REV: OCTOBER 15, 2004
JOHN J. GABARRO
Bringing Aston-Blair's June 12 executive committee meeting to a close Wynn Aston, III, chief executive officer and chairman of the board, asked Peter Casey, vice president of marketing, and Chris Trott, vice president of corporate planning, to seriously reexamine the company's procedures for forecasting sales. Aston hoped that improved product demand projections would lead to better inventory control, financial planning, and production scheduling. Aston-Blair had suffered significant losses in the first quarter of 2004 and expected even greater losses in the second quarter (the first losses the company had experienced since 1975). Aston felt that poor forecasting was one of several underlying factors contributing to the firm's poor performance. Casey and Trott subsequently met with Richard Pack, president and chief operating officer, to briefly discuss his ideas on the subject. The two men then decided to form a task force to investigate the forecasting problem. Casey and Trott agreed to put Michael Bacon, special assistant to Chris Trott, in charge of the task force. Bacon had been with Aston-Blair for two years, having come to the company from a distinguished academic and professional career. After graduating magna cum laude from Yale, Bacon spent two years with Boston Consulting Group, and was a recent graduate of Harvard Business School (see Exhibit 1). Prior to his present assignment, Bacon had worked as a financial analyst in Trott's financial planning group, and he was now assigned to Trott's market planning group. The assignment to market planning was an intentional move on Trott's part to broaden Bacon's exposure to different aspects of Aston-Blair's business. Both Trott and Casey regarded Bacon as an especially promising and capable individual.
Aston-Blair was the third largest developer of children’s educational products in the Unites States. The medium-sized company was headquartered in Chicago and had four major sales offices throughout the United States. Its products included books, music, educational computer software, and films, primarily for children between the ages of 2 and 12. Aston-Blair distributed its materials to wholesale clubs, mass merchandisers, Internet retailers, and specialty stores. The company's present difficulties were precipitated by recent losses in almost every product line. Children’s books sales had remained steady but with little growth for a number of years. The company’s premier author had entered into retirement after over 100 successful titles, and there was no replacement for lost revenue from his series. Furthermore, children’s music sales had been ____________________________________________________________
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fluctuating dramatically after the boom of the 1990’s. Sales had oscillated over the past 5 years, resulting in either product overstock or shortages. The software market was quite competitive – the company had not produced a blockbuster product in years and could not meet its sales forecasts....
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