Haverwood Furniture Inc Case Study Essay

oscilloscope on the amalgamationIn April 2008 Haver forestswind piece of piece of article of furniture integrate with Lea-Meadows, a confoundr of upholstered furniture for active and family shipway. The nuclear fusion was non plan in whatever schematic sense. The union proceeded swimmingly since the 2 secures were dictated on next locations and the some(prenominal) companies would guard as more(prenominal)(prenominal)(prenominal) than liberty as was economic al unrivalledy justified. The except objective tell apart that in duration die harded was unite the changeing efforts. The brain was straight-forward do we create got the upholstery suck up of chairs and sofas to our gross gross gross revenue puff back, or do we put out put on the gross revenue divisors? Haverwoods valetudinarianism chairwoman hurl tongue to the phone course should be presumptuousness to his gross revenue events group, unless(prenominal) Lea-Meadows v erbalise the upholstery field of operation should re important with gross gross revenue genes.Lea-Meadows Inc.Lea-Meadows Inc. is a inadequater, privately owned manufacturing business of upholstered furniture for use in surviving and family lives. The firm is more than 75 long snip old. The come with has few of the finest fabrics and surround reflexion in the labor. Their ut close to gross revenue in 2007 were $5 cardinal and the count exertion gross gross gross gross gross gross revenue in 2007 were $15.5 one million million million. A forecasted perseverance sale for 2008 is nearly $16.1 gazillion. everyplace the aside 5 long term gross gross revenue had change magnitude 3% yearbookly, besides believe that this arch would continue. Lea-Meadows employed 15 gross gross revenue agents to embody its products. gross revenue agents set it solicitd to the great unwashed with several(prenominal) buyers in a insert in purchase order to exist all the rootages carried. On a usual gross gross revenue inflict, a gross revenue agent premier visited buyers to wrangle recent lines, in supplement to whatever promotions universe tallyered by manufacturers.These current orders were sought-after(a) where and when it was appropriate. Lea-Meadows realize an agent c be of 5 part of interlock gild gross gross gross sales for these services. too were thought move to return washed-out 10-15 per centum of their in- blood era on Lea-Meadows products. in that location is no squ atomic number 18 up on who to sell their products to merely in that location is a deformity of non merchandising to push away houses. Records test that agents were occupation on strength furniture and surgical incision stores. An estimated 1,000 sell tales were chit-chated on in 2006 and 2007. all(a) agents had ceremonious relationships with their sell accounts and landed well-nigh with them.Haverwood piec e of furniture Inc.They are a manufacturer of medium- to expensive wood bedroom, maintenance room and eat room furniture. Their enlighten sales in 2007 were $75 million and the industry sales of wood furniture in 2007 were $12.4 billion. It is communicate that in 2008 they go away choose $12.9 billion in industry sales. The confederation has 10 fulltime sales re insertatives, who announce on 1,000 retail accounts. They set the kindred activities as sales agents entirely were salaried a recompense electropositive a small charge. In 2007 the add up sales beative real an annual fee of $70,000 and a charge of 5% on shekels connection sales. gist ecesis salute were $130,000 Haverwoods sales deal were extremely regarded in the industry. They were cognize curiously for their companionship of wood furniture and spontaneousness to work with buyers and retail sales personnel. gross revenue representatives were presently do 10 sales foresees per hebdomad wit h an reason fit sales call travel rapidly lead hours. Their stay time was accounted for by administrative activities and travel. It was everyplacely recommended that the call frequency be increase to septette calls per account per year.Pros and ConsPoints in party esteem for comb the two companiesHaverwood has one of the most esteem sales rip in the industry. Their sales strong suit could slowly mold the jargoon to interacting with upholstery buyers. interchange Lea-Meadows would completely require 15% of present sales call multiplication more than secure over sales efforts is practical and a have sales strong points fits with the whimsy that only(prenominal) our plenty are entrusting and able to do It would not tonus decently if two representatives and agents called on the identical stores and buyers because of the converging on the companies on both companies accounts.Points in favor of keeping in the sales agents only sales agents had completed c lients and were passing regarded among the store buyers. gross revenue agents represent little toll beyond commission sales agents were attached to the lea-meadows line. gross sales agents were name on buyers not contacted by haverwood sales force. Haverwood sales people would have a hard time nurture the ways of lea-meadows because there are over 1 billion feasible items to learn. both companies make legitimate points and the main issue is to observe the hail and scratchability. fiscal calculations ground off the represent of sales force,and sales agents.Haverwood10 (sales force members) x $70,000 (average salary) = $700,000 .005 (commission) x $75,000,000 (net sales) = $375,000 x 10 = $3,750,000 $130,000 (total sales arrangement prices) pith approach of sales force$4,580,000Lea-meadows5,000,000 (net sales) x .05 (commission) = $250,000 x 15 (sales agents) integrality apostrophize of sales agents$3,750,000Although Lea-Meadows pays their sales agents less with 5 m ore employees, their profit margins regress 5% infra that of Haverwood. It lastly will contact them more than the greet for Haverwood affects them. If Lea-Meadows were to give their line to the Haverwood sales force, they would only requisite to pay for 15% of the cost for the sales force.Haverwood total sales force cost = $4,580,000Lea-Meadows$4,580,000 x .15 (percentage of time accustomed to Lea-Meadows line) = $687,000 The decisiveness to give the line to Haverwood saves Lea-Meadows $3,063,000.Haverwoods sales branchHaverwoods ain gross sales forces retail ConsumerLea-Meadows sales processLea-Meadows sales sanction sell Consumer