Haverwood B Case Analysis - Recommendations In the current...

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Recommendations In the current situation, choosing between options is a tough choice, but one that needs to be made as fast as possible. The best option for the Haverwood & Lea-Meadows merger would be to use the current Haverwood sales force with the addition of one sales representative. Although the 15 sales agents would be dropped from the Lea-Meadows sales force, they are agents that have multiple product lines and will be able to find other manufacturers to pick them up. You can see below in Exhibit 5 the current cost of each of the sales forces, which clearly indicates the more cost effective choice is the Haverwood sales reps. It also shows that each sales agent only makes $16,667 off of Lea-Meadows products, and they won’t be completely out of a job if they are let go. Exhibit 5: Cost of Sales Forces Cost of Sales Forces (Lea-Meadows) Agents $5 mil net sales x 5% commission = $250,000 $250,000 / 15 sales agents = $16,667 per agent Total cost = $250,000/year Haverwood Sales Reps (1 additional rep) $5 mil net sales x 0.5% commision = $25,000
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  • Spring '10
  • JohnElmore
  • Sales, sales representative

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