The comprehensive document is an overview of Fastenal Canada LTD and how it relates to sales management.
The document first provides an introduction to the problem and company background of Fastenal, which includes a description of various views of Fastenal. It further goes into detail about the recommendations that relates to the two main parties involved, which are the customers and the company itself.
The document also includes an in-depth implementation plan, which is broken down into short, medium, and long-term tasks to accomplish. Through out the document there is a mention of the vendor managed inventory model (VMI). By using VMI, we were able to use a different approach to avoid risks associated with the “bricks and mortar” approach. Fastenal should choose to implement the following business plan because a well thought out analysis went into determining the problem and coming up with a solution for the future growth of the company. All decisions were made with the company in mind and focusing on the strong relationship between the costumer and Fastenal.
Fastenal Canada LTD is a subsidiary of Fastenal Company, which was founded in 1967. Fastenal Canada LTD operates as a wholesaler and retailer of industrial and construction supplies in Canada. They have over 200 stores across Canada, 66 of which are in the western region. Fastenal’s growth strategy has always relied heavily on new store opening because the high demand for its products and services across Canada (Fastenal, 2012).
It tends to be risky as well as costly when opening stores using the “bricks and mortar” approach. The introduction of the vendor managed inventory model (VMI) has been advantageous. Fastenal receives an electronic data via email, informing them of its distributor sales and inventory stock level. This system makes it fast and efficient for the customers and sales associates. Fastenal interprets the electronic data and there is an automatic responsibility of maintaining the inventory level for the customer. Fastenal is looking for a different expansion model approach to be used as a growth driver in Western Canada. Our new proposed strategy gives Fastenal the ability not only maintains its desired identity but it gives them the ability to increase the market share and tap into a fresh new market. Our goal is to assess the situation in hand and work in the given environment to keep the strong customer relationships since it is an important component in the company.
How can Fastenal use its new vendor managed inventory model to increase its market share?
End market sales during the months of 2012 grew 19.8% from the manufacturing customers while the residential construction customers grew 17.9% (Fastenal, 2012). The advantage to VMI is that it releases the customer of having to worry about the level of their inventories. Fastenal interpret the electronic data and automatic take control of the responsibility of maintaining the inventory level for the customer.
How can Fastenal reduce financial risk?
Every scenario where there is a change in the way things are done or achieved there is always risks to failure or loss. In many cases where there is loss or failure, there is often a way that it could have been avoided or done differently to avoid the negative outcome. Fastenal needs to avoid these situations by planning ahead and finding ways to avoid the risks that may pose problems or loss in the near future. “Bricks and Mortar” approach induces many financial risks so another approach is necessary to prevent them.
Customers and the sales force are the stakeholders who are most affected. Strong customer relationships are the essence of Fastenal’s success and form an important component of their competitive advantage.
The problem arises due the to lack of education the customer has about ordering online which deceases the...