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SwisherMC- final - Justin Gardiner Advanced Marketing Dr...

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Justin Gardiner Advanced Marketing Dr. Withey     Executive Summary: In 1996, a newly appointed President and Chief Executive Officer (CEO), Wayne Swisher, son of company founder Max Swisher was offered a proposal from a major retail merchandise chain that could change his companies path for good, or for worse. He was left to analyze the modifications that would have to occur in order to accommodate this proposal, as well as the benefits that the company may misplace if they choose to not accept. This private line proposed the following: They wanted 8,200 units to be delivered to their warehouses starting in January 2007. This is keeping in mind that Swisher already produces approximately 4,250 mowers annually, and has the capacity in the normal 40 hour work week to annually produce 10,000. The extra 250 or so units were determined to be achievable by paying workers overtime. The private line however, wanted a 5 percent discount on mowers, not requiring discounts regardless of season, just a standard fixed low price. Shipping from Swisher’s facilities to the warehouses of the major chain is proposed to be shipped free on board factory. Under this deal, the title would not switch to the chain until the mowers were shipped to
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definite company stores, unless the mower had been sitting in the chain’s warehouse for more than two months, in this case the title would then switch. For both of these instances, payment to Swisher Mower would follow within a 45 day period. The chain intends to slightly alter the physical features of the mowers by adding a new seat, having it a different color, and their own specific decals that they would supply, along with the mower either being American made, or displaying an “American name” as its producer. The correspondence expressed approval of the quality of the companies mowers, and did not wish to have mechanical alterations performed, but did require SMC to supply their standard warranty for all parts. The chain would expect compensation for all labor costs ensuing from warranty work, at a fixed price of $22.00 per hour. These specifications would be valid in a two year contract. The contract would be available for extension after annual reevaluations, or termination pending a six-month notice. Price negotiations could only occur annually in the reevaluations, and the chain would be supplying all advertising related to themselves, while forbidding SMC to broadcast any connection. I believe that Swisher should utilize this opportunity, and make the new addition. As the numbers show, it would triple their production, which gives the company more of an advantage in a strategic battle for market share, while accruing much more revenue if all goes according to plan. Though Swisher has remained a profitable company since its founding, it is unacceptable for them to produce at such a low utilization rate. Though the company will accumulate more expenses from either adding employees, or paying over time, the profit from this plan should offset the operating costs.
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