sales reps, and their cost to the United Plastic Company is $130, 000 annually. The other area of concern to this company is on advertisement, which costs around $100, 000.
Another area of concern is that, Linda is apprehensive that there is potential market outside the West Coast; she wants to find a way to compete effectively in other regions. Her top most strategy to achieve her goal is by increasing on the number of sales rep than altering the prices.
The main area of concern (main problem)
The core area of concern in the United Plastic Mfg Inc is venturing on the way forward and capturing the untapped potential market. This are includes the Midwest and the Eastern regions. In addition increasing on sales volume without altering on the price is another area of concern as argued by Sam.
Alternative courses of action
The alternative measure Linda is thinking of implementing is expanding sales by absorbing extra $3,000 to $6,000 in freight cost. This is what occurs if Midwestern consumers buy from her West Coast location. She will reduce her net returns by implementing the above mentioned action. Also by implementing this, in her own reasoning, she puts it that her competitors will not resort in cutting down costs for they will see not this as price competition.
Evaluation of alternatives based upon the criteria selected for this purpose
Linda’s son Sam evaluates this alternative, and disagrees. He articulates that if the mentioned action is implemented, it will stimulate price competition in the Midwest and East and as well as the West Coast. He therefore prefers adding sales reps. For example, he point out that by adding on entertainment to the marketing campaign it will be of great significance.
Selection of a course of action
Sam advocates for hiring some sales reps to work in the Midwest and Eastern regions. The reps should sell quality not to rely on manufacturers agents. He further debates that, by adding two more sales reps, sales might increase immensely with the costs not increasing at per. Sam points it out that, with this plan, there would be no need to absorb in flight, and risk disrupting the status quo. He goes further and explains that the competition in the Midwest and East is much higher than on the West Coast. This is as a result of the number of competitors who even to extend include foreign ones.
Plans for implementing the course of action
The relevant implementation protocol for this action is to first consider entertaining. Though seemingly expensive, it is required so as to be considered as a potential supplier
Identification of possible follow-up problems
Linda agrees with her son, and identifies to follow up on the appropriate cause of action to take with regard to expanding on her business territory so as to venture in the Midwest and eastern region.
Given sales objectives with the targeted figure, it is the mandate of the United Plastic Mfg to ensure that it works out the appropriate plan for achieves the goal. it is a critical decision to make, and it is this decision that will determine whether the sales will increase or not without changing the status quo. Evidently, Sam has a vision for the company and with his capability as the marketing manager; the company will excel to greater heights.
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