Pyramid Door, Inc. is a privately owned regional manufacturer for residential and commercial garage doors. The company was planning a $12.6 million of sales goal for 2006, which represented a 36% increase in sales over projected 2005 year-end sales. Richard Hawly, director of sales and marketing, had to decide what distribution approach should be used to support the expanded sales goal. SWOT Analysis
|Strengths |Weaknesses | |Experienced company - More than 10 years |Small in scale - regional garage door manufacturers | |Long-term relationship with dealers - 50 exclusive dealers and 300 |No cooperation with home center chains | |independent dealers | | |Quickly delivery - two distribution centers and a distribution facility | | |Opportunities |Threats | |Increasing preference toward steel garage door- 90% of industry sales |Growing barging power of the supplier - galvanized steel and insulated | |Increasing market demands - 2.4% increase in 2006 |foam | |Continued aging of the housing stock | | |Product innovation - insulated steel doors etc. | |
• The distribution approach should be appropriate for the $12.5 million sales goal. • The action plan of the distribution plan should be prepared in a relatively short time to permit implementation in January 2006. • Hawly should determine the characteristics, the number, and the locations of the dealers Pyramid Door would need to meet its sales goal.
|Decision |Pros |Cons | |▪ Do nothing |▪ Less investment - only increasing the adv. budget by 20%|▪ It would be difficult for existing dealers to attain | | | |the sales goal ( See Exhibit 2) | |▪ Increasing 100 independent|▪ More dealers would expanded the distribution channels of|▪ Adding 100 dealers would not be | |dealers in the markets |Pyramid |Easy. | |currently served |▪ Benefit in the long run of 3-4 years. |▪ Increasing the cost of the sales | | | |Forces. | | | |▪ The sales goal probably would not | | | |be achieved. (See Exhibit 3) | |▪ Exclusive franchise |▪ Easy to implement - 27 dealers had posed applications |▪ Dropping present dealers in their markets and not | |program |for becoming exclusive dealer & could cancel a contract in|adding new dealers | | |three months...