I. Executive Summary
Carrington Furniture is now considering on sale responsibility of the merger between Carrington Furniture, Inc. and Lea-Meadows, Inc. The major concerns facing the two companies are and how to handle the sales responsibilities due to the difference of sale distribution and finding the best way to minimize a cost which not make a negative effect to the market share. Meanwhile, two companies have been well-processing as separate companies, the combining of two companies seem to be more complex. By the same time, Bates recommended to increase the call times to industry norm.
Of these many alternatives we chose to adopt a sale force distribution system and add additional sale person. Even using sale forces distribution system have both fixed and variable cost that would not be worth to used in the small amount of sale company, but for the big amount of sale company, it will be lower cost than using sale agents in the long run. And we plan to add sale persons to reduce the pressure, responsibility and tasks of existing sale force and cover the expanding of the market and product line.
By adding two more sale representatives will cost company to training them and also have to pay them. This amount will be valued to pay if we consider that we could save well-performing in Carrington's current market which has 7% higher gross margin than Lea-Meadows.
II. Problem Definition and Statement of Alternatives
The meager between Carrington Furniture and Lea-Meadows has made them face a problem, using a sales agent. Each company was using a different strategy and both were good at their strategy and had experience with it. They still need to have an effective sales effort and be profitable after the merger and cont ...