Case Analysis - EXAMPLE

Case Analysis - EXAMPLE - Merton Running head: MERTON...

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Merton 1 Running head: MERTON INDUSTRIES (EXAMPLE) Merton Industries Case Analysis Student Name University Instructor Name May 1, 2009
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Merton 2 Case Recap Merton Industry is a manufacturer of a full line of medium to high priced carpet serving primarily residential customers. As Special Assistant to the President, Suzanne Goldman has been asked to prepare a comprehensive analysis on the possibility of establishing a Merton distribution center or wholesale operation. (Kerin and Peterson, 2007). This case study will provide a summary and analysis of Merton Industries’ options and an examination into the company’s strengths, weaknesses, threats and opportunities. Problem Identification The problem now being addressed by Merton Industries is whether they should expand their operations by opening their own distribution center or wholesale operation. In the past, the idea of a distribution center was dismissed because the concept was not strategically in Merton’s best interest at the time. Now that Merton has enjoyed profitable sales growth over the last several years, Robert Meadows president of Merton Industries would like to explore the idea again. Meadows asked Suzanne Goldman to review and report the benefits of having their own distribution center. Case Analysis Privately held, Merton Industries is a manufacturer of medium to high priced carpet. Merton’s sales are primarily made through residential customers, while about 28% of sales are generated through contract sales to institutions and businesses. Merton saw a net profit of $3 million before taxes for the fiscal year 2000 (Kerin and Peterson, 2007). Merton spent the majority of its adverting budget in shelter magazines and newspapers. These advertisements told customers about fiber type, colors, durability and soil resistance. Merton also expanded a cooperative advertising program with retailers. Merton’s current distribution method includes seven floor covering wholesalers throughout the United States. The wholesalers then sell the products to retail accounts including department stores, furniture stores, and specialty stores. Merton estimated that these seven wholesalers generated an expense to the company which amounted to 6% of residential sales. The seven wholesalers used by Merton are extremely important to Merton Industries marketing strategy. Many of the wholesalers had long-term relationships with several years of business and maintained extensive sales organizations. Within this organization, each wholesaler employed
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Merton 3 an average of 10 salespeople. Each sales representatives has a wide variety of tasks, previous reports indicated that a sales rep spent about 40% of each one-hour sales call devoted to selling Merton Industries carpeting and 60% was spent on selling noncompeting products. Merton officials believed that a full hour was necessary to
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Case Analysis - EXAMPLE - Merton Running head: MERTON...

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